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ISIS Report 06/03/06

Biodiesel Boom in Europe?

A predicted boom has yet to take off in Europe as investors look abroad. Dr. Mae-Wan Ho

A fully referenced version of this article is posted on ISIS members’ website. Details here

Overly optimistic assessment in US DOE Report

The US had plans to make biodiesel out of soybeans at least since 1998, when a glowing assessment of its energy balance was provided in a report sponsored by the Department of Agriculture and the Department of Energy. It claimed that, “Biodiesel yields 3.2 units of fuel product energy for every unit of fossil energy consumed in its life cycle”  and reduces net emissions of CO2 by 78.45 percent compared to petroleum diesel. These estimates were overly optimistic, and out of line with other analyses (“Biofuels for oil addicts”, this series). But this report may have had undue influence over the subsequent development of biodiesel around the world.

Biodiesel is Europe’s dominant renewable fuel. It is widely welcomed by environmental groups as a renewable energy that burns more cleanly than diesel. A comprehensive study by the US Environment Protection Agency showed that biodiesel burns with much less hydrocarbons, carbon monoxide and particulate matter in the exhaust, although there was an increase in nitrogen oxides.

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Europe embracing biofuels

As part of a range of measures to reduce greenhouse gas emissions, the EU is encouraging the use of biofuels. The current (2003) EU Biofuels Directive requires 2 percent of the energy for transport to come from renewable sources, including both biodiesel and bioethanol, rising to 5.75 percent by the end of 2010, and 20 percent by 2020.

Transport fuels account for around a quarter of EU’s greenhouse gas emissions and demand for diesel and petrol is fast rising. In 2004, 270 m tonnes of fossil fuels were consumed compared with 180 m tonnes in 1985, and by 2020, fuel consumption will reach 325 m tonnes.

Tax exemptions and national targets introduced across Europe are driving the biodiesel market. Germany has the highest consumption of biodiesel at 1.1 m tonnes in 2004. UK’s reduction of duty on biodiesel by 20 pence a litre in July 2002 has encouraged investment, though UK consumed only 0.3 m tonnes of biodiesel in 2004.

A new EU draft paper released 8 February 2006 outlines a series of measures to promote biofuels in the EU and developing countries. The current voluntary target to have biofuels make up 5.75 percent share of transport fuels by 2010 looks likely to be missed. The EU draft paper admitted that some aspects of biofuels are unsustainable, such as allowing farmers to grow sugar beet for bioethanol on set-aside land, or to convert wine into bioethanol. Set-aside land is also being used to grow oilseed rape for biodiesel.

Europe has dominated the biodiesel industry to-date with 90 percent of global production. The EU produced 2.4 m tonnes of biofuels in 2004, amounting to 0.8 percent of EU petrol and diesel consumption. Bioethanol made up 0.5 m tonnes and biodiesel 1.9 m tonnes. Rapeseed oil is the main biodiesel feedstock, constituting just over 20 percent of EU25 total oilseed production. A special aid for energy crops was introduced by the 2003 CAP reform that pays a premium of 45 euros per ha with a maximum guaranteed area of 1.5 million hectares as the budgetary ceiling.

Biodiesel manufacture appears straightforward starting from oil. It is based on a chemical process of trans-esterification in which fat or vegetable oil is reacted with a simple alcohol such as methanol in the presence of sodium hydroxide as catalyst. The methanol splits the fatty acids from the oil to form methyl esters (biodiesel) and glycerine. The glycerine is separated from the fuel and removed as a marketable by-product (for making soap, for example), while the biodiesel is washed with water and dried. Biodiesel can also be produced from waste cooking oils.

Life cycle analysis ignores external costs

A study carried out in Australia showed that while biodiesel produced from waste cooking oils reduces carbon emissions by 90 percent, biodiesel made from rapeseed oil would save only 50 percent of carbon dioxide emissions compared with using diesel. The UK’s biodiesel industry group commissioned a study that found producing biodiesel from oilseed rape “strongly energy positive”, with an output/input energy ratio of 1.78 where straw was left in the field; where straw was burned as fuel and oilseed rape meal used as a fertilizer, the ratio was even better at 3.71. But these favourable estimates were arrived at by a combination of dubious measures, such as inflating the yield of oilseed to 4.08 t/ha when UK’s 2004 average national yield was only 2.9 t/ha, assigning illegitimate energy credits to coproducts, leaving out legitimate energy embodied in buildings required for processing and in farming implements and machinery, and ignoring many external environmental costs (“Biofuels for oil addicts”, this series).

Research conducted at the Flemish Institute for Technological Research, sponsored by the Belgian Office for Scientific, Technical, and Cultural Affairs and the European Commission, told a very different story, as revealed in a paper presented at an international conference sponsored by the US EPA in 2000. It stated: “..biodiesel fuel causes more health and environmental problems because it created more particulate pollution, released more pollutants that promote ozone formation, generated more waste and caused more eutrophication.” Hence, “The benefits biodiesel fuel offers in terms of reducing greenhouse gas emissions do not justify its use in light of the other environmental damage it causes…”

These conclusions created some consternation in the biodiesel community. But as Jon Van Gerpen of Iowa State University explained, that is because most life cycle assessments ignored external costs, on which little has been published. He confirmed that while biodiesel reduces the impact on the environment by 55 percent in saving fossil fuel use, and reduces greenhouse gas emissions by 40 percent, it has greater impacts than diesel in seven other categories of environmental impacts not normally included in the life cycle assessment (see Box).

Biodiesel has greater environmental impacts than diesel

· Increases inorganic raw materials, the mineral feedstock for making fertilisers, by 100 percent

· Increases non-radioactive wastes, primarily gypsum, a by-product of phosphate fertilizer,  by 98 percent

· Inreases radioactive wastes due to electricity supplied by nuclear power plants by 90 percent

· Increases eutrophication from fertiliser run-offs by 75 percent

· Increases photochemical oxidants due to volatile organic compounds released during the production of biodiesel, especially hexane in solvent-based oil extraction, by nearly 70 percent

· Increases water use (in the esterification process for creating biodiesel) by 30 percent

· Increases acidication from nitrogen and sulphur oxides and ammonia released during the growth of rapeseed crop, also from nitrogen oxides emissions from burning biodisel, by 15 percent.

While not contesting the scientific validity of the analysis provided in the report for biodiesel production from oilseed rape in Belgium, van Gerpen concluded it could not be extrapolated to biodiesel production from soybean in the US, where, he claimed,  those environmental impacts would be minimal, though others would disagree with him.

Rapeseed is indeed a relatively expensive crop to grow, requiring frequent rotation and extensive use of expensive fossil-fuel fertilisers, with major environmental concerns. It is estimated that the cost of producing biodiesel is twice that of conventional diesel. And just to meet the 5.75 percent target, more than 9 percent of the EU’s agricultural area will be needed.

Outsourcing biodiesel

The cost of biodiesel is reduced substantially if energy crops were produced overseas. The UK-based company D1 Oils is developing huge  plantations of jatropha trees (Jatropha Curcas), a non-edible oil crop, all over the third world (“The new biofuel republics”, this series). But this approach will do nothing to improve energy supply security for Europe.

Not only that, it would wreak havoc on food production in third world countries, already reeling from the globalised food trade.

British Petroleum has announced it will fund a $9.4 m project by The Energy and Resources Institute in Andhra Pradesh to produce biodiesel from jatropha. The project, expected to take 10 years, would involve cultivating jatropha on about 8 000 ha currently designated as “wasteland”, and install all the equipment necessary for crushing the seed, extracting oil and processing to produce 9 million litres of biodiesel per annum.

Part of the project will include a full environmental and social impact assessment of elements of the supply chain and life cycle analysis of greenhouse gas emissions.

“Because jatropha is drought resistant and can grow on marginal land, it offers the possibility of an economically, socially and environmentally sustainable contribution to energy security challenges in India,” said Phil New, senior vice president of BP’s fuels management group.

“Recent developments have made green fuels economically attractive in view of the resource potential of this option and the environmental benefits associated with it, along with employment generation and empowerment of the rural population,” TERI Director General, Dr RK Pachauri, said.

The big question is what constitutes “marginal” and “wasteland”, and who really benefits from the biodiesel produced, let alone the environmental costs that have not been factored in (“The new biofuels republics”, this series).

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