Can biofuels play a more significant role in the world's portfolio of energy resources?

These days there is a lot of talk about biofuels - fuels made from plants such as corn, sugarcane and switchgrass - as one way to reduce the world’s dependence on oil and fossil fuels. After all, they are renewable - and to many that alone is reason enough to increase their role in our energy future. But as with all energy sources, decisions about how to increase their use have a significant impact on the benefits, costs and consequences to people and to the environment. Some considerations:

Net energy

Biofuel can be created from several different crops, each resulting in a different net energy ratio (the amount of energy input required to create a unit of useable energy). For liquid fuels, the most common crops are corn (in the US) and sugarcane (in Brazil) for ethanol, and soy for biodiesel. Switchgrass has the potential for a higher net energy ratio than corn or sugarcane, but is not currently widely available. And cellulosic biofuel (made from materials such as wood chips and other fibrous plant material) has a higher potential than crop-based fuel, but currently faces technology challenges in its processing.

Land use

If biofuels are to have a more significant role in our energy future, a significant amount of land may be required to grow raw material. According to the US Department of Agriculture, there is an abundance of fallow and pasture land available in the US for growing feedstock. But that isn’t the case worldwide. Decisions about land use may have a substantial impact on the local and global environment. For example, converting forestland to cropland will impact biodiversity and could result in many other detrimental impacts associated with deforestation. And some even say that growing crops for fuel is a misplaced priority in a world where so many people are hungry.

Other environmental impacts

Biofuels have the potential to reduce greenhouse gas emissions, and local air and water pollution. The CO2 emitted during combustion of ethanol is recaptured as a nutrient to the crops that are used in its production, and ethanol biodegrades quickly in water. However, the use of fertilizers on the crops and wastes from the refining process may result in water pollution.

Economic impacts

Government actions to promote biofuels inevitably favor certain interest groups over others. A shift to biofuels will stimulate rural economic development as growers experience an increased demand (and likely a higher price) for their crops. Should large-scale agricultural interests be the beneficiaries of such policies, or should incentives favor small landowners? Should they support growers of corn, soy, sugarcane or switchgrass? Or should policy-makers strive to establish no preference for one fuel over another, and let the markets decide?

Energy independence

For those countries that can grow their own biofuel crops, biofuels can diversify domestic energy resources. Brazil’s government established a robust biofuels program in the 1970’s in a desire to achieve energy independence - currently all gasoline consumed in Brazil is blended with over 20 percent of ethanol¹. But not every country has the capacity to develop a substantial biofuel industry because they are limited by land availability, climate and soil fertility.

Opportunity cost

Biofuel skeptics worry that a focus on biofuels takes attention - and funding - away from a much more effective approach to the energy challenge: reducing consumption. If policy-makers and the public are convinced that biofuels are the solution, they will see less need to invest in technology and to change behaviors to reduce energy use. And that, some feel, is the only viable long-term solution.

1. © 2006, Cambridge Energy Research Associates, Inc., From Brazil to the Rest of the World: Ethanol Industry Transformation