Box 61 Us And Eu Targets For Biofuels

The President's 2007 State of the Union Address (Bush, 2007) urged Congress to agree to increase the supply of renewable and alternative fuels by setting a mandatory Renewable Fuels Standard requiring 35 billion gallons of renewable and alternative fuels in 2017. This was nearly five times the 2012 target already in law. The Energy Independence and Security Act of 2007 already required 36 billion gallons of renewable fuel by 2022. In 2017, the President's plan would displace 15 percent of projected annual gasoline use.

A 10 percent substitution of petrol and diesel is estimated to require 43 percent of current cropland area of the US (International Energy Agency, 2004). It has been estimated (Perlack et al., 2005; US Department of Energy, 2008a) that there will be sufficient biofuel feedstock to meet the projected demand from several sources:

• Crop residues, presently unused;

• Grains, mainly through large increases in yield;

• Perennial crops (grasses and trees) on cropland, idle cropland and cropland pasture.

In the case of Europe, the European Council has agreed to a target of 20 percent share of renewable energies in overall European Community fuel consumption by transport in 2020. The specific target for biofuels is 10 percent of total fuel consumption by transport by 2020. The target is conditional on the production being sustainable and second-generation biofuels (those using cellulosic sources) becoming commercially available. However, this rate of substitution will require 38 percent of current cropland in the EU (International Energy Agency, 2004).

The growth in the EU will be in bioethanol and biodiesel. Domestically grown cereals and tropical sugarcane would be the main ethanol feedstocks, complemented later by cellulosic ethanol from straw and wastes. Rapeseed oil, both domestically grown and imported, projected to remain the main biodiesel feedstock, complemented by smaller quantities of soy and palm oil and later by second-generation biofuels, mostly from farmed wood (Commission of the European Communities, 2007).

European Union 4%

Other 8%

United States 46%

European Union 4%

Other 8%

United States 46%

140 billion liters

Source: F.O. Licht Consulting Company (2007) cited by the World Bank (2008b). Figure 6.1a Ethanol production by region, 2006

Source: F.O. Licht Consulting Company (2007) cited by the World Bank (2008b). Figure 6.1a Ethanol production by region, 2006

6.5 billion liters

Source: F.O. Licht Consulting Company (2007), cited by The World Bank (2008b). Figure 6.1b Biodieselproduction by region, 2006

6.5 billion liters

Source: F.O. Licht Consulting Company (2007), cited by The World Bank (2008b). Figure 6.1b Biodieselproduction by region, 2006

for 92 percent of gasoline energy, according to Wang et al. (2007: Figure 11). Another advantage is the possibility of using waste biomass to generate the heat necessary for the second generation thermochemical production process.

A disadvantage of second generation processes is that the investment costs in plant are high. In Europe the cost of producing biodiesel is $155 per barrel and second generation production $235 per barrel (Edwards, 2008). Moreover the large-scale plants may face difficulties with supply and transport cost of materials. However, recent research results suggest that costs could fall in the future.

The next sections highlight the large rise in biofuel production in recent years and how research promises expanded production and lower costs.

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