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The Global Benefits of Biofuels

How can biofuels help the developing world and the environment?

June 15, 2006

How can biofuels help the developing world and the environment?

Biofuels have the potential to truly benefit not only the environment, but developing nations as well. In part two of our series, we present the effects biofuels can have on a global scale as gathered by the “Biofuels for Transportation” project of the Worldwatch Institute, German Agencies for Technical Cooperation (GTZ), and Renewable Resources (FNR).

What impacts can biofuel have on the developing world?

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.

How efficient is biofuel production and how can it influence unemployment?

The World Bank reports that biofuel industries require about 100 times more workers per unit of energy produced than the fossil fuel industry. The ethanol industry is credited with providing more than 200,000 jobs in the United States and half a million direct jobs in Brazil.

How much does current fossil fuel use contribute to greenhouse gasses?

Transportation, including emissions from the production of transport fuels, is responsible for about one-quarter of energy-related greenhouse gas (GHG) emissions and that share is rising.

What impact can the use of biofuels have on greenhouse gas emissions?

Energy crops have the potential to reduce GHG emissions by more than 100% (relative to petroleum fuels) because such crops can also sequester carbon in the soil as they grow.

Just how much reduction are we talking about?

Estimated GHG reductions for biofuel feedstock include a 70-110% reduction for fibers such as switchgrass and poplar, 65-100% wastes like waste oil, harvest residues and sewage, 40-90% for sugars such as sugar cane and sugar beet, 45-75% for vegetable oils including rapeseed, sunflower seed and soybeans — and 15-40% for starches such as corn and wheat.

What are the future implications of biomass energy?

In the future, the type of processing energy used will be more relevant. A biofuel plant that uses biomass energy will contribute far more to reducing GHG emissions than one using coal energy.

How much has Brazil invested in the production of biofuels?

Between 1975 and 1987, ethanol saved Brazil $10.4 billion in foreign exchange while costing the government $9 billion in subsidies.

But, has this investment paid off?

Even with subsidies, the economic savings with biofuels from avoided oil imports can be considerable and this investment paid off even more in subsequent years. Studies show that from 1976-2004, Brazil’s ethanol production substituted for oil imports worth $60.7 billion — or as much as $121.3 billion including the avoided interest that would have been paid on foreign debt (based on debt previously incurred importing oil).

How can increased biofuel production benefit farmers?

In Brazil, the government hopes to build on the success of the Proálcool ethanol program by expanding the production of biodiesel. All diesel fuel must contain 2% biodiesel by 2008 and 5% by 2013. The government hopes to ensure that poor farmers in the north and northeast receive a fair share of the economic benefits of biodiesel production.

Are other South American countries expanding the use of ethanol?

As of early 2006, Columbia mandates that all gasoline sold in cities with populations exceeding 500,000 contain 10% ethanol. In Venezuela, the state oil company is supporting the construction of 15 sugar cane distilleries over the next five years as the government phases in a national E10 (10% ethanol) blending mandate.

How has Brazil influenced ethanol production in the region?

In Bolivia, 15 distilleries are being constructed, and the government is considering authorizing blends of E25. Costa Rica and Guatemala are also in the trial stages for expanding production of sugar cane fuel ethanol. Many of these countries have learned from the experience of Brazil — the world leader in fuel ethanol.

How much ethanol does China intend to use for transportation fuel?

In China, the government is making E10 blends mandatory in five provinces that account for 16% of the nation’s passenger cars.

What about in Southeast Asia?

In Southeast Asia, Thailand, eager to reduce the cost of oil imports while supporting domestic sugar and cassava growers, has mandated an ambitious 10 % ethanol mix in gasoline starting in 2007.

And elsewhere in the region?

For similar reasons, the Philippines will soon mandate 2% biodiesel to support coconut growers and 5% ethanol — likely beginning in 2007. In Malaysia and Indonesia the palm oil industry plans to supply an increasing portion of national diesel fuel requirements.

Where does India fit into the mix?

In India, a rejuvenated sugar ethanol program calls for E5 blends throughout most of the country. The government plans soon — depending on ethanol availability — to raise this requirement to E10 and then E20.

What African nations have the capacity to meet the growing ethanol demand?

In Africa, efforts to expand biofuels production and use are being initiated or are under way in numerous countries, including Benin, Ethiopia, Ghana, Guinea Bissau, Kenya, Malawi, Mozambique, Nigeria, Senegal, South Africa and Zimbabwe.

Editor’s note: All facts were adapted from “Biofuels for Transportation: Global Potential and Implications for Sustainable Agriculture and Energy in the 21st Century,” a report compiled by the Worldwatch Institute and the German Agencies of Technical Cooperation (GTZ) and Renewable Resources (FNR). For the full report, click here.