Biofuels
What are biofuels?
Biofuels are fuels that can be derived from biomass including plants, crops, animal waste and algae. The three main types of biofuels used today are bioethanol, biodiesel and renewable diesel. Bioethanol is produced from fermentation of carbohydrates. Feedstocks include maize/corn, sugarcane, sugar beet or lignocellulosic (non-edible/woody) feedstocks. Bioethanol is used predominantly as a blendstock with gasoline.
Biodiesel is produced from vegetable oils, used cooking oil (UCO) or animal fats, and is blended directly into the diesel pool. Renewable Diesel is a fuel made from similar vegetable oils, fats, and/or wastes, but is chemically consistent with fossil-based diesel. Biodiesel and renewable diesel have several similarities but with a few key differences.
- While both fuels are made from vegetable oils / fats /wastes and can be blended into conventional diesel, they have a different chemical composition; biodiesel is an ester, while renewable diesel is a fully fungible diesel fuel. This is the result of the production processes, where biodiesel is produced through a transesterification process, while renewable diesel is created via hydrotreating – similar to fossil diesel.
- Renewable diesel is a drop-in fuel, while biodiesel is limited to a specific maximum blend (usually 5 or 20 percent) and higher blends must be specially labeled as their use is limited to compatible vehicles.
- Renewable diesel has fewer impurities and emissions compared to biodiesel.
Biofuel demand is largely predicated on a lower overall carbon footprint than crude oil-derived fuels, based on consumption of atmospheric carbon during the growth of biomass. However, concerns remain with certain feedstocks on land use change emissions and “food versus fuel” competition.
How can etasca help?
The etasca team has extensive commercial and technical experience across the biofuel value chain – covering feedstock availability, technology and product demand.
Interested? contactus@etasca.com
%
of global bioethanol
from corn and wheat,
remainder from sugar sources
%
CAGR
expected bioethanol
growth to 2028
Commercial considerations:
Biofuels consumption driven by its use as a drop-in replacement for traditional liquid fossil fuels in transport applications.
- Majority used in the transportation sector, providing low-carbon solutions for vehicles, ships, and increasingly aircraft (SAF).
- In 2022, biofuels represented over 3.5% of global transport energy demand, although this is fairly region-specific.
Bioethanol, biodiesel, and renewable diesel are the major biofuels, with primary blending mandates into road fuels supporting demand in specific regions.
- Countries like the U.S., India, Brazil, Europe, Indonesia, and Malaysia have set norms to promote the use of renewable energy resources. For instance, Brazil has an existing ethanol blending rate of 27%, with India introducing a 20% ethanol blending mandate by 2025. In the U.S., there is a strong political lobby based on corn growers for bioethanol content in gasoline as well as federal incentives such as the LCFS and RINs to promote biofuel use.
- Directives such as the EU RED II are increasingly defining that advanced biofuels, from non-food crops, be included in the content requirements for transport fuels.
Costs of biofuels are still higher than conventional fuels.
- These vary depending on the type of biofuel and method of production, but are generally up to twice as expensive as gasoline and diesel on the wholesale market (depending on crop used) due to higher feedstock and processing costs.
- Despite the premium for biofuels decreasing, mandates and subsidies will continue to be a key driver for demand.
Technical considerations:
Biofuels encompass different types of fuel sources that are synthesized using various technologies. The major processes for production of first-generation biofuels are:
- Fermentation: for production of bioethanol, from various bio crops such as corn, wheat, or sugar crops (beet or cane).
- Transesterification: for production of biodiesel (fatty acid methyl ester, FAME) from vegetable oils and animal fats.
- Hydrotreating & Isomerization: for production of renewable diesel (or hydrogenated vegetable oil, HVO) from fats, oils, and/or greases.
- The selection of the feedstock source depends large on factors such as local climate, existing infrastructure, and sustainability goals.
Land-use considerations are also important for future market growth.
- Biofuel crops can compete directly with those which can be used for human or animal feed, and there have been concerns that this could lead to food scarcity in certain regions – this would need to be carefully balanced.
- In regions such as Southeast Asia, clearing of rain forests for production of palm oil (for biodiesel production) can increase emissions due to land use change – the EU is gradually phasing out palm oil use in favour of e.g., soybean or rapeseed oil.
Environmental concerns on first generation biofuels has led to increasing regulatory focus on second- and third- generation biofuels:
- Second-generation (advanced) biofuels are those that can be manufactured from non-food biomass, such as lignocellulosic biomass (woody crops), agricultural residues, or non-food energy crops grown on marginal land. Classification as second-generation feedstock is important, as there are limitations on first-gen. biofuels under EU RED.
- Third-generation biofuels are those produced from algae or microorganisms, which do not require arable land allocation and thus avoid the land-use issues associated with first generation. Technology for these are still being developed and are not yet commercially deployed.