While we have already discussed government frameworks focused on decarbonization efforts, it’s essential to dive right into one of the major contributors to emissions: transportation. Several policies aimed at reducing transportation emissions are in place such as the promotion of electric vehicles. However, another long-standing solution is the use of biofuels.

Policymakers from around the world have been persistent on driving its citizens to switch to electric vehicles to lessen their carbon footprint. However, it has not been turning out for the best as higher prices of EV and the lack of charging infrastructure pose as barriers to the transition. As a result, sales momentum of electric vehicles have been slowing down globally which may be an indication that consumers may not yet be ready to convert to EVs (Goldman Sachs, 2024). It may take time before the shift to EV as consumers wait for prices to decrease when new models come on sale and with more charging stations installed. In the meantime, how can we reduce emissions from internal combustion engine (ICE) vehicles? Biofuel presents a more sustainable alternative to fossil fuel. It’s already in use but can still be further optimized to achieve greater decarbonization of transportation.

What is Biofuel made of?

Biofuel is fuel that is generated from agricultural crops or organic waste. It is actually composed of several sources that are classified into three generations. The first-generation biofuel is made of animal feed or food crops such as corn, wheat, sugar beet, sugar cane, and seed oils. Second-generation biofuel is derived from non-food crops which includes agricultural residues, forest residues, and other waste materials. Third-generation biofuel is produced from microalgae through conventional transesterification, a typical chemical biorefinery process that converts algae lipids into biodiesel.

The types of biofuels available include ethanol, biodiesel, and biogas which can be produced from any of the sources mentioned and are categorized based on the source which they are produced. Biodiesel, for example, would be described as second-generation biodiesel if it is derived from waste cooking oils and animal fats. Ethanol, biodiesel, and biogas are widely used as alternatives to fossil fuels for powering vehicles. What are the differences between the three?

• Ethanol

  Ethanol is mostly produced around the world by fermenting sugar in starches of grains such as corn, sorghum, barley and the sugar in sugar cane and sugar beets. Ethanol is Canada's leading renewable fuel, composed of oxygen, hydrogen, and carbon, and produced through the fermentation of sugar or the conversion of starch from grains. It is usually mixed with gasoline of up to 10% ethanol (E10). While most vehicles manufactured after 2001 can accommodate E10 fuel, there are vehicles with flex-fuel engines that are designed to accommodate up to 85% ethanol (E85).

• Biodiesel

  Biodiesel is an alternative fuel for diesel engines that are make from plant oils, waste cooking oil, and animal fats among others. Pure biodiesel (B100) is usually blended with diesel at different concentrations (Bn). B5 (up to 5% biodiesel) and B20 (ranging from 6 to 20% biodiesel) are two most common blends used as vehicle fuel.

• Biogas

  Biogas is produced through breaking down organic matter such as food scraps and animal waste. It consists of methane and carbon dioxide but can also include small amounts of hydrogen sulfide, siloxanes and some moisture. It undergoes a process called anaerobic digestion where microorganisms are broken down in the absence of oxygen. To use it as vehicle fuel, an additional process is required, involving purification and upgrading to remove CO2 and convert it into biomethane.

The biofuel production pathway generally encompasses feedstock cultivation and collection, feedstock upgrading, and then a conversion process. These stages are all connected through transportation by truck, rail, and shipping.

National governments and other governing bodies have been studying the feasibility of biofuel as a sustainable alternative to fossil fuel especially for transportation modes that cannot rely on electrification. Since transportation is a large source of carbon emissions, nations like the US and EU have imposed their own policies – the Low Carbon Fuel Standards and the Renewable Energy Directive (RED) respectively to help reinforce decarbonization of transportation.  By 2028, The International Energy Agency forecast biofuel will account for near 60% of avoided oil demand and the remaining towards renewable electricity. Let’s explore how biogas is sustainable in terms of environmental impact, scalability, and efficiency.

How Sustainable is Biofuel?

Environmental Impact

It is evident that the use of biofuel in replacement of fossil fuel has been proven to reduce GHG emissions significantly. One advantage of biofuels over pure fossil fuels is that they produce little to no emissions at the tailpipe. 100% biodiesel (B100) emissions are 74% lower than petroleum diesel (Alternative Fuels Data Center, n.d.). Biomethane as fuel for transportation also sees lowered GHG emissions by the range of 60% to 80% compared to gasoline. There is also a research that shows a lifecycle carbon intensity of ethanol is approximately 46% lower than that of gasoline’s carbon intensity (Renewable Fuels Association, 2022).  Another benefit is that biofuels are made from renewable resources and particularly, biodiesel is biodegradable (pure biodiesel degrades faster than petroleum diesel).

There are still possible risks of increased GHG emissions from producing and applying synthetic nitrogen fertilizers, other agricultural practices, direct and indirect land-use change (LUC) for production of feedstock, including degradation of land, forests, water resources, and ecosystems. Another issue would be the unintentional impacts on biodiversity and food prices because of crop demand. Biofuel could be considered genuinely clean fuel if it were made from organic waste and resilient crops grown on wasteland and produced using renewable energy. R&D in Europe has taken action on this by focusing on development second-generation technologies that utilize waste oils, fats, agricultural residues, forest biomass, or energy crops, which should be cultivated on marginal land with lower fertilizer and input requirements (ETIP, n.d.).

Scalability

Biofuel demand is expected to grow 39% increase this 2023-2028 compered to the last five period at 38 billion liters. By 2028, it is expected that biofuel demand will be around 200 billion liters. Most of its demand is coming from large emerging nations such as Brazil, Indonesia, and India. Rightly so because of their rich feedstock potential, rising transport demand and robust biofuel policies. In emerging economies, biofuel may become one of their main decarbonization options given the hurdles with EV adoption especially in those with unstable electricity supply.

Production of biofuel around the world has been gradually increasing from 180 thousand barrels of oil equivalent per day in 2000 to 1.9 million barrels of oil equivalent per day in 2022 (Statista, 2024). However, biofuel production still falls of short of Net Zero Scenario goals. The challenge lies on producing biofuel since it will need massive amounts of lands to produce conventional crops like corn or soybeans. Crops is the main source of biofuel production but with the issues facing its production, the opportunity lies in agricultural and forest residues as well as solid waste materials for biofuel production. Now policymakers and government bodies must explore innovative technologies that can expand and make use of these residues and waste. In that way, circular economy is practiced, and we avoid more emissions.

Efficiency

Engine efficiency for biofuel-powered vehicles is measured through factors such as fuel composition, engine design, and operating conditions. A slight decrease in fuel efficiency is experienced for ethanol-gasoline blends because of ethanol’s lower energy density if compared with pure gasoline. On the other hand, ethanol's higher-octane rating allows for increased compression and more efficient combustion in certain engines, offsetting some energy losses.

Biodiesel vehicles have similar horsepower as conventional diesel vehicles. Biodiesel can improve engine performance and lubrication, but reduces fuel economy slightly at about 2-8%. Buses, trucks, and military vehicles in the US run on fuel blends with up to 20% biodiesel as pure biodiesel is vulnerable to degradation in cold weather conditions and cause complications in older vehicle engines.

While the direct disadvantages of using biofuel compared to regular gasoline may be negligible, the trade-offs lie in its broader impacts on air quality, human health, and biodiversity preservation.

There are certainly several gains to using biofuel for vehicles, but the challenge lies in developing smart solutions that will increase its supply, maintain its positive impact, and establish it as a reliable source of fuel, all while utilizing resource residues and reducing carbon emissions.

How do we unlock the full potential of Biofuel?

It may be a tough call to achieve the Net Zero Scenario goals without massive improvements on Biofuel production and usage. These are some points for policymakers to consider helping unlock the full potential of biofuel.

Environmental Impact:

• Land-use degradation is a significant concern in biofuel production. To address this, policymakers could consider allocating a portion of agricultural land from food suppliers to biofuel production. This should be done with strict feedstock limits, ensuring that biofuel production stays within the allowable land use, maintaining both food supply stability and affordability.

• Policymakers can also support the development of smart farming practices among innovators that can reduce GHG emissions such as methane through carbon removal solutions.

Scalability:

• Scaling biofuel production from first-generation sources is important, but to meet future demand, second- and third-generation sources must be explored and developed further. Government bodies should adopt strategies similar to those of the EU, encouraging research, development, and investment in maximizing the use of waste and residues for biofuel production.

Efficiency:

• Fuel efficiency and economy are setbacks as to why these are not standardized in the usage of gasoline for vehicles. Second- and third-generation feedstocks, such as waste materials and algae, are considered more energy-dense and efficient. Exploring these resources for biofuel production could significantly enhance fuel efficiency.

• Improving fuel economy may require several trials in refining and converting biofuel, as well as modifications to engine design, to maximize the benefits of this sustainable fuel. Tax breaks or subsidies to help manufacturers enhance their operations could lead to the most optimal outcomes in fuel economy and engine performance.

Biofuels have the potential to replace fossil fuels as a key component of the global strategy to decarbonize transportation. While biofuels offer promising sustainability benefits in terms of environmental impact, scalability, and efficiency, there are still challenges to overcome. The solutions mentioned above provide a starting point for policymakers, but successful implementation will require substantial support from multiple stakeholders. With cooperation from policymakers, manufacturers, suppliers, and consumers, we can work towards achieving a net-zero future and creating a cleaner, more sustainable transportation system. GreenEco Investments partners with enterprises that provide innovative solutions for decarbonizing transportation. Connect with us to explore how we can support your initiative.