Impressive biofuel support policies have in recent times been adopted in both the USA (with projected production of 60 billion liters of second-generation biofuel by 2022) and the European Union (with 10 % renewable energy in the transport sector by 2020). Due to the magnitude of the two markets and their sizeable biofuel imports, the US and EU mandates could become an important driver for the global development of advanced biofuels, since current scenarios from the International Energy Agency (IEA) evidence a shortfall in domestic production in both the US and EU that would need to be met with imports (US DOE 2010; EU 2010).

Although algae biofuels are not yet fully competitive in the biofuel market, many venture capital firms had made recent investments in algae fuel ventures (Oligae 2010). Accordingly, a set of policies to assist the development of microal­gae technology is being created and constantly improved. These policy incentives aim at increasing renewable energy deployment, in latu sensu, and subsequently will promote development in the algae industry.

In this context, the US Department of Energy published on May 2010 impor­tant information for the US policy trends in the “National Algal Biofuels Technology Roadmap” (US DOE 2010). This document represents the output of the National Algal Biofuels Workshop held in Maryland in 2008 and was intended to provide a comprehensive road map report that summarizes the state of algae biofuels technology and documents the techno-economic challenges that have to be met and taken into account before algal biofuel can be produced commercially.

Afterward, the US Environmental Protection Agency (U. S. EPA) suggested revisions to the National Renewable Fuel Standard program (RFS). The proposed changes intended to address changes to the RFS program as required by the Energy Independence and Security Act of 2007 (EISA). The revised statutory requirements establish new specific volume standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that must be used in transporta­tion fuel each year. The regulatory requirements for RFS will apply to domestic and foreign producers, and importers of renewable fuel (US EPA 2013).

While cellulosic ethanol is expected to play a large role in meeting the 2007 American Energy Independence and Security Act (EISA) goals, a number of next-gen­eration biofuels show significant promise in helping to achieve the 21 billion gallon goal. Of these candidates, biofuels derived from algae, particularly microalgae, have the potential to help the US meet the new renewable fuels standard (RFS) while at the same time moving the nation ever closer to energy independence (US DOE 2010).

To accelerate the deployment of biofuels produced from algae, the American President Obama and the US Secretary of Energy Steven Chu announced on May 5, 2009, the investment of US $800 Millions on new research on biofuels in the American Recovery and Renewal Act (ARRA). This announcement included funds for the Department of Energy Biomass Program to invest in the research, development, and deployment of commercial algal biofuel processes (US EPA 2013). The funding will focus on algal biofuels research and development to make it competitive with traditional fossil fuels as well as the creation of a smooth tran­sition to advanced biofuels that use current infrastructure.

Meanwhile, in order to promote the use of energy from renewable sources, the European Parliament published on April 2009, the Directive 2009/28/EC, which estab­lishes a common framework for the promotion of energy from renewable sources, as well as it establishes sustainability criteria for biofuels and bioliquids (EU 2009).

By the end of 2010, a communication from the European Parliament has set the strategy for a competitive, sustainable, and secure energy future by 2020. The stra­tegic energy technology (SET) plan sets out a medium-term strategy valid across all sectors. Yet, development and demonstration projects for the main technologies (e. g., second generation biofuels) must be speeded up (EU 2010). The European SET plan lists several energy technologies, which will be required to bring together economic growth and a vision of a decarbonized society. It states that advanced biofuels, namely microalgae, are supposed to play a significant role. EU energy policy aims to represent a green “new deal,” which will hopefully enhance the com­petitiveness of EU industry in an increasingly carbon-constrained world. However, in our dataset, it was possible to include only three European studies. In the forth­coming years, it is expected a rise in the volume of European available data, due to both the strong European transport energy policy drivers and scenarios made avail­able by the IEA regarding Energy Technologies Perspectives 2010. In this sense, incentives and targets are to be met as well as the witnessing of a higher prolifera­tion of pilot-stage algae installations in this highly oil-dependent continent.

Brazil has diverse sources of energy. Among the countries that produce fuel-based renewable energy, Brazil stands out in its ethanol production from sugarcane. This feedstock has shown the highest levels of technical and economic efficiency com­pared to other cultures used for ethanol production.

The Brazilian ethanol program began in 1975 with the National Ethanol Program, which was called “ProAlcool.” This program was created to encourage ethanol production to replace gasoline as the standard road transportation fuel. The program aimed to reduce oil imports, which compromised the trade balance, and reduce the country’s energy dependence (Moreira and Goldemberg 1999; Hira and Oliveira 2009).

In addition to these main goals, this program was intended to promote other advantageous consequences, such as: (1) a reduction in the economic disparities between Brazil’s highly industrialized southeast and less-industrialized northeast regions; (2) an increase in the national income from exploring the maximum potential of resources (particularly land and labor); and (3) stimulation of the national sector for capital goods, which would increase the demand for agricul­tural machinery and distillation equipment (Hira and Oliveira 2009).

The Brazilian Ethanol Program was a great success until 1990. This success was a result of several national and international factors that supported the devel­opment and implementation of ethanol fuel. In the domestic market, the Brazilian government subsidized agricultural production, financed up to 80 % of the con­struction of new refineries, reduced taxes on ethanol-fueled vehicles such as the excise tax (IPI), and subsidized ethanol at gas stations (setting the price of alcohol as 64.5 % of the gasoline price). In foreign markets, the rise in oil prices and the decline in sugar exports contributed to the increase in ethanol production.

After setting the structure from 1989 to 1990, ProAlcool suffered a major cri­sis. The rise of the international price of sugarcane increased Brazil’s exports of it and thereby compromised the supply of this feedstock for ethanol production, which exhibited a significant decrease. Thus, the Brazilian government was forced to import ethanol to meet the domestic demand created in the previous period (Puerto Rico et al. 2010).

Due to market fluctuations, the 1990s were marked by the deregulation of the sugarcane industry. The main decisions in this period included gradual cuts of subventions that were related to the price guarantees on exports, the elimination of production and trade controls by the government, and the official shutdown of ProAlcool (Hira and Oliveira 2009; Puerto Rico et al. 2010).

During this period, farmers and industries started being reorganized and new government agencies were created for the purpose of chain organization. After the crisis of 1990 and the reorganization of the sugarcane sector, a new boost for the sugar and ethanol industry came with the introduction of “flex-fuel” vehicles in March 2003, which led to the inclusion of new choices of fuel in gas stations. The government offered new incentives to the emerging market with tax benefits by offering the same advantages granted to ethanol vehicles (Kojima and Todd 2005). According to Goldemberg (2007), the rapid rise and success of this market hap­pened because of the maturity of the ethanol industry, the reduction of produc­tion costs (the learning curve), increasing economies of scale, and mastery of the manufacturing techniques for flexible-fuel vehicles.

Ethanol production is a promising market due to the growing global demand. There are different raw materials that may be used in this industry. Therefore, it is necessary to develop the ethanol industry to meet the domestic and foreign demand and promote the country’s development.

In addition to ethanol, another recent source of agro-energy in Brazil appeared: biodiesel. Law No. 11.097-05 established the mandatory introduction of biodiesel in the Brazilian energy matrix in the form of a mixture of 2 % biodiesel (B2) by volume with fossil-fueled diesel (Federal Law 2005). Based on this law, resolution No.6/2009/CNPE stated that B5 would become mandatory in 2013. However, the development of the biodiesel industry enabled enforcement of this resolution in January 1, 2010 (ANP 2010).

Currently, biodiesel is manufactured primarily from soybean oil, which is one of the most valued commodities in the international market. There are public policies for the encouragement of diversification of the feedstock to be used in biodiesel. A variety of options such as soybeans, canolas, peanuts, sunflowers, and cotton is present in the southeast, midwest, and south regions of Brazil. In addition, the north region is able to produce biodiesel from babassu palms and castor beans.

However, with the exception of soybeans, there are no structured and efficient sup­ply chains for these alternative crops, which limit the organized, stable, and cheap sup­plies that can be delivered to the biofuel industry. Regarding the public policies that foster the acquisition of diverse raw materials from companies producing biodiesel, the Ministry of Agrarian Development (MDA) created the so-called Social Fuel label. This label ensures that companies that buy raw materials primarily from family farm­ers obtain special conditions such as lower interest financing by the Brazilian National Bank for Economic and Social Development (BNDES) and other accredited financial institutions; in addition, these firms receive the benefit of tax rates as Pasep/COFINS with reductions of the differentiated coefficients (Garcez and Vianna 2009). It is intended by the government that this percentage shall increase to 10 % by 2014, as biodiesel production already has an installed industrial processing capacity.

Advances in the bioenergy production sector in Brazil have been achieved by developing the industry, and these advances are related to the learning curve that has occurred in this market. Among the improvements, we highlight the development and multiplication of new varieties of sugarcane with high levels of production, progress in the agricultural technology that is employed, cost reductions in the har­vest, the development of new equipment, and the management of agricultural waste. These factors and others have ensured the success of the Brazilian biofuel program.

Fuel mixes with ethanol content higher than 10 % might face constraints because of fuel market infrastructure with more flex-fuel vehicles being needed and distribution networks adjusted (Szulczyk et al. 2010). Based on data and projections made by the Energy Information Agency (EIA) in the 2009, Annual Energy Outlook (The U. S. Department of Energy 2009) future penetration costs of E85 are estimated. Calculations reflect the EIA projected increasing differ­ence between price of wholesale ethanol and gasoline as penetration increases (as discussed Beach et al. 2010). Table 3 presents estimation of market penetra­tion costs for ethanol. These costs are additional costs of infrastructure modi­fication, adding to feedstock costs, transportation costs, and processing costs incurred in refineries.

Biomass components mainly include lignocellulose, extractives, lipids, pro­teins, simple sugars, starches, H2O, hydrocarbons, ash, and other compounds (Kumar et al. 2009). Lignocellulosic biomass chemically consists of three main fractions: (1) cellulose (CH1.67Oo.83), (2) hemicellulose (CH1.64Oo.78), and (3) lignin (C1oH11O35). Cellulose is a polymer of glucose (a C6 sugar), which can be used to produce glucose monomers for fermentation to, for example, bioethanol. Hemicellulose is a copolymer of different C5 and C6 sugars including, for exam­ple, xylose, mannose, and glucose, depending on the type of biomass. Lignin is a branched polymer of aromatic compounds. The cellulose present in lignocellulosic biomass is resistant to hydrolysis. Therefore, to produce bioethanol or biobutanol from lignocellulosic biomass via biochemical route, it is essential that the biomass is pretreated in order to enable hydrolysis of the cellulose into sugars. Different pretreatment technologies have been developed (steam explosion, treatment with acids or bases, etc.) (Table 3), but the common purpose of these technologies is to break open the lignocellulosic structure. The primary goal of feedstock improve­ment should be to enhance the quality and efficiency of the pretreatment process, which would necessarily involve pretreatment efficiency and enzyme efficacy.

Catalyst loading is another important parameter that can significantly affect the yields of degradation products. In this study, three different levels of catalyst load­ing, i. e., 5, 10, and 15 % were investigated for effects on the degradation of HDPE. In this study, the reaction time was fixed at 3 h for HZSM-5 (Si/Al = 80) catalyst. Meanwhile, in case of AlSBA-15 catalyst, initially, the reaction was carried out at a catalyst loading of 5 % for 4 h due to slower reaction to achieve significant level of degradation. As shown in Table 5, a catalyst loading at 10 % yielded the highest amount of light liquid while it produced the least amount of volatile gaseous product as compared to the other two catalysts loadings. The solid coke formation was found to be about 7 % for catalyst loadings of 5 and 10 %. Its yield was slightly higher with 15 % catalyst loading as 7.7 wt. % of the overall weight of residue was obtained.

The trace for waxy compound with 5 % catalyst loading amount was detected, but it was negligible and difficult to be accurately measured. The possible reasons of low conversion of degradation product to liquid were due to the concentration of 5 wt. % catalyst which was considered low to provide sufficient number of active sites for the degradation of large- to moderate-sized polymer chains. However, the optimum catalyst loading was found to be at 10 wt. %. It was further noted that larger amount of catalyst loading might promote faster reaction with higher forma­tion of coke in the residue of degradation products. This might be the reason for the catalyst inactivity throughout the degradation process (Ochoa et al. 1996).

In Fig. 9, the highest amount of liquid degradation product was obtained at 15 wt. % of catalyst loading (23.5 wt. % of the feed polyethylene). It also pro­duced moderate amount of volatile gaseous degradation products (52.2 wt. %) as compared to that obtained using HZSM-5(80). Furthermore, it could prove the theory that zeolitic catalysts such as HZSM-5 promote the production of

gaseous products during degradation of polyethylene. At the same time, it was not considered to be an ideal catalyst for the purpose of maximizing the degradation into liquid yield. However, one of the major disadvantages of using higher cata­lyst loading to increase the liquid product yield was that the formation of higher amount of solid coke in the residue might lead to the poor overall catalyst activity.

It was also observed that at 5 % of catalyst loading, no liquid or gaseous prod­ucts were successfully collected due to the formation of large amount of solid waxy compounds leading to a blockage at the reactor outlet. This was due to the rapid solidification of melted polyethylene degradation products when they were exposed to lower temperature at the reactor outlet. The small amount of catalyst loading was also unable to reduce the activation energy of the degradation process to enable the degradation mechanism to take place rapidly. However, significant formation of solid waxy compound was successfully inhibited at 10 wt. % of cata­lyst loading. Consequently, sufficient amount of liquid and gaseous degradation product was successfully collected. As illustrated in Fig. 9, the maximum liquid yield could be obtained at 15 % of catalyst loading. At the same time, less amount of solid waxy compound might be formed.

Fig. 10 Composition of gas products at 673 K using HZSM-5(80) catalyst over different catalyst loadings

Fig. 11 Composition of gas degradation products using various loadings of AlSBA-15 catalyst at 673 K

Figure 10 shows the data on the gaseous products using HZSM-5(80) catalyst. The highest composition was reported by C4 for 5 and 15 % of catalyst load­ings (27.8 and 33.6 %, respectively). Meanwhile for 10 % of catalyst loading, the highest proportion of C3 carbon chain was 38.4 %. At 5 % of catalyst loading, the amount of catalyst active site was deemed insufficient to cause significant deg­radation of polyethylene. Thus, higher amount of longer carbon chain molecules were produced as they could undergo further cracking reactions into smaller mol­ecules (Pierella et al. 2005). The results also indicated that increasing amount of catalyst would create better uniformity in the products distribution as seen in the case of 15 % of catalyst loading.

Likewise, data regarding catalyst loading and its effects on the degradation of HDPE to gaseous products using AlSBA-15 catalyst at 400 °C are shown in Fig. 11. The highest yield was recorded by the carbon chain of C4 with 15 % of catalyst loading (38.2 %). At 10 % of catalyst loading, its C3 carbon chain composition in the product was 42.1 %. It was also confirmed in earlier findings that the gas prod­uct was more concentrated in the middle of the carbon chain range such as C3 and

Fig. 12 Composition of liquid degradation products by various loadings of HZSM-5 (80) catalyst at 673 K

Fig. 13 Composition of liquid degradation products using various loadings of AlSBA-15 catalyst at 673 K

C4 (Hua et al. 2001). However, no product was detected for Ci products. Similar to earlier case, the use of higher catalyst loading produced more uniform products dis­tribution as in case of HZSM-5 catalyst. By comparing the degradation results using HZSM-5(80) and AlSBA-15 catalysts, it could be concluded that microporous cata­lyst HZSM-5(80) produced more shorter-chain carbon products. At the same time, mesoporous catalyst AlSBA-15 yielded more longer-chain carbon products.

Figure 12 shows the effect of catalyst loading on the distribution of degradation liquid products using HZSM-5(80) as catalyst at 400 °C. The highest composition was recorded with 5 % of catalyst loading to give a C21-C24 carbon chain range of 25.1 %. For the use of 10 and 15 % of catalyst loadings, the compositions of C8—C12 carbon chain range were 34.2 and 30.4 %, respectively. The longest carbon chain range C25+ was the minor product leftover after the degradation process. For this catalyst, it could also be seen that highest product yield was accu­mulated at the lighter end of the C8-C12 and C13-C16 carbon chain ranges.

By comparing to the earlier findings made using HZSM-5(80) catalyst (Koc and Bilgesu 2007), AlSBA-15 mesoporous catalyst showed a more non-uniform distribution (Fig. 13). The highest composition was recorded by a carbon chain

range of C8-C12, i. e., at 10 % catalyst loading (34.2 % yield) while at 15 % catalyst loading, 31.1 % yield of C13-C16 substances was obtained. Similarly, the heaviest carbon chain range, i. e., C25+ again recorded the smallest composition. The difference between the higher end and lower ends was bigger compare to the findings made using HZSM-5(80) microporous catalyst.

The oil crises in the 1970s awakened oil-importing countries to their dependency on oil-rich nations. Increasing energy demand, together with finite stock of fossil fuels, has resulted in rising oil prices over time. Since a good deal of global oil pro­duction occurs in politically unstable regions, thereby resulting in recurrent shocks, price spikes and general volatility, concerns about national security have escalated during an era of increasing energy demand (Council of Economic Advisers 2008). From an economic perspective, the pursuit of energy security can be related to a number of possible market failures, including the power of OPEC and the unequal distribution of oil wealth around the globe. This results in insufficient competi­tive conditions, which led to sub-optimal resource allocation (Tsui 2011). From a national perspective, the energy security argument ascribes benefits to reducing oil imports (Delucchi and Murphy 2008; Lapan and Moschini 2012). For example, the hidden cost of oil dependence for the United States is estimated to be about USD 3 per gallon of conventional liquid fuel (Copulos 2007). This cost includes incremen­tal military costs, supply disruption costs and direct economic costs.

Given that the existing mobile energy paradigm relies heavily on liquid fuels, this means, especially in the developed world, exchanging increasingly price-vol­atile hydrocarbon-based liquids fuels for a proportion of biofuels, the feedstock of which can be grown domestically, or at least sourced from comparatively sta­ble economies. An important issue is that biofuels are generally blended with hydrocarbon-based fuels. In effect, biofuels, especially land — and labour-intensive first-generation biofuels, cannot replace hydrocarbon-based liquid fuels on a one — for-one basis, yet they can extend remaining petroleum supplies and, at a general level, the infrastructure that uses them. But this means that liquid fuels in countries desirous of enhancing their energy security will not be able to divorce themselves completely from the global oil price. Hence, the use of biofuels merely improves energy security, but does not result in independence from fossil fuels.

It is necessary to understand the link between energy (i. e. oil and biofuels) and agricultural commodity markets to analyse how biofuels, especially first-genera­tion biofuels, could meet the stated national energy security objective when using feedstock optimized for food production, rather than for energy production. Given that agriculture is an energy-intensive sector, one can draw a direct linkage from oil prices to agricultural commodity prices. The emergence of biofuel markets has raised another linkage between oil prices, biofuel prices and the prices of feedstock crops (and the prices of agricultural commodities in the end).[5] Biofuels have a direct effect on the agricultural sector because they use biomass as an input that, together with agricultural commodities, is produced on a fixed area of agricultural land. The increase of agricultural commodity prices could be significant owing to price inelasticities of food demand and land supply. For example, markets for corn, wheat and rice in the United States, the world’s reserve supplier of grains, saw a drastic increase in related food prices (AgMRC 2009). Corn prices rose from USD 2.20 per bushel in 2006 to above USD 5.20 per bushel in 2007 and reached a high of USD 7.60 per bushel in the summer of 2008. A casual observation also suggests a direct link between these price rises and biofuel output.

However, the potential impact of the expansion of first-generation biofuel pro­duction on food crop prices remains controversial. Some argue that biofuel produc­tion has an adverse impact on food prices and poverty, especially in developing countries (Runge and Senauer 2007; Mitchell 2008). The World Bank has shown that up to 75 % of the increase in food prices could result from biofuel expansion (Mitchell 2008), while the IMF estimated that the increased demand for biofu­els accounted for 70 % of the increase in corn prices and 40 % of the increase in soybean prices (Lipsky 2008). Likewise, the FAO (2008) and the OECD (2009) have argued that biofuel expansion was a substantial factor in causing food price rises. Yet some, like Hassouneh et al. (2011), Mallory et al. (2012) and Du and McPhail (2012), have played this down. Indeed, according to the USDA, the bio­mass demand for biofuels has little impact on food commodity prices (i. e. biofuel production generating only 3 % of the 40 % rise in global food prices) (Reuters 2008). Similarly, the European Commission (2008) argues that the impact of bio­fuel on food crop prices is likely to be very small. Alexandratos (2008) found that increases in the demand for food in emerging countries, particularly China and India, together with weather issues, poor harvests, speculation and financial crises, are the dominant factors behind demand shocks. Yet he acknowledges that the addi­tion of biofuels results in food crop demand growing faster than in the past, which could prevent the current commodity prices trending back towards pre-surge levels.

According to the theoretical framework developed by Gardner (2007), de Gorter and Just (2008b, 2009a), together with empirical work by Ciaian and Kancs (2011), increased bioethanol production results in increasing corn prices, which in turn sub­stantially increases bioethanol prices. Yet an increase in bioethanol prices does increase the price of corn and of other crops because corn competes for land with other crops, while other crops are substitutes in consumption. Thus, the circular impact of high corn and bioethanol prices continues until the opportunity cost of corn for other uses is above the marginal benefit derived from converting corn to bioetha­nol when high-cost biofuel feedstocks are present. Above this point, bioethanol would cease to be produced unless there are substantial production subsidies. The ineffi­ciency of production subsidies owing to high taxpayers’ costs and the cost of interac­tion effects between existing policies (de Gorter and Just 2009a, 2010) implies that, with rising feedstock prices over time, no additional bioethanol would be produced in the longer term when subsidies are no longer enough to induce production. Indeed, a direct link between rising agricultural commodities prices and biofuel output raises concerns about the viability of biofuel production at a scale sufficient to replace a sig­nificant proportion of a nation’s use of petroleum. This is because biofuel production and costs are uncertain and vary with the feedstock available, together with price vola­tility. This is especially the case when feedstocks need to be imported.

U. S. Imported Crude Oil

Price

$/barrel

=== U. S. Diesel Fuel Price $/gallon

= =U. S. Gasoline Price $/gallon

——— Iowa Corn Price

$/bu

…….. Iowa Soybean Price

$/bu

— — .Iowa Ethanol Price $/gallon

The limitation of direct food-versus-fuel competition therefore favours the development of later-generation biofuels derived from non-edible biomass. Although these biofuels have addressed some of the problems associated with first-generation biofuels, the issues of competing land use and required land-use changes with regard to second-generation biofuels’ feedstock production are still relevant (Brennan and Owende 2010). Since food demand and land supply are price inelastic, the price increase of agricultural commodities owing to competi­tion with second-generation biofuels’ feedstock production may still be substan­tial. Figures 2 and 3 show the price trends of agricultural commodities and energy in the United States and at a global level, respectively. Prices of agricultural com­modities have been volatile and are rising over time. Although the surge in the sugar price during 2010-2011 stemmed from weather shocks and poor yields in the two largest sugarcane-producing nations (NREL 2013), i. e. Brazil and India, sugarcane-based bioethanol production was arguably another contributing factor (Alexandratos 2008). At a global level, the prices of palm oil and soybean are even more volatile. The explanation could be that both palm oil and soybean are not only used as feedstocks for biodiesel, but also are in demand for other purposes.

Furthermore, the trends of these agricultural prices are very much similar to those of energy prices, and crude oil prices in particular. The link between crude

Crude Oil, OK WTI Spot Price FOB (Dollars per Barrel)

oil prices and those of agricultural products works via the following: (a) the effects of crude oil prices on agricultural commodity production costs given agriculture’s heavy reliance on energy-intensive inputs (fertilizer, fuel and, in irrigated agri­culture, electricity) and (b) the macroeconomic effects of crude oil prices, e. g. on inflation, incomes, interest rates, exchange rates and foreign trade, all of which have impacts on the agricultural commodity demand-supply balance affecting the prices (Alexandratos 2008). The implication from Mitchell’s estimates (2008) is that the increased petroleum costs caused food prices to increase by 15-20 %. Thus, the use of pro-biofuel policies to improve national energy security becomes questionable. This is because a nation cannot entirely escape from oil price volatil­ity by moving to biofuels derived from edible crops because these remain linked to global oil prices. The difficulty of escaping from oil price volatility is exacer­bated with first-generation biofuels, but also might apply when a market is cre­ated for non-edible feedstocks, the production of which will also, in some cases, be affected by crude oil prices. Although later-generation biofuels could limit mar­ket distortions relating to the direct food-versus-biofuel competition, they may not escape volatility relating to fossil fuel prices. This would especially be the case for grass crops, but perhaps not for milling residue.

The objective of this research was of evaluating the concentration level of the bio­fuels industry market in Brazil from 2005 to 2012. Additionally, we calculated the concentration level for each Brazilian region, as well as the authorized productive capacity usage level and the impact of the industrial concentration in the average price and rentability of this industry.

For this research, we used the HHI and the CR to measure the evolution of industrial concentration level. The results point to a high concentration until 2006, when concentration of biodiesel industry started decreasing expressively, mak­ing the concentration in the industry atomistic, i. e., the industry has highly com­petitive features, considering the current concentration low level. These results reflect on the average price practiced by the 16 largest companies in the sector (that represent around 80 % of the volume produced in the country), and the other companies, where there was no statistically significant difference, where the aver­age prices practiced among both categories. This result can be explained by the hypothesis that companies would not have significant gains granted the sector’s low concentration, that prevents the significant reduction of auction prices, thus indicating some homogeneity of the prices practiced in the biodiesel industry in Brazil.

Besides the high competitiveness of this sector, it was possible to point out that most of the companies located in the south and central west regions, since these regions are known for their high soybean production, the main raw mate­rial used for biodiesel in Brazil. We also pointed out that the south region shows a high level of installed capacity usage level of its companies, pointing to a possible productive gap for this region, which represents 34 % of the national production.

On the other hand, we could see that the Brazilian ethanol industry concentra­tion is highly concentrated in the central-south region, where Sao Paulo (state) produces around 50 % of the Brazilian ethanol, considering that the concentration for ethanol distribution market has grown significantly in the last few years, which has implied better pricing opportunities and a better profitability for the sector, in detriment of consumers.

The conversion of biomass to biofuel varies substantially. First-generation bioethanol is produced through conventional fermentation of starch in the feedstock to convert it into glucose, which is then hydrolysed with the help of enzymes (Naik et al. 2010). The rest of the plant, as mentioned previously, is not employed in the production of bioethanol. It is therefore discarded, or used elsewhere, such as for fertilizer or as fuel in stationary energy provision. As a result, a substantial amount of the energy associated with cultivating, harvesting and processing is lost, with concomitant impacts on the environment, especially when carbon-based energy sources contrib­ute the bulk of the energy inputs, as they normally do so at present (Van der Laaka et al. 2007). A relatively high level of inefficiency and an arguably poor allocation of energy resources throughout the production process are therefore observable here.

First-generation biodiesel is produced from lipids, such as animal fats and vegetable oils, being reacted with an aliphatic alcohol, most often methanol or alcohol, in the presence of a homogeneous or heterogeneous catalyst (Naik et al. 2010). This process is generally referred to as transesterification. Some of the major drawbacks of this process include inefficient extraction of oil from seed, poisonous methanol run-off, high-reaction parameters and the complicated purifi­cation process that requires vast quantities of freshwater, which becomes contami­nated by small quantities of biodiesel. This necessitates water treatment to prevent these impurities entering ecosystems (Parida et al. 2011).

Some of the problems discussed above, however, may be addressed in the future through improvements in biotechnology. For example, genetic manipulation, together with biotechnological developments and improved horticultural practices, has the potential to greatly increase the amount of fermentable starches, sugars and oil found in crops destined for biofuel production (McLaren 2005; Davis et al. 2008). The use of sugar cane for biomass in Brazil has already shown itself as a leading light in first — generation bioethanol production, especially given that the fibre of the plant itself is used to produce the energy needed to produce the bioethanol (Larson 2008).

Second-generation biofuels are produced in a more sustainable way. There are two types of processes used to generate these fuels. The first, sometimes referred to as biochemical, uses enzymes to convert plant cellulose into bioethanol (Foyle et al. 2006; von Blottnitz and Curran 2007), with cellulosic or lignocellulosic (if the biomass contains lignin or woody material) bioethanol being the result. The second process, which is thermo-chemical in nature, is generally known as anhy­drous pyrolysis. This involves the chemical decomposition of biomass by heating it in an anaerobic environment, or without any reagents, so as to convert the plant material into liquid bio-oil or syngas. Liquid bio-oil cannot be used in conven­tional internal combustion engines, although it can be combusted to produce elec­tricity for stationary energy requirements (Chiaramonti and Tondi 2003). By way of contrast, fuels for conventional transport applications, including combustion in turbines, can be synthesized from synthesis gas (syngas) by subjecting them to heat treatment in the presence of air (Eggert et al. 2011). This is not a new pro­cess, having existed for decades, such as the gasification of fossil fuels to produce Fischer-Tropsch diesel, which, like Fischer-Tropsch gasoline, can also be cre­ated from second-generation biomass conversion (Larson 2008). In all these cases, high pressure and temperature requirements necessitate considerable energy inputs (Ragauskas et al. 2006).

It is obvious that a production process that uses all or almost all of the bio­mass is much more environmentally advantageous compared with first-generation processes. Furthermore, the choice of biomass for lignocellulosic bioethanol is much wider, which should allow a better matching of crop to local climatic con­ditions. For example, various types of hardy grasses requiring minimal care, and thus reduced energy inputs, can be used to produce the feedstock. Short rota­tion crops emerge as particularly useful for this purpose, including woody plants such as coppiced willow and poplar. Agricultural waste, such as sawdust, wood — chips or bagasse produced from sugar production, also looms as a clear possibil­ity for bioethanol production (Wright 2006). With anhydrous pyrolysis, any kind of organic waste material can be used. At present, second-generation production processes more or less only exist on a test or commercial demonstration scale, with almost all the commercial biofuel currently being used coming from first — generation processes (Eisentraut 2010). Stephen et al. (2011, p. 160) cite “large technological risk, large capital cost (driven by economies-of-scale), and the poor predicted economic performance of biorefineries” as the main barriers to their commercial uptake.

Overall, there is substantial debate about whether the production and applica­tions of fertilizers, pesticides and herbicides, together with energy inputs into the cultivation, harvesting, transport and production processes relating to the biomass and resultant biofuels themselves, in effect cancels out much of the energy derived from combusting biofuels for mobility-related purposes (Patzek et al. 2005). This is particularly so with regard to first-generation processes involving the waste of significant parts of edible food crops. Whatever the case, as Charles et al. (2007, p. 5743) concluded, “earlier biofuels have proved, at best, to be only marginally more environmentally sustainable and less polluting than fossil fuels, especially when one factors in resource requirements, in addition to production and refining costs”. Of course, improvement can clearly be expected as biomass cultivation and biofuel production methods are optimized over time.

The microalgae are photosynthetic organisms can grow in a wide variety of environments and conditions, including freshwater, salty, and brackish water (Benemann 2012). Their mechanism of photosynthesis is similar to higher plants, with the difference that the conversion of solar energy is generally more efficient because of their simplified cellular structure and more efficient access to water, CO2, and other nutrients.

Its uniqueness that separates them from other microorganisms is due to presence of chlo­rophyll and having photosynthetic ability in a single algal cell, therefore allowing easy operation for biomass generation and effective genetic and metabolic research in a much shorter time period than conventional plants (Singh and Sharma 2012).

In addition, the cultivation requirements are quite small, as most species only need water, CO2, and some essential nutrients such as nitrates, phosphates, and potas­sium, without needing the use of pesticides or fertilizers (Groom et al. 2008; Singh and Sharma 2012). Microalgae can produce lipids, proteins, and carbohydrates in large amounts over short periods of time. For these reasons, microalgae are capa­ble of producing 30 times as much oil per unit of land area compared to terrestrial oilseed (Sheehan et al. 1998). And these oil can be processed into both biofuels and valuable coproducts (Singh and Sharma 2012).

The microalgae cultivation can be heterotrophic or autotrophic. The hetero­trophic method is a biochemical conversion that relies on input feedstock derived from an upstream photosynthetic source. This approach uses closed bioreactor systems in a biochemical conversion process without light inputs. This dark fer­mentation process is based on the consumption of simple organic carbon com­pounds, such as sugars or acetate. The cultivation of algae using cellulosic sugars produced from wood and agricultural wastes or purpose-grown energy crops is an area of active research and development (Buford et al. 2012).

In the other hand, the autotrophic cultivation requires only inorganic com­pounds such as CO2, salts, and a source of light energy for their growth. This photosynthetic conversion involves two main methods: open ponds and closed photobioreactors (PBRs). The biomass produced in these autotrophic processes includes lipids that can be converted to fuels (Brennan and Owende 2010; Buford et al. 2012).

According to Benemann (2012), algae have been essentially produced in open ponds with the main strains currently being cultivated are Spirulina, Chlorella, Dunaliella, and Haematococcus. Most designs include mixing systems that use paddle wheels and carbonation techniques to supply and transfer CO2 (in-ground carbonation pit, bubble covers, and in-pound sumps1).

Microalgae are also grown in tanks and small-scale PBRs, in hundreds of dif­ferent systems around the world, producing from small amounts to huge sums of

http://www. powerplantccs. com/ccs/cap/fut/alg/alg_carbonation. html.

biomass annually. In this closed autotrophic approach, algae grow with sunlight or artificial lighting (Benemann 2012; Buford et al. 2012). Different types of PBRs have been designed and developed for cultivating algae that can be horizontal, vertical, tubular, flat, etc. (Benemann 2012; Singh and Sharma 2012). Each of these PBRs has their own advantages and disadvantages. Several studies are being developed which may overcome their limitations in the years to come (Singh and Sharma 2012).

In EU-27, the biomass consumption accounts approximately for 95.7 Mtoe, of which only a small part is used for biofuels, the rest for heat (40 Mtoe) and for electricity (48 Mtoe). If the renewable targets of the EU are to be met, an additional 120 Mtoe

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of biomass needs to be produced by 2020, which would have to be obtained mainly from additional forest resources, but also new sources such as aquatic biomass, and eventually imports that will have to meet sustainability criteria.

In the European Union, the utilized agricultural area (UAA) is 178.44 million of hectares (Mha) which represents 41 % of the whole EU27 territorial area, while arable land represents almost one-quarter of European territory (24 %). In Europe, it is estimated that approximately 2.5 Mha of agricultural land is dedicated to bio­energy crops for liquid biofuels (Aebiom 2012), which represents about 1.4 % of the utilized agriculture area (UAA). ‘The European Commission (2011) calculated that 17.5 million ha of land would be required to reach the 10 % biofuels target, which would amount to about 10 % of the total utilized agricultural area (UAA) in EU27’ (Panoutsou et al. 2011: 3).

For this reason, the biodiesel companies of different member states have invested in third countries and in particular in Africa, to produce vegetable oil from Jatropha. But in order to be sustainable, the use of biomass for fuel and energy purposes must not jeopardize European and third countries’ ability to secure its people’s food supply, nor should it prevent achieving environmental pri­orities such as protecting forests, preventing soil degradation and keeping a good ecological status of waters.

The European agricultural land for biodiesel is used to produce oilseed crops (rape — seed, sunflowers, soybean) which are the major feedstock used to produce biodiesel (Fig. 6). Increased demand for oils from biodiesel producers has become over the past few years one of the driving forces of the global vegetable oil market. Any changes in biofuel policies in the European Union and in the USA as well as any advances being made on the next generations of biofuels is bound to alter the demand of vegetable oils for non-food purposes. Furthermore, in the coming years, national biofuel poli­cies may also increasingly affect international trade in vegetable oils used as biodiesel feedstock as well as trade in biodiesel itself (OECD-FAO 2012).

At global level, rapeseed oil, sunflower oil, soybean oil, and palm oil are the most produced vegetable oils. According to USDA data (Fig. 7), the global produc­tion of palm oil accounted for 39 % of all vegetable oils in 2011, followed by soy­bean oil (33 %), rapeseed oil (18 %), and sunflower oil (11 %). Figure 7 shows that

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the production of palm oil from 2000 to 2011 had a constant positive trend with an increase of 108 %. Remarkable results, in the same period, are also observed for rape — seed oil with an increase of 75 %, followed by sunflower (63 %) and soybean (59 %).

Although rapeseed oil and soybean oil are projected to remain the main feedstock, the use of palm oil is expected to more than double over the coming decade, with around 9 % of global palm oil production absorbed by the biofuel industry in 2021.

EU-27 and China are the world’s largest importers of vegetable oils, followed by India which shows an increase of 55 % respect to 2007. Despite Malaysia and Egypt being the countries with the highest increase of imports (81 and 73 %, respectively), their import levels are still low (USDA 2011). Indonesia, Malaysia, and Argentina have dominated the export market since 2007, even with Argentina’s decrease (-17 %) with respect to the previous years. Russia and Ucrania are the countries with the highest increase of exports (263 and 100 %, respectively), but their contri­bution to the export market remains marginal (USDA 2011).

Demand from the biodiesel industry is set to grow less than in the previous dec­ade when biofuel demand accelerated as policies were put in place. The use of vegetable oil for biodiesel is still expected to expand to 30 Mt, which corresponds to a 76 %increase over the 2009-2011 and raises the share of vegetable oil con­sumption used for world biodiesel production from 12 % in 2009-2011 to 16 % in 2021 (Fig. 8) (OECD-FAO 2012).

In the developed world, biodiesel demand should account for 73 % of total consumption growth. Biodiesel demand growth should continue to be lead by the European Union, where biofuel producers are expected to absorb 51 % of domes­tic vegetable oil up from 40 % in 2009-2011. Starting from a relatively small base, demand from the biodiesel industry is expected to almost double in the developing world, with growth in absolute terms not far behind the one projected in developed countries. Growth is expected in the traditional producers, Indonesia, Malaysia, and Argentina, but also in other parts of Asia (Thailand, India) and South America (Brazil, Colombia). Argentina further expands its export-oriented biodiesel indus­try, which, by 2021, could absorb 31 % of domestic vegetable oil output (OECD — FAO 2012).