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    Dutch multinational oil group Rompetrol, also known as TRG, has entered the biofuel market in France in conjunction with its French subsidiary Dyneff. It hopes to equip approximately 30 filling stations to provide superethanol E85 distribution to French consumers by the end of 2007. Energy Business Review - May 13, 2007.

    A group of British organisations launches the National Forum on Bio-Methane as a Road Transport Fuel. Bio-methane or biogas is widely regarded as the cleanest of all transport fuels, even cleaner than hydrogen or electric vehicles. Several EU projects across the Union have shown its viability. The UK forum was lauched at the Naturally Gas conference on 1st May 2007 in Loughborough, which was hosted by Cenex in partnership with the NSCA and the Natural Gas Vehicle Association. NSCA - May 11, 2007.

    We reported earlier on Dynamotive and Tecna SA's initiative to build 6 bio-oil plants in the Argentinian province of Corrientes (here). Dynamotive has now officially confirmed this news. Dynamotive - May 11, 2007.

    Nigeria launches a national biofuels feasibility study that will look at the potential to link the agricultural sector to the automotive fuels sector. Tim Gbugu, project leader, said "if we are able to link agriculture, we will have large employment opportunity for the sustenance of this country, we have vast land that can be utilised". This Day Onlin (Lagos) - May 9, 2007.

    Brazilian President Luiz Inácio Lula da Silva meets with the CEO of Portuguese energy company Galp Energia, which will sign a biofuel cooperation agreement with Brazilian state-owned oil company Petrobras. GP1 (*Portuguese) - May 9, 2007.

    The BBC has an interesting story on how biodiesel made from coconut oil is taking the pacific island of Bougainville by storm. Small refineries turn the oil into an affordable fuel that replaces costly imported petroleum products. BBC - May 8, 2007.

    Indian car manufacturer Mahindra & Mahindra is set to launch its first B100-powered vehicles for commercial use by this year-end. The company is confident of fitting the new engines in all its existing models. Sify - May 8, 2007.

    The Biofuels Act of the Philippines has come into effect today. The law requires all oil firms in the country to blend 2% biodiesel (most often coconut-methyl ester) in their diesel products. AHN - May 7, 2007.

    Successful tests based on EU-criteria result in approval of 5 new maize hybrids that were developed as dedicated biogas crops [*German]. Veredlungsproduktion - May 6, 2007.

    With funding from the U.S. Department of Labor Workforce Innovation for Regional Economic Development (WIRED), Michigan State University intends to open a training facility dedicated to students and workers who want to start a career in the State's growing bioeconomy. Michigan State University - May 4, 2007.

    Researchers from the Texas A&M University have presented a "giant" sorghum variety for the production of ethanol. The crop is drought-tolerant and yields high amounts of ethanol. Texas A & M - May 3, 2007.

    C-Tran, the public transportation system serving Southwest Washington and parts of Portland, has converted its 97-bus fleet and other diesel vehicles to run on a blend of 20% biodiesel beginning 1 May from its current fleet-wide use of B5. Automotive World - May 3, 2007.

    The Institut Français du Pétrole (IFP) and France's largest research organisation, the CNRS, have signed a framework-agreement to cooperate on the development of new energy technologies, including research into biomass based fuels and products, as well as carbon capture and storage technologies. CNRS - April 30, 2007.

    One of India's largest state-owned bus companies, the Andra Pradesh State Road Transport Corporation is to use biodiesel in one depot of each of the 23 districts of the state. The company operates some 22,000 buses that use 330 million liters of diesel per year. Times of India - April 30, 2007.

    Indian sugar producers face surpluses after a bumper harvest and low prices. Diverting excess sugar into the ethanol industry now becomes more attractive. India is the world's second largest sugar producer. NDTVProfit - April 30, 2007.

    Brazilian President Luiz Inacio Lula da Silva and his Chilean counterpart Michelle Bachelet on Thursday signed a biofuel cooperation agreement designed to share Brazil's experience in ethanol production and help Chile develop biofuels and fuel which Lula seeks to promote in other countries. More info to follow. People's Daily Online - April 27, 2007.

    Italy's Benetton plans to build a €61 million wood processing and biomass pellet production factory Nagyatád (southwest Hungary). The plant will be powered by biogas. Budapest Sun - April 27, 2007.

    Cargill is to build an ethanol plant in the Magdeburger Börde, located on the river Elbe, Germany. The facility, which will be integrated into existing starch processing plant, will have an annual capacity of 100,000 cubic meters and use grain as its feedstock. FIF - April 26, 2007.

    Wärtsilä Corporation was awarded a contract by the Belgian independent power producer Renogen S.A. to supply a second biomass-fuelled combined heat and power plant in the municipality of Amel in the Ardennes, Belgium. The new plant will have a net electrical power output of 3.29 MWe, and a thermal output of up to 10 MWth for district heating. The electrical output in condensing operation is 5.3 MWe. Kauppalehti - April 25, 2007.

    A Scania OmniCity double-decker bus to be deployed by Transport for London (TfL) will be powered by ethanol made from Brazilian sugar cane, TfL Coordinator Helen Woolston told a bioethanol conference in London. The bus will join a fleet of seven hybrid diesel-electric buses currently running in London, where TfL plans to introduce 50 more hybrid buses by the end of 2008. EEMS Online - April 24, 2007.

    Virgin Atlantic plans to fly a 747 jumbojet on a mix of 60% biofuel and 40% kerosene in 2008. Sir Richard Branson is collaborating with Boeing to achieve this milestone in aviation history. He already hinted at the fact that the biofuels "it was possible the crops could be grown in Africa, thereby helping to alleviate poverty on the continent at the same time as safeguarding the environment." More details to be announced soon. Telegraph - April 24, 2007.

    A top executive of General Motors, vice-chairman Bob Lutz, says the US should launch a 'Manhattan Project' for biofuels to make a 'wholesale switch' within five years. Kentucky.com - April 24, 2007.

    Canada's new government launches a C$200 million 'Ecoagriculture Biofuels Capital Initiative' aimed at helping agricultural producers construct or expand transportation biofuel production facilities. Government of Canada - April 24, 2007.

    Russian oil company Lukoil reportedly installed production facilities for obtaining biofuels in its refinery Neftochim in the coastal city of Bourgas. Lukoil has over 2500 oil stations in Europe, the largest number of which are located in Bulgaria, which joined the EU this year. Sofia Echo - April 22, 2007.

    The government of the Indian state of Haryana approves three small-scale (1MW) biomass gasification projects, while the Haryana Renewable Energy Development Agency (HAREDA) identifies seven industrial sectors it will help to adopt the biomass gasification technology to meet their captive thermal and electrical requirements. Economic Times - April 21, 2007.

    The Philippine Coconut Authority (PCA) is planning to build a coconut oil biodiesel plant in Ivisan, Capiz (a province in the Western Visayas region) by the middle of this year in response to the growing demand for biodiesel. News Today (Iloilo City) - April 20, 2007.

    Scientists working for Royal Nedalco (involved in cellulosic ethanol production), the Delft University of Technology and a firm called Bird Engineering have found a fungus in elephant dung that helped them produce a yeast strain which can efficiently ferment xylose into ethanol. The researchers consider this to be a breakthrough and see widespread application of the yeast within 5 years. More info to follow as details emerge. Scientific American - April 19, 2007.

    As part of its 'Le dessous des cartes' magazine, Europe's culture TV channel ARTE airs a documentary about the geopolitics of sustainable transport tonight, at 10.20 pm CET. Readers outside of Europe can catch it here. ARTE - April 18, 2007.

    Spain's diversified company the Ferry Group is investing €50 million into a biomass plantation in new EU-memberstate Bulgaria. The project will see the establishment of a 8000ha plantation of hybrid paulownia trees that will be used for the production of fuel pellets. Dnevnik, Bulgaria - April 18, 2007.

    Bioprocess Control signs agreement with Svensk Biogas and forms closer ties with Swedish Biogas International. Bioprocess Control develops high-tech applications that optimise the commercial production of biogas. It won Sweden's prestigious national clean-tech innovations competition MiljöInnovation 2007 for its 'Biogas Optimizer' that accelerates the biogas production process and ensures greater process stability. NewsDesk Sweden - April 17, 2007.

    A joint Bioenergy project of Purdue University and Archer Daniels Midland Company has been selected to receive funding by the U.S. Department of Energy to further the commercialization of highly-efficient yeast which converts cellulosic materials into ethanol through fermentation. ADM - April 17, 2007.

    Researchers at Iowa State University and the US Department of Agriculture's Agricultural Research Services (ARS) have found that glycerin, a biodiesel by-product, is as effective as conventional corn-soymeal diets for pigs. AllAboutFeed - April 16, 2007.

    U.S. demand for uranium may surge by a third amid a revival in atomic power projects, increasing concern that imports will increase and that limited supplies may push prices higher, the Nuclear Energy Institute says. Prices touched all time highs of US$113 a pound in an auction last week by a U.S producer amid plans by China and India to expand their nuclear power capacity. International Herald Tribune - April 16, 2007.

    Taiwan mandates a 1% biodiesel and ethanol blend for all diesel and gasoline sold in the country, to become effective next year. By 2010, the ratio will be increased to 2%. WisconsinAg Connection - April 16, 2007.

    Vietnam has won the prestigious EU-sponsored Energy Globe award for 2006 for a community biogas program, the Ministry of Agriculture and Rural Development announced. ThanhNien News - April 13, 2007.

    Given unstable fossil fuel prices and their negative effects on the economy, Tanzania envisages large-scale agriculture of energy crops Deputy Minister for Agriculture, Food Security and Cooperatives, Mr Christopher Chiza has said. A 600 hectare jatropha seed production effort is underway, with the seeds expected to be distributed to farmers during the 2009/2010 growing season. Daily News (Dar es Salaam) - April 12, 2007.

    Renault has announced it will launch a flex-fuel version of its Logan in Brazil in July. Brazilian autosales rose 28% to 1,834,581 in 2006 from 2004. GreenCarCongress - April 12, 2007.

    Chevron and Weyerhouser, one of the largest forest products companies, are joining forces to research next generation biofuels. The companies will focus on developing technology that can transform wood fiber and other nonfood sources of cellulose into economical, clean-burning biofuels for cars and trucks. PRNewswire - April 12, 2007.

    BioConversion Blog's C. Scott Miller discusses the publication of 'The BioTown Source Book', which offers a very accessible introduction to the many different bioconversion technologies currently driving the bioenergy sector. BioConversion Blog - April 11, 2007.

    China's State Forestry Administration (SFA) and the China National Cereals, Oils and Foodstuffs Import & Export Corp., Ltd. (COFCO) have signed a framework agreement over plans to cooperatively develop forest bioenergy resources, COFCO announced on its web site. Interfax China - April 11, 2007.

    The Ministry of Agriculture and Livestock of El Salvador is speeding up writing the country's biofuels law in order to take advantage of the US-Brazil cooperation agreement which identified the country as one where projects can be launched fairly quickly. The bill is expected to be presented to parliament in the coming weeks. El Porvenir - April 11, 2007.

    ConocoPhillips will establish an eight-year, $22.5 million research program at Iowa State University dedicated to developing technologies that produce biofuels. The grant is part of ConocoPhillips' plan to create joint research programs with major universities to produce viable solutions to diversify America's energy sources. Iowa State University - April 11, 2007.

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Sunday, May 13, 2007

IEA study: large potential for biomass trade, under different scenarios

A new study by the International Energy Agency's Bioenergy Task 40, the leading expert organisation studying the potential for international bioenergy trade, says the use of sustainably produced biomass for energy and liquid biofuels can be increased markedy from the current level over the next decades, when fossil fuels become scarce and more expensive because of the depletion of conventional oil resources.

Drawing on discussions amongst the world's leading energy and bioenergy experts, the report made by researchers from the Lappeenranta University of Technology (Finland) created several scenarios that show different pathways in which this potential may be brought to market by 2020. Each pathway, presented as a prototypical scenario, has different economic, environmental, social and political effects that determine how large, commercially viable and sustainable biomass trade will be. The four scenarios were titled the 'Prosperous Green World', the 'Rich Global Village', the 'Rich Local Village' and 'Small is Beautiful'. No doubt, readers will prefer one alternative over the other (let us know which one you think is most realistic).

Technical sustainable potential
All scenarios start from the basic assessments of the technical potential for biomass and biofuel production (this potential is 'value free' and not determined by economics or politics). Despite the current minor role of bioenergy in the world energy supply, biomass has, in the long run, potential to become a much more important source of energy.

In the most optimistic Bioenergy Task 40 assessments, long term bioenergy potential is considerably larger than the current global energy demand from all sources (400EJ from coal, oil, gas, nuclear), without competing with food and wood production, forest production and biodiversity. The maximum potential for sustainable biomass production in 2050 is estimated to be around 1100 EJ, or around 3 times the total amount of energy used today. A more realistic and average long term potential is thought to be between 250 to 500EJ.

Table 1 (click to enlarge) gives a summary of this potential in the light of the latest studies, per biomass category and shows the main assumptions made in the determination of the potentials. The researchers confirm that Latin America, Sub-Saharan Africa and Eastern Europe as well as Oceania and East and North-East Asia have the most promising potentiality to become important biomass producers in the long run (see earlier post).

Trade in its infancy
Even though the technical potential for biofuels and biomass is huge, current trade of biomass for energy remains extremely small. Today, indirect trade of biofuels through trading of industrial round wood and material byproducts composes the largest share of the trade. The trading represents approximately 5% of the total use of biofuels in industrialised countries (see table, click to enlarge).

The market is set to grow rapidly, though, and can go many ways. This is so because of the complexity of this emerging market. Bioenergy production and trade integrates a large series of economic, social, and environmental factors that are in turn dependent on national and international policies, trade rules, subsidies, taxes, scientific and technological developments as well as on the dynamics of energy and carbon markets.

Four scenarios for biomass trade
In order to assess the advantages, risks and uncertainties of the different pathways of bringing biomass to market, the researchers and working groups created two sets of scenarios. An international and a Finnish working group provided the inputs, whereas questionnaires based on these inputs and send to the world's leading experts (amongst them the members of the EUBIONET network) provided answers. (Here, we only discuss the results from the international workshop).

A total of 81 separate 'driving forces' and 150 questions were ideated by the working group and joined in clusters (in order of importance: economy, policies, environment, technology, production, trade, communication, consumers/suppliers, entrepreneurs and social). These factors were then given a weight of significance, and taken as a starting point to design the dimensions of the four scenarios (diagram, click to enlarge).

Per scenario, a basic SWOT analysis was carried out, showing its strengths, weaknesses, opportunities and threats. Even though all scenarios (including those of the Finnish group) foresee a considerable rise in global biomass trade by 2020, the SWOT analysis determines how large, how commercially viable and how sustainable such international biomass trade will be.

Scenario 1: the 'Prosperous Green World'

Under this scenario (click to enlarge) the state of the biomass market in 2020 will look as follows:
:: :: :: :: :: :: :: :: ::
In the year 2020 the consumption and international trading of biomass has increased remarkably compared to the current situation. Strong and global green regulation has been the main reason for the past development. All the cheap traditional biomass resources are in use and new resources, e.g. dedicated crops, are being developed and utilised. Relatively free market conditions of biomass have stimulating new innovations regarding the production and utilisation of dedicated energy crops.

A transparent certification system of biomass production and trade is in use and it is based on international agreements. The second generation technologies are widely in use in the production of synthetic biofuels. Because of growing utilisation of the energy crops, countries with large biomass resources such as Russia, Indonesia, Brazil etc. have now a more important role as biomass producers than in the beginning of the 21st century. It is unclear if trade between countries will happen on an important scale or will it be limited only to the surplus of biomass that can not be consumed locally. Big consumers of biomass are located in Western Europe, South-East Asia and America. E.g. Brazil has a large surplus of crops and woody biomass and the country is probably taking part in global biomass trade as an exporter. China has invested in biomass production by planting forests. Sustainable development puts more emphasis on the education system and people now more aware of sustainability issues.

An increased worry about the overexploitation and unsustainable utilisation of biomass resources has been taken into account in international agreements on free trade and mitigating the climate change. Several markets, other than energy, have developed and benefited from the sustainable utilisation of biomass. For example, new markets for farmers and forest industry have opened up globally. Most of the forest industry’s mills can be now considered as biorefineries refining biomass into traditional forest products, but also liquid biofuels and chemicals.

Also the global employment situation in general has begun to look brighter and a myriad of new jobs exists especially in the production of biomass in developing countries. This has improved the economical situation in many poor countries.

The driving forces and development route of biomass market during the years 2006-2020 show the following features: During the period between 2006 and 2020, there had been a growing need for a certification system increasing the number of cases of unsustainable production of biomass, but it is not known whether the systems voluntary or obligatory. In other words, the path towards the certification system of biomass for energy remained unclear. In addition to the need of a certification system, sustainable development has been one of the key drivers of the biomass market. Also the climate change and a concern about the environment have had an influence on the development of biomass exploitation in energy production.

International agreements and long-term policies have kept the biomass production, utilisation and trade as a global issue. Additionally, incentives and obligations, technological and organisational improvements and innovations have been important driving forces for the development.

Consumers have played the most important role in the development of the biomass market. Therefore, the public opinion has been an essential factor affecting the emergence of the global market of biomass. Communication towards consumers has been in a critical role to enhance the trade of biomass and its utilisation. With a strong public and political support it is possible to plan for future success. In addition, specific education and dissemination related to bioenergy issues has also had an important role.

The year 2013 was identified as an intermediate stopping point. If “Green prosperous” comes true, certain things need to happen by then. There can not be any surprises and the development can be called “no-surprise strengthening of present trends”. In addition, investing in new green projects has to be identified as an opportunity for economic profit. Also, biomass has to be accepted as a basematerial that is readily available with a high security of supply. If things develop according to the description of the green prosperous scenario, all sectors of bioenergy of business will develop positively.

Scenario 2: the 'Rich Global Village'

The state of the biomass market in 2020 under this scenario may be described roughly in the following terms: the biomass market has become global and large trade streams of biomass from dedicated production areas to the purchasing regions of biomass are a reality. Also large quantities of refined biofuels are traded worldwide. The world can be seen as a paradise full of biomass ready for utilisation and for making money.

In spite of an economically orientated world, sustainability is a part of the business, but not dominating. The EU is the global leader in promoting bioenergy. The massively expanding biomass market in the EU is led by public utilities. The forest biomass in the EU has been certified as sustainable and the utilisation of forest resources has increased remarkably since the beginning of the 21st century. People are keeping themselves away from too strict green thinking because it might slow down the economic development in the short run.

The EU and North and South America are the major players in the biomass market. Brazil became certified sustainable and it attained a position as a major player in biomass trade and is the largest supplier of ethanol for the world market. This has been possible because trade barriers to the import of biomass to the United States and the EU have been removed. The biomass market would grow even faster if big players like the United States, China and India ratify the new Kyoto agreement starting in the year 2013. Energy consumption has grown because decision making of consumers is mainly based on cheap prices. Fast growth in energy consumption has led to the situation where fossil energy sources are becoming scarce, but new renewable energy sources have started to diversify the global energy supply. Palm oil is one of the major biomass products and its production in Indonesia, Malaysia, Vietnam and Brazil fulfils the prevailing loose sustainability requirements.

Most of the biomass production in Africa is not certified as sustainable or secure, but on the other hand in Africa large volumes of biomass are still used locally mainly for cooking and heating. Many investments have been made in bioenergy in regions where the production potential of biomass is high, e.g. in Brazil.

Biomass producers will benefit highly if “Rich global village” comes true. In addition, logistics companies will prosper because large quantities have to be transported from the production regions to the customers. Also global refiners and distributors of biofuels will profit from the market conditions.

The driving forces and the development route of biomass market during the years 2006-2020 show that the market of biomass has grown as fast as possible, with the EU being an example. The status of the biomass market is quite similar to commodity markets, such as the oil market. The main drivers have been dwindling oil resources, the fear of even higher fossil fuel prices and socio-economical impacts of high fossil fuel prices. These factors were the main forces for enhancing large scale and global biomass production and utilisation. There was some uncertainty during the timeframe whether there was enough movement towards biomass utilisation without a high oil price or price peak because of an economically orientated world. In addition to the development of fossil fuel prices, the energy policy including instruments, such as energy taxation, carbon trade, feed-in tariffs and green certificates, can be considered as driving forces of the biomass market. However, most of the energy policy measures have been dumped, except global carbon trade that was needed to enhance the market position and local use of biomass.

Year 2013 as an intermediate stopping point: By the year 2013, the removing of trade barriers of biomass should be well on the way and there should be perceivable signs of development towards a commodity market of biomass.

Scenario 3: the 'Rich local village'

Under this scenario, the state of biomass market in 2020 looks like this: The rich local village is in other respects based on a wealthy unregulated economy, but external trade is limited.

Striving towards self sufficiency and independence from imported energy dominates the energy policy. There has been sustained economic growth, and a high level of technological development has been achieved in several sectors since the year 2006. Environmental and social sustainability have not been the priorities, however they have been taken care of in such a way that economic performance has not been impacted.

High import duties of fossil fuels and other economical incentives for renewable energy have improved the competitiveness of bioenergy and boosted its consumption. A great deal of subsidies have been spent on R&D and investments in bioenergy and other renewable energy technologies for meeting the policy goals. The conditions of this scenario boost the internal production and trade of biomass, because the import of biomass has to compete with subsidised internal biomass resources and products. New local biomass sources have been introduced and they are now widely utilised in energy production.

In energy production, due to availability constraints, the use of local fuels is maximised and all kinds of agricultural by-products, e.g. manure and straw, are used for energy production as well as industrial by-products and forest residues from pre-commercial thinning and final logging. The issues of biodiversity and impacts on soil conditions in the production of biomass are in the background. The price of biomass has increased close to the heavily taxed imported fossil fuels and there is a fierce competition for the limited local biomass resources.

The traditional biomass-based industries, like the forest industry, are coping with stronger competition for raw material than in the past. There has been a significant development in the use of liquid biofuels in the transportation sector in the EU, where biodiesel is the dominating “green” fuel.

Driving forces and development route of biomass market during the years 2006-2020 are largely determined by the aim to sustain economic welfare. Therefore, the economic issues and situation have guided the development of the bioenergy sector, without significant focus on environmental performance. Efficiency has also been recognised only from an economic point of view and that is why all the resources are utilised as efficiently as possible. Protectionism of the internal market is the other dominating characteristic of this scenario.

Without measures of energy policy, the competitiveness and security of the supply of local biomass would not be able to compete with import.

Year 2013 as an intermediate stopping point: by the year 2013, if the world is going towards the “Rich local village”, the EU has given strong preference to its internal market on energy. In addition, imported energy and some biomass products such as ethanol that can be replaced by local products have been subjected to higher import duties. In the “Rich local village” biomass producers, plants and bio-refineries will mostly benefit. Also all sectors of bioenergy (heat, electricity and liquid biofuels etc.) will develop.

Scenario 4: 'Small is beautiful'

State of the biomass market in 2020: in this scenario the world consists of small, self-sufficient and isolated communities. The environmental and social aspects, especially on energy, have high priority in these communities. E.g. the EU can be regarded as a community of this type. The international trade has not grown and the general economic growth of the world has been lower than it was expected in 2006.

Some regions – “the leading communities” – have been more successful in increasing their economic welfare than the rest. The relatively isolated economy and strong internal trade is specific to the communities of this world. To enhance this development, for example in the EU, more independence and power has been allocated to the member states to decide their own energy policies. This has enabled the maximised utilisation of local biomass, solar energy, wind energy and enhanced the competitiveness of local fossil energy sources, as well.

There is a lot of regulation on everything, e.g. the strict regulation for international trade. Therefore, local production is important and due to the lack of international trade the prices of industrial raw material and oil have increased.

In general, the production of agricultural products and energy crops is local. Environment and the effective utilisation of raw-materials have been taken care of profoundly, e.g. more cars are using biofuels in cities and local small-scale renewable energy systems like biofuel fired CHP plants are widely applied. In addition, energy efficient neutral greenhouses are widely in use. Biomass producers and biofuel refineries are mainly local companies. The land area dedicated to biomass production has been increased. Concern about the state of the environment and climate change has led to decreasing primary energy consumption, through energy efficient technologies and measurements such as improved insulation of buildings and energy efficiency of the industrial sector.

In addition, there has been a strong emphasis on promoting public transport systems. Small-scale combined power and heat production has become a commonly utilised competitive technology on a smaller scale than previously. Recycling and reuse of materials has increased remarkably since 2006 and it is implemented on a large scale. The community of this scenario can be called a recycling society. In addition to recycling it has to be decided where to utilise different biomass or other energy sources and where to grow food products.

The production of liquid biofuels is local and it is based on traditional small-scale as well as second generation technologies. The demand for biofuels has increased because of the increased price of oil. The high price of oil has made smaller cars that consume less fuel more popular. The basic idea in this scenario is that the lack of access to cheap external energy sources drives the development of energy market within the communities. The high cost of energy has been one factor that has caused a lack of overall economic growth.

Particularly successful communities which have efficiently utilised their local energy resources, and developed technology in the field of energy efficiency and renewable energy have benefited from the circumstances of this scenario.

Driving forces and development route of biomass markets during the years 2006-2020:
This scenario has mainly been driven by policy and consumers. Together with policy, public opinion and general thinking have been two of the key drivers. Consumers are aware and concerned about the state of the environment which has enormously influenced the development of the bioenergy sector and the actions to enhance it. In addition, the emphasis is on localisation.

When the volume of economy of a community is large enough for self-sufficiently, “Small is beautiful” can be regarded as a rather stable society in terms of the environment and with modest growth in economy and welfare. On the contrary, competition with other economic areas will be severe and without a constant adaptation of policy, after 2040 the future of the “Small is beautiful” society can go shipwrecked again within the international world.

Year 2013 as an intermediate stopping point: if the world looks like “Small is beautiful” in 2020, by the year 2013 first generation biofuels have to be used extensively instead of waiting for the second generation, and attention must be addressed to the current social problems, which may hinder the development. If this scenario comes true, the same businesses as today will succeed, but companies will be smaller. Big companies are no longer in control of the whole energy system, but there is more diversity in energy suppliers. It is necessary to develop and to invest in new and more efficient energy technologies in order to cope with challenges of the diversifying energy supply and improved utilisation of raw materials.

As the scenarios show, bioenergy production and trade can go many different ways. The complexity and multitude of factors involved allows for a range of outcomes: from very large global trades in which the pure, hard logic of economics and profit rules, to the localised, socially sustainable and equitable use of biofuels at the regional level.

We advise the reader to analyse the scenarios in combination with the IEA Bioenergy Task 40 studies on the global potential of biomass production (earlier post), on the sustainability of tropical biofuels such as ethanol from sugar cane (earlier post) and on the effects of stringent sustainability criteria on the commercial viability of biofuels and biomass (earlier post).

Read this way, this kind of scenarios offer a useful tool for planners, investors, policy makers, NGOs and, why not, individual consumers, who are faced by a rapidly developing market that is currently quite chaotic. Confusion exists about the real potential of biomass and biofuels, about the effects on food security, the environment and the socio-economic sphere. Studies like this one show that some of the panic around biofuels is totally unfounded, but that on the other hand, a critical assessment of and a longterm view on where this industry is going remains needed more than ever.

More information:
Jussi Heinimö, Virpi Pakarinen, Ville Ojanen and Tuomo Kässi, International Bioenergy Trade - scenario study on international biomass markets in 2020 [*.pdf], Lappeenranta University of Technology, Research Report 181, prepared for the IEA Bioenergy Task 40, 2007.

Biopact: A look at Africa's biofuels potential, July 30, 2006 [showing the IEA Bioenergy Task 40's longterm assessments of global bioenergy production potential].


Thomas Ruddy said...

In the fourth paragraph you mention "the most optimistic Bioenergy Task 40 assessments." Be aware that according to my information this scenario is for the highly hypothetical case that modern farming knowledge be distributed ideally worldwide.

7:50 PM  
Biopact team said...

Hi Thomas,
yes, the most optimistic scenario (which was earlier put at 1450 EJ/year by 2050, but steadily lowered) is based on several assumptions:
-a high animal feed conversion efficiency
-an animal production system in which no land is used (no free ranging, but all animals produced in efficient, 'industrial' systems as we know them in the US/EU)
-a 'super high' crop production technology level (meaning technological and scientific progress keeps increasing productivity at the same pace as during the past decades)
-a mix of rainfed and irrigated agriculture

If these criteria are met by 2050, around 1100EJ can be produced in an explicitly sustainable manner (that is without threatening the food, fuel and fodder supplies, biodiversity and forests, taking into account that by then, populations will have increased considerably).

If population growth decreases and reaches the UN Population Division's 'Low scenario', then there will be a far larger potential.

The UN has been lowering its projections for population growth three times in a row now (in three revisions); it now seems almost certain that global population levels will reach their climax in 2050 and then decline.

So if we manage to build up an efficient and sustainable bioenergy capacity by 2050, we are 'saved' when it comes to energy supplies and climate change. Let's not forget that biomass is renewable, so the 1100EJ would re-grow year after year. Unlike in the oil paradigm, plagued by uncertainty over depletion dates ('Peak Oil'), with bioenergy we know and can project much better how much energy will be available at any given moment, and where.

We earlier wrote a small piece on the two authoritative studies showing the long-term, global bioenergy potential: Global biofuels potential, focus on Africa.


9:41 PM  

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