Commercialization of New Technology

Acceleration of the commercialization of new technology is by tax breaks incentives and tariffs. The US provides a $0.51 per gallon tax refund for blenders of ethanol and $1.00 per gallon for biodiesel from vegetable oil. Federal incentives are also provided for small biofuel plants. Domestic industries are commonly protected by tariffs on ethanol imports, which in the US are 25 percent, and up to 45 percent in the EU. Given the potential for second generation cellulosic ethanol, sourced from wood chips, wood waste and residues to raise yield dramatically, many other countries are subsidizing its commercial application (Coyle, 2007).

Recent scientific breakthroughs suggest that the present high costs will

Sources: Image courtesy of the University of Georgia Research Foundation. Figure 6.3 Wood pellets used to make biofuel

be reduced for the production of second generation fuels. The derivation of oils from wood has long been possible but the inexpensive processing of the oil for use in engines has not. A team of researchers at the University of Georgia developed a new process that treats the oil so that it can be used in unmodified diesel engines or blended with biodiesel or conventional diesel. Wood pellets are heated in the absence of oxygen to produce charcoal and gas (pyrolysis); (see Figure 6.3). The gas is condensed and chemically treated. Research is underway to increase the fraction of oil derived from wood (Garcia-Perez et al. 2007).

Another team of researchers at the University of Massachusetts-Amherst, also using the pyrolysis method, have been able to directly convert plant cellulose to a liquid that can be used in gasoline engines on the road now or that can be blended. The feedstock is any woody biomass, such as the inedible portion of food crops and wood from trees (The Scientist Community, 2008).

The inroads into the crude oil market by bioethanol and biodiesel from first generation plants are presently minor, and limits to land that can be switched to biofuels without large impacts on food prices are already approaching. The need for scientific breakthroughs and commercialization of new processes that increase the range of feedstocks that can be used in the commercial production of biofuels, is illustrated by the large gap between a business-as-usual scenario and President Bush's target of '20 in 10'. If 30 percent of the corn crop is devoted to bioethanol in 2017 (27 percent in 2007) it will produce 12 billion gallons. If 23 percent of the soy

Note: Cellulosic sources, for example crop wastes and forests, are expected to contribute to reducing the projected deficit in achieving President Bush's goal of producing 35 billion gallons of biofuels by 2017.

Source: Collins (2008).

Figure 6.4 US production of biofuels in 2007 and projected for 2017

crop is devoted to biodiesel in 2017 (17 percent in 2007) it will produce 700 million gallons (Collins, 2007). These combined will still leave a deficit of 22 billion gallons to be met from sources other than grains, as illustrated in Figure 6.4.

The Energy Independence and Security Act of 2007 requires 21 of the 35 billion gallon target to come from 'advanced fuels' or second generation biofuels from non-edible plant sources. These sources include crop residues, perennial crops, forest fuel treatment and logging residues, and animal manures (Perlack et al., 2005).

While the developments on the technical side of biofuels production may be exciting, there needs to be a countervailing examination of the social costs of large biofuel increases.

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