Researchers propose Green Biofuels Index

The debate over whether biofuels like corn based ethanol are better for the environment than fossil fuels has left many consumers confused and unsure where to fill their gas tanks.

Much of this confusion could be eliminated with a biofuels rating system that would reflect the positive or negative environmental impacts of a particular fuel, according to a group of University of California, Berkeley, researchers. Such a ratings system would take into account all environmental aspects of biofuels processing and production, from the way biofuel crops are tilled and fertilized to the kinds of energy - coal, natural gas or biomass, for example - used to process them.

Such a system would not only help consumers make decisions about where to fuel up but, perhaps more importantly, stimulate competition among fuel producers to market the greenest fuels possible, driving the less-green biofuels out of the marketplace in favor of ones that really serve the planet.

Such a labeling system would reveal, for example, that a fuel such as ethanol varies widely in its environmental merit depending on its production history, according to co-author Michael O'Hare, UC Berkeley professor of public policy. Some ethanol in current use is not much better, or is even worse, for the environment than gasoline, while other ethanol is beneficial.

Farrell, O'Hare and colleagues in UC Berkeley's Energy and Resources Group and in the Goldman School of Public Policy disseminated a research report on the issue today in hopes of stimulating discussion around the nation on how best to formulate such a labeling system. Called "Creating Markets for Green Biofuels: Measuring and Improving Environmental Performance" [*.pdf] the study was partially supported by the Natural Resources Defense Council and the National Science Foundation's Climate Decision Making Center at Carnegie Mellon University.

Their report presents several case studies of specific biofuel production pathways using a lifecycle analysis of the inputs to feedstock production and processing, but excluding market-mediated effects.

To create the 'Green Fuel Index' and to implement it, the researchers recommend four steps: 1. Measure the global warming intensity of biofuels ('greenhouse gas emissions balance'). 2. Measure the overall environmental performance of biomass feedstock production. 3. Develop and implement a combined Green Biofuels Index. 4. Research better practices, assessment tools, and assurance methods.

An example of outcomes of measuring the environmental performance of some biofuels can be found in the table (click to enlarge):
bioenergy :: biofuels :: energy :: sustainability :: ethanol :: biodiesel :: biomass :: environmental sustainability :: development :: non-tariff barriers ::

"We think it's feasible to design a workable and effective ratings system for green biofuels today with the types of information that many farmers and many biofuel production facilities already collect," said study co-author Alex Farrell, assistant professor of energy and resources and director of the campus's Transportation Sustainability Research Center. "The American biofuels industry can produce much greener biofuels than they do today, and I think they can do so at reasonable prices and at a profit."

"Biofuels link markets in fuel, food and land in quite complicated ways, and there are no rules about how to judge the environmental and global warming impacts of producing and processing these fuels," said Farrell, who was appointed this week to an international roundtable to draft global standards for sustainable biofuels production and processing. "As these technologies get better and cheaper, there will be competition for use of land, whether for food or wilderness. This is inherently a problem of biofuels. A discussion of biofuel labeling could help the domestic debate about how to develop biofuels."

The report lays out a range of possible options for a Green Biofuels Index, from voluntary labeling akin to the "organic" food label, to mandatory labeling like today's nutrition information, to more stringent government regulations like those required by renewable portfolio standards, which mandate that a state generate a percentage of its electricity from renewable sources. While Farrell thinks a star system, like the Michelin stars, would be more flexible than a gold-silver-bronze medal system, he stressed that any system could take into account the issues consumers seem most concerned about.

"I think people understand that energy is a product that has lots of environmental implications, and if they had the choice to know what was good or bad, I bet they would like to know that," said Farrell. "It's quite likely that, even if it were required as part of regulation, fuel makers and distributors could develop their own brand and their own marketing strategies around how green their fuel is, using the type of information this will provide."

Today, consumers in the United States have only a few biofuel choices: E85 ethanol, 95 percent of which comes from corn; biodiesel, which comes primarily from soybeans but also from canola and sunflower oils and waste cooking oil or grease; and what's called renewable diesel, which is made from biomass injected into the petroleum diesel process. But Farrell predicts that other fuels will soon reach the market, including biobutanol and synthetic diesel, which is made entirely from biomass.

New research, such as that planned by the Energy Biosciences Institute soon to be established at UC Berkeley and Lawrence Berkeley National Laboratory with $500 million in funding from BP, could produce much greener biofuels, Farrell noted.

If biofuels with the same chemical identity can be distinguished by a rating system such as the authors propose, "markets for green biofuels would stimulate a new wave of innovation, creating high-value and truly green biofuels, and enhancing energy security by diversifying our energy sources," they wrote.

The UC Berkeley group urges environmental, agricultural and regulatory agencies to join forces with local, state and national governments to develop this Green Biofuels Index, and that funding agencies should research ways to measure the environmental performance of biofuels, such as their impacts on global warming or farmland.

Co-authors on the paper also include graduate students Brian T. Turner and Richard J. Plevin of UC Berkeley's Energy and Resources Group. Turner also is with the Goldman School of Public Policy. Plevin was supported by a National Science Foundation Graduate Research Fellowship.

Biopact reaction
We will soon analyse the report more in-depth, but our first reaction is that this is indeed one of the possible ways forward to create a 'sustainable' biofuels industry. Bioethanol produced in Brazil, for example, would clearly fall in the greenest category and receive most stars (earlier post).

However, there are some fundamental problems associated with such an index.

First of all, as it is proposed by the UC Berkeley researchers, the index only looks at environmental sustainability criteria. Even though this is an important measure, it says nothing about the historic opportunity for countries in the South to use biofuel production as a development tool to create prosperity. Given ever-increasing oil prices - and taking 'Peak Oil' seriously - developing countries can produce biofuels for their domestic market to offset some of the negative effects of high oil prices (now and certainly in the future). Biofuels are a buffer against high energy prices, regardless of whether they are produced sustainably or not. The strongly negative effects of energy insecurity and high prices on the economies of developing countries - which all have a 'high energy intensity' - is well known. Biofuels can mitigate some of these effects and allow for smooth development even if oil supply crises emerge.

However, since domestic fuel consumption in many of these countries is still extremely low compared to that of the industrialised countries, they can also look at exports, after having satisfied their own needs.

Over 50 countries in the South have the capacity to produce enough food for their growing populations, while at the same time growing such a large amount of energy crops that they can replace all oil imports and have enough to spare to supply world markets. This capacity promises a large new export opportunity, that would result in revenues that can be invested in crucial development sectors (poverty alleviation, infrastructure, rural development, education, health care, etc...).

Now if markets in the North decide to apply stringent environmental sustainability criteria that effectively were to act as a non-tariff barrier to this export opportunity, then markets in the North would be responsible for a missed opportunity for development in the South.

This scenario would then call for a compensation mechanism. Many developing countries, like Malaysia and Indonesia, have already gone so far as to say that too strictly defined environmental criteria are a kind of 'green imperialism'. They have publicly made statements like "the West has destroyed 98% of its environment which allowed it to develop and industrialise, and now it wants to stop us from doing so, without compensating us for it." This point must be taken seriously.

Major development organisations (amongst them the UN) agree to the pragmatic and realistic principle which says that developing countries have the fundamental right to develop in a sovereign way. The 'sustainable development' paradigm is a noble starting point, but if it is to be implemented in the South as well, it requires considerable amounts of financial support from the North. There are no signs that the industrialised countries are really committed to offer this support (e.g. only a handful of them are on track to reach the goal of dedicating 0.7% of their GDP to international development aid. They made this committment years ago. They have until 2010. Analysts are confident that the vast majority will not reach this promised target.)

In case the North does introduce a stringent environmental sustainability index for biofuels, many different scenarios can be imagined as regards to the actions and positions in the South. If deemed too strict, biofuel producers may simply switch away from the markets they currently prefer (the EU/US/Japan) and supply countries that do not adhere to the same criteria (e.g. it will be extremely difficult to convince a country like China to introduce such an index.) A global effort is clearly needed, in order to ensure that biofuels everywhere are produced sustainably, and that they do not negate the opportunity for the South to tap into a new opportunity for trade, energy security and post-Peak Oil preparedness.

Secondly, the index as it is currently proposed by the researchers does not take into account more practical 'social' sustainability factors. Biofuels can be produced in a way that enhances social inequality, pushes small farmers out of the market, perpetuates a system of seasonal labor and causes conflicts over land-ownership. But they can also be anchored into a context of true social responsibility and be a weapon in the fight against poverty. Brazil's Social Fuel Seal is one example of how social sustainability can be measured and assured. The index should take this aspect of biofuel production into account as well.

Thirdly, such an index would have difficulties tracking the sustainability of imported biofuel feedstocks, unless it is implemented globally. This will require a concerted effort and is not likely to succeed, for the reasons outlined above. The South will only commit to such criteria if it is seriously compensated for the missed opportunity of developing in an 'unsustainable' manner. Developing countries will ask for a kind of compensation that takes into account the manner in which the wealthy, industrialised North has developed through time, namely by destroying its own environment totally (e.g. deforestation in Europe and North America, which since the 18th century and the Industrial Revolution until today, fueled their development) and by relying on cheap and abundant oil resources that are now being depleted. It would not be too difficult to calculate this 'historic' bonus the West took for itself, and to transfer it to the South. Without such a concrete transfer, expressed in monetary terms, developing countries will rightfully claim that the Green Fuels Index is a tool of 'green imperialism' and refuse to adhere to it.

More information:
Brian T. Turner, Richard J. Plevin, Michael O’Hare, "Creating Markets for Green Biofuels: Measuring and improving environmental performance" [*.pdf] UC Berkeley, Transportation Sustainability Research Center, Research Report UCB-ITS-TSRC-RR-2007-1, April 2007.