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BIO Magazine - Policy on Transport Bio-fuels of the U.S.A and E.U and the Potential of South Europe to adopt the new U.S. model for Bio-ethanol production. Δεκέμβριος 2015
Δεκέμβριος 2015 No38

BIO Finance

Policy on Transport Bio-fuels of the U.S.A and E.U and the Potential of South Europe to adopt the new U.S. model for Bio-ethanol production.
Policy on Transport Bio-fuels of the U.S.A and E.U and the Potential of South Europe to adopt the new U.S. model for Bio-ethanol production.

In recent years there is a high growth rate of bio-fuels consumption for road transport worldwide (see fig. 1), and the IEA vision for further growth in the coming years up to 2030 is impressing (see fig.2). Today transport bio-fuels provide 2.7% of global road transport fuel, on an energy basis, but higher shares is being achieved in some countries and regions like: 21% in Brazil, 4% in USA, and around 3% in EU.

The expected development of advanced bio-fuels technologies will be essential to achieving the BLUE Map [22] scenario over the next few decades. These technologies included: cellulosic ethanol, biomass to-liquids diesel, biosynthetic gas and other innovative conversion routes. 

Bio-ethanol is by far the most frequently used transport bio-fuel in the world, with USA ahead with a production/consumption of 50.70/49.50 M.m3 in year 2011 [23]. The same year the bio-ethanol production in EU was only10% of the USA production with a growth in consumption of +26.1% between 2009 and 2010.

The biodiesel production/consumption in USA during 2011 was 2,000/2,640 M.t/year [23], and in the same year in EU the biodiesel production/consumption was 8,791/10,869 M.t/year [23]

 

 

 

2. The USA Policy on transport bio-fuels

According to the Bio Economic Research Associates [17], the USA priorities on the production and consumption of bio-fuels, are as follows:

        2.1. National security of fuels supply, as first priority

        2.2. Creation of new jobs, as second priority

        2.3. Support of National Economy, as third priority   

     

The targets of USA for  transport bio-fuels.

According bio-era Study (17)

  • In year 2030 total bio-fuels production will be 227 Mm3
  • Composed: of 57 Mm3 of 1st generation bio-fuels and by 170 Mm3 of advanced bio-fuels. So, in year 2030 they will substitute 22% of the consumed petrol of the country and the corresponding feedstock's will be 470 M.t. dry matter
  • These feedstocks will come from forest and agricultural residues and from energy cultivations, but in the current forest and agricultural land.
  • The average cost of the advanced bio-fuels in year 2030 is estimated, at the industry gate, to be $ 0.50/ lit. 
  • They set also a mid-term target for the year 2022 the consumption of total transport bio-fuels to be 136.8 Mm3/year, i.e. to substitute the 20% of the fossil fuels for transportation, of which 80M.m3 to be next generation bio-fuels.
  • They have adopted severe rules for bio-fuels to protect the quality of the air.
  • The Environmental Protection Agency propose (5/2009) new Renewable Fuel Standard, in which there is also the indirect impact from the change of land use. 
  • The U.S. Government gives financial incentives to the farmers to change the production of ethanol from maize with other better crops for environmental reasons and to face the problem with rising prices of food and feed.                                                                                                         

(in year  2050 it is estimated [25] that bio-fuels will cover globally the 3%-4% of the 6 b. Ha of current world agricultural land) .

(Today, all bio-fuels are totally produced in arable land designated for food or feed production) 

  • The U.S. government covers financially the 30% of the pilot and Commercial installations cost of future bio-fuels and offers taxes reliefs and introduces new taxes to imported bio-ethanol of $ 0.142/lit and it finances also the national production of bio-ethanol with $ 0.119/lit.
  • The U.S. government finances the R&D of the future bio-fuels (feedstock production, transformation to bio-fuels and the new cars technology)

 3.  The EU Policy on transport bio-fuels

The EU policy for bio-fuels is related with measures: 

  • to avoid GHG, 
  • to create new Jobs, to support EU-27 economy and 
  • to secure the fuel supply. 

To support this policy EU issues (among other recent relative decisions) two EU Directives: Directive 2009/28/EC, supporting the RES penetration in the EU-27 and the Directive 2009/30/EC, on bio-fuels quality.

 

The EU Directive 2009/28/EC for the Renewable Energies [18] 

This directive could be summarized in the following: 

  • 20% increase in energy efficiency
  • 20% reduction in greenhouse gas (GHG) emissions (CO2, CH4, and N2O)
  • 20% share of renewable in overall EU energy consumption by 2020
  • 10%  bio-fuel mixture in transport fuel by 2020.

The articles of the Directive 2009/28/CE concerned more particularly with bio-fuels are the articles 17 to 21 and EU Directive 2009/30/EC on the quality of bio-fuels. 

Regardless of whether the raw materials were cultivated inside or outside the territory of the Community, bio-fuels can be accounted for with respect to the target of 10% renewable energy in transport (and therefore with respect to the national targets in terms of renewable energy) and benefit from possible financial support from the Member States, only if they fulfill the following sustainability criteria:

 

EU  main sustainability criteria for bio-fuels

1Feedstock’s cultivated inside or outside the territory of the Community, to produce energy from bio-fuels shall be taken into account only if they fulfill the sustainability criteria. 

2The GHG emission saving from the use of bio-fuels shall be at least 35 %. With effect from 1 January 2017, the GHG emission saving shall be at least 50 %.From 1st January 2018 this GHG emissions saving shall be at least 60 % for bio-fuels produced in installations in which production has started on or after 1st January 2017. In the case of bio fuels produced by installations that were in operation on the 23rd January 2008, the obligations shall be applied from April 2013.

3.  Bio-fuels shall not be made from raw material obtained from land with high biodiversity value, namely, land that had one of the following statuses in or after January 2008, whether or not the land continues to have such a status:

a)  primary forest and other wooded land, that is forest and other wooded land of native species, where there is no clearly visible indication of human activity and the ecological processes are not significantly disturbed;  
b)  areas designated: 

(i)  by law or by the relevant competent authority for  nature protection purposes; or          

(ii) for the protection of rare, threatened or endangered ecosystems or species recognized by international  agreements or included in lists drawn up by intergovernmental organizations or the International Union for the Conservation of Nature.

c)  highly bio-diverse grassland that is:
(i) natural, namely, grassland that would remain grassland in the absence of human intervention.                                                                                                             (ii)  non-natural, namely, grassland that would cease to be grassland.

The Commission shall establish the criteria and geographic ranges to determine which grassland shall be covered by point (c).                                                                               

4. Bio-fuels shall not be made from raw material obtained from land with high carbon stock, namely, land that had one of the following statuses in January 2008 and no longer has that status: (a) wetlands, (b) continuously forested areas, (c) land spanning more than one hectare with trees higher than five meters and a canopy cover 10-30 % of the total land.

5.  Bio-fuels shall not be made from land that was peatland in January 2008.

6.  EU Directive 2009/28/EC should harmonize with Fuel Quality Directive 2009/30/EC.

Some articles of this directive are given bellow:

  • No bio-fuels from carbon rich or bio-diverse land. EC has to report on compliance with environmental and social sustainability criteria of major bio-fuel exporting countries.
  • Bonus of 29g CO2/MJ for bio-fuels from degraded/ contaminated land.
  • Bio-fuels from waste, residues, non food cellulosic material, and lignocelluloses material will count twice for RES transport target.
  • Member State Implementation into national legislation by December 2010.
  • Enabling more widespread use of ethanol in petrol (E10) with transitory regulations (protection grade E5) for older cars and derogations for petrol vapor pressure, subject to EC approval.
  • Increase of allowed biodiesel content in diesel to 7% (B7) by vol., with an option for more than 7% with consumer information.
  • Introducing a mechanism for reporting and reduction of the life cycle GHG emissions from fuel.

4. The dramatic dilemma of EU with regard to Bio-fuels

4.1. Sustainability problems

The current European regulation excludes bio-fuels that reduce CO2 emissions by less than 35% from their petroleum equivalent. So, factoring in ILUC (Indirect Land Use Change) estimates is expected to push several key biodiesel feedstocks beyond this threshold (as they are palm oil, soya oil, and rapeseed oil). These  feedstock’s are the cheapest to produce but are also the least energy-efficient (see Table 2).                                                                                      

The IEA expectations are (6) that, diesel share in oil product demand will grow from 42% in 2011 to 44% in 2016. So, biodiesel in EU is expected to meet 2/3 of bio-fuels consumption by 2020, and companies such as Neste, Cargil, Sofiproteol and Abengoa have invested about E 13 billion in EU biodiesel production capacity. So, if biodiesel from feedstock with a high carbon footprint is excluded from EU targets (the reason in first priority of EU encouraging bio-fuel use is purely environmental and not energy security like in US, said Mariene Holzner EC energy spokeswoman), much of this investment would be wasted, and increased bio-ethanol production and imports would be unlikely to fully make up the difference.

So, it is proving far easier to produce clean bio-ethanol to replace petrol than clean biodiesel [6]. Note: Corn ethanol also faces similar to smaller sustainable problem, depending on the heating source in use (oil, natural gas, or biomass residues).

4.2. Food security problem

The dramatic evolution of food demand in the world obliges EU and USA to reconsider the energy production program on agricultural land. So, probably EU will eliminate food-crop subsidies for bio fuels production by 2020 [2]. At present, bio fuels represent 4.5% of the E.U transportation fuel consumption( expected the year 2020 to reach 10% or about 15 million m³), with essentially all of this coming from food crops, where it seems there is no much room for growth [2]. In a recent meeting (London, October 2012) of the Europeans bio-energy leaders, they proposed a new direction for the European bio-energy use, “to limit edible feedstock-based bio-fuels to just 5 %” [24].

The RCA-methodology (Responsible Cultivation Area) recommends three options to supply the additional feedstock demand for bio-fuels:

  • expand energy crop production on “unused land” with low biodiversity and low carbon stocks;
  • expand production through yield increases on existing plantations; or
  • expand production through integration of energy crop and food-feed production.

Remarque’s on RCA-methodology

  • The expansion of energy crop production on “unused land” it seems to day a real target, if we consider:

a. The algae production where the total global market over the short term future is estimated [1] to have an annual growth of 43%, that will lead market volume from $271 M. in 2010 to $1.6 billion in 2015.

b. The progress in US and EU on advanced bio-fuels. To that direction we face the 2 following problems:

b1. the low productivity of the feedstock, if we consider that: 1ha of corn provides 4.7 m3 of fuel and 3.26 t of animal feed, 1 ha of non food crop provides 1.12 m3 of fuel and no edible products

b2. the high investment and the final high cost of the produced ethanol or BtL (wood-diesel ).

c. The new feedstock under investigation like the Seashore Mallow, Agave, and other, from which we should expect limited (to my opinion) solutions.

  • The expansion of the production through yield increase in existing plantations seems also feasible as they are margins to increase yields further on to a certain point (ex. Hybrid Pennisetum in China, Sweet sorghum Hybrids from Ceres in Brazil [7], Jatropha Hybrids, etc...).But is impossible to solve only this way the huge future demand for bio-fuels  in the world.
  • To expand production through integration of energy crop and food-feed production, that option is feasible also to a certain point. We have already encouraging results to that direction as they are: the ICRISAT efforts in India [21], to produce food and feed from Sweet sorghum’s seeds and sugar ethanol from the stems, the Nebraska University [20] research gave good results, as they manage to produce by rotation in the same year sugar and seeds ethanol from Sweet Sorghum and Vicia Velosa crop for animal feed and to cover N-fertilizer requirements of Sweet Sorghum plantation.
  • We suggest, proposing to the above RCA-recommendations, a fourth option that is to expand the use of the solid municipal wastes and part of the agricultural residues for feedstock for advanced bio-fuels. According to a study from” Bloomberg New Energy Finance” published in January 2012[8], only a small part of the existed agricultural residues in the world, could be enough to cover the world future demand for advanced Bio-ethanol.

                         Table 2.  Estimated Carbon Emissions for Different fuel types (Including ILUC)*                                                                                                                                                                                                 

Tar sands…………………………………………………… 107.0

Crude oil………………………………………………………      87.5

Palm oil………………………………………………………    105.0

Soya bean……………………………………………………   103.0

Rapeseed………………………………………………………   95.0

Sunflower………………………………………………………    86.0

Palm oil with methane capture………………………………    83.0

Wheat…………………………………………………………  35-64

Corn……………………………………………………………   43.0

Sugar…………………………………………………………  34-36

2nd generation cellulosic biodiesel…………………………   9-21

 

Source: EC, EurActive(6)     * ILUC=Indirect Land Use Change      

 

 

5. The potential of South Europe for sustainable and low cost bio-fuels 

Given that:

a. The cost of bio-ethanol production in EU (especially in Central and North Europe) is and will remain high in comparison with the international cost (E 450/m3 in EU, compared to E 300 /m3 in US and E 200/m3 in Brazil ), resulting the imports of bio-ethanol mainly from USA and Brazil.

b. The produced bio-ethanol in EU is coming from food-feeds row material, cultivated in agricultural land (cereals, corn, and sugar beets).

c. The cellulosic ethanol and the BtL (hoping to keep the sustainability criteria, as it is expected to be produced in non agricultural land) they require huge industrial investments, and their cost will be higher even compared with the cost of the first generation bio-fuels (at list for the first years of their production).

The researchers are looking for alternative solutions, in parallel to their efforts to cut down the cost of advanced bio-fuels.

The objectives of these researchers are on new species and hybrids of plantations and also on new feedstock treatment, with the goal to produce low cost and sustainable transport bio-fuels in order to make producers  competitive in the world market.

It seems that among the most promising feedstocks are, for the time being, some Sweet sorghum species and hybrids, the Agave species, the hybrid pennisetum, some species of Giant reed, and (list not exhausted) Eucalyptus species. 

These feedstocks (except Sweet sorghum) can give very good results only in some South European regions.  Some other feedstocks can be produced also in Central and North Europe but with much lower productivity in comparison to the same plantations in South Europe (ex. Willow species and hybrids, Sweet sorghum and other). 

As an example one can see the resent results  of a comparative research in Germany ( N.52o) and in Italy (N.42o), with 6 different species of Sweet sorghum (Keller, M81E, Dale, Delta,  Bovital  and Goliath), where the biomass production and the sugar content were double in South Europe  [11].

 

5.1.  What South Europe could  expect from Sweet sorghum.

  • Bio-ethanol production > 6t/ha.

  • Co-production of seeds for feed or ethanol.

  • Co-production of feed from the rotation in the same year with papilionaceai species (ex. Vicia Velosa) and from the sub-products from the fermentation (vinasse) and from bagasse silage). 

  • Soil enrichment in N2 fertilization able to cover the Sweet sorghum annual needs (50 units thanks to azoto-bacteria). 

  • Irrigation water needs at 50% of corn production needs.

  • Cost of bio-ethanol :200-250 E/m3

  • Electricity and Heat co-production from the residues (feed in Tariff for electricity in Greece 150 E/Mwh), or advanced ethanol from cellulose (5-6 t/ha). 

 

5.2.  Bio-ethanol  production from Agave Sp.

Agave species could be produced ONLY in some regions of South Europe and it could be produced also in marginal land with rain-fed irrigation water.

Some Agave species present huge productivity in ethanol (from sugar and cellulose) production/ ha in non arable land, and it can save 2, 5 times more CO2 compared with savings from corn plantations [12].

 

 

6.    A new model for sustainable and low cost bio-ethanol production developed in the South of USA.

6.1.   Classical model for advanced bio-ethanol production in large industries. 

  • Usual total cost for the industry installation:     2.64$/lit

  • High transportation cost for feedstock from the production place to the industry.

6.2. The new model for the row material production and the processing for ethanol in the farm.

In USA this new model for ethanol production is supported by: The National Sorghum Producers (NSP) and the Sweet Sorghum Ethanol Association (SSEA). The new model presents a growth in ethanol production in USA from Sweet sorghum  > 8 b.lit/yearly [13]   , which is increasing rapidly, according the National Sorghum Producers.        

The advantages of the new model for integrated production of ethanol in the farm

From the farmer’s experience

  • investment cost for ethanol processing:   0.264$/lit

  • Ethanol processing in favor of the farmer’s family income.

  • 2, 3 times more jobs creation, besides the jobs for feedstock production.
From McClune Industries’ experience(13, 14):   
  • The new Model for integrated ethanol production in the farm is known in USA under different names like the name SORGANOL from McClune Industries. For SORGANOL are used new Sweet sorghum hybrids giving productivity in ethanol more than 9m3/ha. They use also special harvesting machinery called “Sor-Cane Harvester” that it collects the Juice and filters it during harvesting of feedstock.

  • The production cost of ethanol is: $0.132/lit.

  • The cost for the Sweet sorghum plantation is around the 1/4-1/3, compared with the cost of corn plantation.

  • The duration of the plantation is 100-120 days for the 1st harvest and 60 days for the 2nd harvest (in southern regions).

  • The new model offers:

         

 Income gains from bio-ethanol production/ha:
  • Corn ethanol: (10,000 kg/ha x $0.189/kg=$1,900/ha – production cost $1,400/ha) =$494/ha

  • SORGANOL:  (7,496 lit/ha x $ 0.63 / lit = $ 4,750 / ha - $ 790, 7 / ha production cost)  = $ 3,959/ha

Gains in sustainability from less CO2 emissions/ha:

  • Corn ethanol, CO2 emissions :  58 m3/ha

  • SORGANOL, CO2 emissions: 6.92 m3/ha 

So, SORGANOL has 8.4 times less CO2 emissions/ha

 

7.  Advantages for South Europe and EU from   the use of the new model for     ethanol production from Sweet sorghum and Agave sp.


 

 

 

 

 

 

 

 Used Bibliography

1. SBI Bulletin. 006/2012. “Algal Biofuels Technologies- Global Market and Product Trends”. www.sbireports.com

2. Jim Lane.09/2012. “Is the EU Abandoning Biofuels ?” Renewable Energy World. Com.10/2012

3. World of Bioenergy.com. 10/2012. “Thedemand for biofuels is expected to grow approximately 7% a year in the EU and to reach 10% the year 2020 in EU”

4. World of Bioenergy.com. 10/2012. “More bioenergy than oil inSweeden”.

5. Imke Luebbeke . 01/2011. “Closing the Sustainability Gap to ensure a sustainable future for biofuels”. WorldofRenewables.com/renewablesnews/bioenergy/closingthe sustainability 01/2011.

6. Jeremy Bowden. 08/2012. “Bioethanol vs Biodiesel. Europe hesitates over indirect impact of green fuel”. Renewable Energy World, 08/2012. www.renewableEnergyworld.com.

7. Ceres, Inc. 08/2010. “ Ceres opensBrazil Subsidiary to support Sweet sorghum Busines”. www.ceressementes.com.br.

8. Bloomberg. 2012. “ Moving Towards a next-generation ethanol economy”. Bloomberg New Energy Finance 2012. 

9. Zervos A., Lins C., Muth J., 04/2010. “RE-thinking  2050. A 100% Renewable Energy Vision for the European Union”. EREC 2010.

10. Taylor p., 2008. “Scenarios and Strategies to 2050’. Energy Technology Perspectives 2008. IEA/OECD.

11. Ruggeri R.,Rossini F., Provenzano M.E., Del Puglia I.L.M. 2012. “Sweet sorghum Potentials as biofuel feedstock in two European growing areas”. 20th. European Biomass Conference, Milano 2012.

12. http//www.greenoptimistic.com/2011/08/09/agave.

13. www.sorganol.com/ , www. Sorghumgrowers.com.

14. McClune Industries presents Sor-cane Harvester and SORGANOL Biofuel Innovations. LLC; 7 Potterville Main st. Reynolds, GA 31076D/B/A/ McCLUNE Industries.

15. IEA, 2009. “Biofuels outlook”. World Energy Outlook. IEA 2009, p.88

16. Bioethanol Report, 05/2011. “The fuel of the future”. www.Crop-energies.com.

17. Bio Economic Research Associates,2009. “US Economic Impact of Advanced Biofuels Production: Perspectives to 2030”.

18. EU Directive 2009/28/EC.

19. AEBIOM, 2011. “Annual Statistical Report”. 2011.

20. University of Nebraska, 2008. “Sweet Sorghum Research “

       http://www.agronomy.unl.edu/newsfacultystaff/research/sweetsorghum.html.

21. Belan VS bReddy, Ramesh S., et all, 2009. “Sweet Sorghum, food, Feed, Folder and Fuel crop”.ICRISAT 2009. www.icrisat.org(Biopower)Index.html.

22. IEA, “Biofuels road map”.

23. F.O.Licht’s, 2011. “World Ethanol and Biofuels Report”. 

24. Michael Chaplin, 10/2012. “EU announces new plans to support domestic second generation and advanced biofuels production”. RENEWABLE ENERGY WORLD.COM 17/10/2012.

25. EA, 2008. “Energy Technology Status and Outlook 2008”

26. Bellmer D., Huhnke R. 2010 “Sweet Sorghum Ethanol” In – Field Fermentation Issues” Oklahoma State University 2010. www.bioenergycenter.okstate.edu


By Spyros Kyritsis

President of the Greek Agricultural Academy

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