What is it?
Biofuels can broadly be defined as any fuel derived from biomass, which is living or recently living plant material, and offer some of the most promising alternatives to decrease dependence on traditional fossil fuel sources (oil, gas, petrol, coal, etc.). Biofuels offer the only immediate alternative to fossil fuels, help limit impact on the environment from fuel emissions, and are the only direct substitute for oil in transport that is available on a significant scale in most countries. All new biofuels production under the recently-passed Renewable Fuels Standard (RFS) must meet stringent greenhouse gas reduction targets. World demand for energy is expected to more than double by 2050 and more than triple by the end of the century. At the same time, oil prices are rising and fossil fuel reserves are diminishing. The alleviation of dependence on imported oil is a major concern for many countries. Biofuels have been identified as one component in reducing countries’ dependence on foreign oil and its contribution to climate change.
Does it work?
An important measure of fuel efficiency is the energy returned on the energy invested in producing that fuel. The production of any fuel requires the investment of energy. For instance, making petrol requires pumping crude oil, transporting the crude oil and refining it into petrol. Similarly, producing biofuels requires cultivating a feedstock, usually an agricultural crop, harvesting the crop, transporting it to a site and converting the feedstock into biofuel. Most research shows that the energy balance for biofuels is positive; more energy is returned than invested in the production of a biofuel. The energy required to produce biofuels is declining every year as more research is conducted into how to best produce biofuels. In fact, most studies show that biofuels return more energy than is invested in producing them.
Economic impact of biofuels
Of the world’s 47 poorest countries, 38 are net oil importers, and 25 of these import all of their oil. Yet many of these countries have substantial agricultural bases and are well-positioned to grow highly productive energy crops. Over the last 10 years, biotech corn has produced an additional 1.9 billion gallons of ethanol, enough to power more than 2.5 million cars for an entire year. The World Bank reports that biofuel industries employ about 100 times more workers per unit of energy produced than the fossil fuel industry. Biofuels can also help limit demand for petroleum and hence contribute to limit the upward pressure on petroleum prices. Given that oil supply does not expand easily, meeting an increase in demand would likely result in a short-term price increases.