Biofuels- where are we?
18th September 2008
So where are we with biofuels?
I think an interested but not especially knowledgeable observer of the scene over a period of time would be somewhat perplexed by now. A few years ago biofuels were set down as something of a panacea. The world was, and of course still is running out of oil, we need to make rapid progress in decarbonising our energy supplies, and the idea of growing our own, or if we couldn’t grow our own as it were , or importing what someone else had grown at a fraction of the carbon cost of the oil it replaced seemed to make eminent sense. There was a great clamour to bring in quotas, to set targets and to get the whole biofuels industry really moving.
So exactly this was done, and indeed we now are in the sixth month of the introduction of the Renewable Transport fuel Obligation. That states that we should source 2.5% of our road fuel - diesel and petrol from renewable substitutes - bio diesel and bio ethanol, rising to 5% by 2010.
And of course that responds, among other things to the EU agreement in Spring 2007, that we should supply 20% of our energy requirements from renewable sources by 2020, and that we should aim to derive 10% of transport fuel from renewable sources by 2020.
Almost as soon as that had happened, substantial questions arose - were biofuels really as effective in cutting greenhouse gas emissions as was maintained? After all, some studies have suggested that US maize and wheat based bioethanol only saves about 7% of emissions on the equivalent mineral based petrol it replaces, and if we take into account all the transporting around that may take place - particularly if we factor in the scams such as ’splash and dash’ where bio ethanol is transported to the US, has a little diesel added to it, collects a subsidy of one dollar a gallon, and then goes back to Europe at below market prices - then biofuels , or some of them, may be more carbon intensive than mineral based fuel.
And we had, also, claims that the land taken up for growing energy crops was and would be at the expense of land for food, and that it was driving up, and would drive up world food prices a unsustainably as a result.
And, interestingly, it was often the same people who had called for a biofuels revolution, who were now saying, within weeks of its introduction, that the RTFO should be scrapped, or that there should be a moratorium on a biofuels until so called third generation fuels using algae and waste cellulose feedstock could come on stream.
So where does the balance lie - and what should we be doing about biofuels?
Because there is, I think a balance to be achieved in this debate, and a balance that informs policy, and which then underpins the development of the biofuels industry and the transport that goes with it.
And that, I would suggest is what is currently happening because some of the complaints are justified, and some of the practices that have surrounded the introduction of a large production base of biofuels have not been sustainable, and really have no place in the long term development of fuels, if the whole rationale for the development of biofuels in the first place is to be upheld.
But that doesn’t mean that we should suspend quotas or suspend production of biofuels, any more than the fact that a child falls off his or her bike a few times whilst learning to ride means that we should ban him or her from cycling. We might invest in a cycling helmet for the child, and suggest that riding on the main road straight away is not a good idea.
We know that some practices in biofuels manufacture are unsustainable, and we should ensure that these practices do not get accredited with being part of any quota. Good quality biofuels production can save over 70% of the greenhouse gas emissions from the mineral fuel it replaces. We can and should ensure that energy crop production really is on marginal and set aside land that does not crush food crops.
But as the recently published Gallagher report, produced for the Renewable Fuels Agency makes clear, we can do both, and sustain robust growth in the biofuels market. The decision by the minister of Transport in June, to downgrade the US biofuels targets in line with the Gallagher reports findings has been heralded by some, as the government turning its back on biofuels - it is, of course nothing of the sort - and I will return to the reason why this is so in a moment.
But the debate on transport biofuels masks a wider debate on biofuels generally - and of course biofuels does not just include what goes into the tank of a car, but the whole range of fuel for electricity generation, and for heating that is not mineral derived.
And in this area, there is little debate, and quiet progress on establishing a far greater penetration of such fuels for electricity and heat.
Solid biomass, either derived in the UK or imported will for certain play a huge role in power generation and heating in the next few years.
The energy Bill, now before Parliament, will, among other things enshrine a new range of banded underwriting for solid biomass - two ROCs for power derived from good quality biomass based Combined Heat and Power. It is not for me this morning to explain in detail how Renewable Obligation Certificates work, or we would be here until lunchtime on that topic alone so you will have to take it from me that two ROCs per kilowatt hour of electricity generated is a good thing. And this means that there are getting underway many schemes to use biomass in power generation. A 50mw biomass power station just opened in the North of England, and substantial plant planned in Port Talbot south Wales, and many smaller biomass power stations using both imported and indigenous fuel - mostly dry waste wood, including in my own city of Southampton. The biomass strategy includes capturing over a million tonnes of dry waste wood in presently unmanaged UK forests, and the Waste Strategy is looking at pulling seven million tonnes of construction wood that presently goes to landfill out of the ground and into power plants.
There is also a similar development under way in our existing power stations, namely the co-firing of biomass and traditional fuels such as coal. Changes in how biomass can be fired in power stations will lead, in my view to a very substantial increase in solid biomass being used I n this way -and this is not just waste wood, but many other residues largely imported that can be fired - coconut shell residues from Africa, olive waste from southern Europe palm residues from the far east sewage sludge and waste derived fuel from the UK and elsewhere, all capable of being co-fired at a much lower carbon output than coal. The market for co-firing products is potentially enormous, when we consider that only a few percent of power station fuel is co-firing material currently, and is targeted, up to 25% can be co-fired in the future.
And that comparison of where we are and where we might be brings me back to biofuels.
Because the change of a 5% biofuels target for 2010 to 2013 sounds like a substantial change. It is in terms of the pace at which biofuels demand is pulled forward, but it isn’t in terms of where we are now and what we will need to be producing or importing over the next few years.
The figures for where we are now, or were before the RTFO came in, and where we will be by 2013 are in fact startling.
In 2006 we consumed 0.05 million tonnes of oil equivalent in bio ethanol, or 0.2% of total transport fuel sales, and 0,14 million tonnes of oil equivalent in bio diesel, or 0.3% of total transport fuel sales. By 2013, even on the revised targets, transport in the UK will require 0.68 mtoes of bio ethanol, and 1,1 mtoe of bio diesel. The percentage increases that these figures represent are so large as to be almost meaningless, but I hope you get the picture. Some of these requirements will be home grown, much will be imported. Clearly there will have to be action to regulate the sustainability of what will be imported, and already there is an investigation under way at EU level of dodges such a splash and dash. Whatever happens, we can say for certain that there will be an enormous transport requirement for liquid biofuels, in addition to the transport implications of the increase in heat and power generation and co-firing by solid biomass biofuels.
So the futures bright for biofuels. It is not a panacea for all the ills of carbon emissions, and nor is it, on the other hand a bogey fuel that will strip the world its fertile land and food supply. It is a contribution to the decarbonisation of our energy supply. And bearing in mind that we are , with the Climate Change Bill also now going through Parliament, committing the UK to a cut in carbon emissions of at least 60%, more like 80% by 2050, all contributions will be urgently needed. Biofuels will therefore come of age in this process, fairly rapidly, I believe. There will be no resiling from quotas, although they may change, and there will be no return to energy generation using oil and coal, and in the longer term even gas.
And yes, we will need to maintain vigilance about the balance between sustainability and conservation - there will be debates about the use of swathes of land for oilseed rape, and in other parts of the world, on palm oil, or whether jatropha trees really thrive on marginal soil in the way they are supposed to. But I have to say, we cannot have a low carbon economy and have the world just as it was, and yes, if we look back thirty five years we have changed our energy economy over that period from being almost wholly dependent on coal, to being only residually dependent on it - a huge change for industry, for our infrastructure, and all that goes with it. We will have to change to a predominantly renewable fuelled economy over the next thirty five years, and it is inconceivable that biofuels will not be a very substantial part of it. In short, the child will learn to ride the bike, and we will be proud that it has.
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