Investment in biofuels is dwindling and scepticism is growing
Apr 20th 2015 | From The Economist
MAKING fuel from the solar energy stored in living organisms by photosynthesis is a tempting idea. It sounds inherently green, and so biofuel schemes—ranging from fermenting starch, to recycling cooking oil, to turning algae into jet fuel—have drawn more than $126 billion in investment since 2003, according to Bloomberg New Energy Finance (BNEF), a research outfit. The results, though, are like a Venn diagram whose sets barely overlap. Those biofuels that can best compete commercially are not, in fact, green. Those that are green cannot compete commercially.
The biggest cause of ungreenness is that biofuels made from food crops—or from plants grown on land that might otherwise produce such crops—hurt food supplies. A committee of the European Parliament agreed this week to cap the use of “first-generation” biofuels of this sort. The current European target is for renewables to make up 10% of the energy used in transport by 2020. The new proposal says only seven-tenths of this can come from first-generation fuels. The difference must be made up by more advanced ones based on waste products and other feedstocks that do not impinge on food production. That could mean European demand for advanced biofuels of 14 billion litres by 2020, reckons Claire Curry of BNEF.
Everything else, according to Ms Curry, is at least four years from commercial production. That includes the much-touted idea of renewable jet fuel.
This is promising on a small scale. South African Airways (SAA), in conjunction with Boeing and other partners, is developing fuel based on the seeds of the tobacco plant—once a big crop in the country, but now fallen on hard times. The specially bred strain of tobacco involved is nicotine-free. It is grown by hard-up farmers, who gain two cash crops a year from the tobacco, and then have money for seeds and fertiliser for a third food crop. The seeds’ residue becomes animal feed. Ian Cruickshank of SAA says that the cost of the tobacco-based product matches that of jet fuel refined from fossil sources. The airline expects to use 20m litres of it, blended 50-50 with conventional stuff, by the end of 2017, and 500m litres by the end of 2022.
Fans of the jatropha bush see similar opportunities. This toxic, capricious vegetable has disappointed investors. But, grown properly, its beans can provide both animal fodder and an oil which may readily be made into diesel fuel.
Finding more types of biofuel that hit the sweet spot in the Venn diagram may be tricky, though. Campaigners generally find it easier to fulminate against those which damage the environment or food security than to explain exactly how they ought to be grown. Another controversial issue is genetic modification. This could improve yields, increase resistance to insects and permit biofuel crops to be grown on unirrigated, marginal land. But any kind of GM crop is a tough sell to the green-minded.
Science still has plenty to offer, though. For example, researchers at the University of Manchester, the University of Turku, in Finland, and Imperial College, London have adapted an enzyme currently used to produce bio-butanol to make propane—a more useful product.
Whether such bright ideas can be commercialised at scale is a different question. Some companies, indeed, are starting to give up. Several algae-to-fuel ventures in America are switching to the manufacture of high-value chemicals instead. Sunlight is a great source of energy. Biology may not be the best way of storing it.
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