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).

—Selected Trends and Facts—

• In 2005, Brazil produced 16.5 billion liters of fuel ethanol (45.2 percent of the world's total) with the United States a close second at 16.2 billion liters, or 44.5 percent of the total. Ethanol provides roughly 40 percent of Brazil's non-diesel fuel and 2–3 percent of U.S. non-diesel fuel.

• Sugar cane is the most important crop for producing biofuels today and the feedstock for more than 40 percent of all fuel ethanol. Corn ranks a close second: the primary source for biofuel production in the U.S., it supplies nearly the same share of world fuel ethanol as sugar cane.

• Biodiesel, produced mainly from rapeseed or sunflower seed, comprises 80 percent of Europe's total biofuel production. The EU accounted for nearly 89 percent of all biodiesel production worldwide in 2005. Germany produced 1.9 billion liters, or more than half the world total.

• Global ethanol production more than doubled between 2000 and 2005, while production of biodiesel, starting from a much smaller base, expanded nearly fourfold. In contrast, oil production increased by only 7 percent over this period.

• In 2005, ethanol comprised about 1.2 percent of the world's gasoline supply by volume and about 0.8 percent by transport distance traveled (due to its lower energy content).

• From 2002–04, world oil demand increased by 5.3 percent. China's consumption alone increased by 26.4 percent, while consumption in the United States rose by 4.9 percent; Canada 10.2 percent; and the United Kingdom 6.3 percent. Demand in Germany and Japan, meanwhile, dropped by 1 percent and 2.6 percent respectively.

• 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.

• Roughly 80 percent of the world's conventional oil reserves are under state control and off limits to private investment.

• 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.

• 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.

• The GHG balance of biofuels varies dramatically depending on such factors as feedstock choice, associated land use changes, feedstock production system, and the type of processing energy used. In general, most currently produced biofuels have a solidly positive GHG balance. The greatest GHG benefits will be achieved with cellulosic inputs, such as dedicated energy crops and waste residues.

• Energy crops have the potential to reduce GHG emissions by more than 100 percent (relative to petroleum fuels) because such crops can also sequester carbon in the soil as they grow. Estimated GHG reductions for biofuel feedstock include: fibers (switchgrass, poplar) 70–110 percent; wastes (waste oil, harvest residues, sewage) 65–100 percent; sugars (sugar cane, sugar beet) 40–90 percent; vegetable oils (rapeseed, sunflower seed, soybeans) 45–75 percent; and starches (corn, wheat) 15–40 percent.

• Despite controversy about the energy balance of biofuels, there is an emerging consensus that all common biofuels contain more useful energy than is required to produce them. Corn ethanol has been particularly controversial, but its average energy balance now clearly exceeds one, thanks to improved energy efficiency in both agriculture and ethanol refining. 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 that uses coal energy.

• Even with subsidies, the economic savings with biofuels from avoided oil imports can be considerable: between 1975 and 1987, ethanol saved Brazil $10.4 billion in foreign exchange while costing the government $9 billion in subsidies. 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).

Recent Developments in the Biofuel Industry (as cited in report):

• In the United States, high oil prices and agricultural lobbying prompted passage in 2005 of Renewable Fuels Standard (RFS) that will require the use of 28.4 billion liters (7.5 billion gallons) of biofuels for transportation by 2012. Under new guidelines implementing the Energy Policy Act of 1992, many government fleet vehicles that run on diesel fuel are now required to use B20 (20 percent biodiesel) blends. Many in the industry believe that these targets represent a floor, rather than a limit, to biofuel production.

• 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 percent biodiesel by 2008, increasing to 5 percent by 2013, and the government hopes to ensure that poor farmers in the north and northeast receive a fair share of the economic benefits of biodiesel production.

• As of early 2006, Columbia mandates the use of 10 percent ethanol in all gasoline sold in cities with populations exceeding 500,000. 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 percent ethanol) blending mandate. 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. Argentina, Mexico, Paraguay, and Peru are all considering biofuel programs as well. Many of these countries have learned from the experience of Brazil, the world leader in fuel ethanol.

• A European Union directive, prompted by the desire for greater energy security as well as the requirements of the Kyoto Protocol, has set the goal of obtaining 5.75 percent of transportation fuel needs from biofuels by 2010 in all member states. In February 2006, the EU adopted an ambitious Strategy for Biofuels with a range of potential market-based, legislative, and research measures to increase the production and use of biofuels. Germany and France, in particular, have announced plans to rapidly expand both ethanol and biodiesel production, with the aim of reaching the EU targets before the deadline.

• In Japan, the government has permitted low-level ethanol blends in preparation for a possible blending mandate, with the long-term intention of replacing 20 percent of the nation’s oil demand with biofuels or gas-to-liquid (GTL) fuels by 2030.

• In Canada, the government aims for 45 percent of the country’s gasoline consumption to contain 10 percent ethanol by 2010. Ontario will be the center of the ethanol program, where the government expects all fuel to be a 5 percent blend of ethanol by 2007.

• In Southeast Asia, Thailand, eager to reduce the cost of oil imports while supporting domestic sugar and cassava growers, has mandated an ambitious 10 percent ethanol mix in gasoline starting in 2007. For similar reasons, the Philippines will soon mandate 2 percent biodiesel to support coconut growers, and 5 percent ethanol, likely beginning in 2007. The palm oil industry plans to supply an increasing portion of national diesel fuel requirements in Malaysia and Indonesia.

• Chinese and Indian planners have also sought to expand the national supply of ethanol and biodiesel. 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. In China, the government is making E10 blends mandatory in five provinces that account for 16 percent of the nation's passenger cars.

• 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.