Armenta et al. (2008) established the creation of the term green analytical chem­istry based on: (1) sample treatment; (2) oriented scanning methodologies; (3) alternatives to toxic reagents; (4) waste minimization; (5) recovery of reagents; (6) online decontamination of wastes; and (7) reagent-free methodologies. Thus, it should be considered that the analysis of biomass should be based on the 12 principles of green chemistry proposed by Anastas and Warner (1998), since the context of its use is reflected in the sustainability of feedstock and processes.

Some of the 12 principles of green chemistry are closely related to the imple­mentation of green analytical methodology, which are as follows: (1) atomic and

energy economy; (2) use of catalytic reactions instead of stoichiometric reactions; (3) decreasing solvent use; and (4) a decrease in residues (Anastas and Warner 1998). The application of these principles will contribute to achieve a more sus­tainable analytical methodology, as can be seen in Fig. 9.

In some cases, it is very difficult to apply all of those principles presented in Fig. 9, because each analytical method has its particularities and limitations. Then, we need to seek other principles as waste prevention, design for energy efficiency, use of real-time analysis for pollution control, and inherently safer chemistry for accident prevention; this strategy will ensure a greener chemical analysis and ana­lytical chemistry.

3 Conclusions

Chemical analysis of biomass is an important branch of analytical chemistry because it can provide information about the constitution of feedstocks, processes, products and by-products, and residues. Analytical techniques are at the core of the analytical laboratory, and the understanding of its principles is necessary for real-world applications. Then, this can be applied on a whole biofuel chain to solve many technical and scientific problems, as: best uses for a biomass, improvement of conversion processes, increase in the quality of biofuel, and control of residues.

Nowadays, green chemistry and sustainability of processes and products are themes that passed from academic discussion to practical use. Then, analytical chemistry as part of chemical sciences should follow this current trend, which can contribute to a bioeconomy based on biomass use instead of non-renewable raw sources, as the oil, and an advance in biomass knowledge to develop their best uses.

1.1 Chemicals and Catalysts

Microporous HZSM-5 (Si/Al = 80), HZSM-5 (Si/Al = 14) and mesoporous SBA-15 and AlSBA-15 catalysts, high-density polyethylene, nitrogen gas, cooling water, hydrochloric acid, N-hexane, triblock copolymer (TCP), tetraethylorthosilicate, and aluminum chloride were the chemicals or reagents, and they were used as received from respective suppliers.

1.2 Preparation of HDPE Sample

The material in pellet form was crushed into powder and then subsequently sieved using a sieving machine to obtain the desired particle size range. Sample of 60-150 mesh size was used in this study.

In the last three decades, the US ethanol industry has grown from small areas of the midwest to 211 plants operating in 29 states with an annual capacity of 14.8 billion gallons. Over 80 % of this ethanol is produced in the so-called corn belt,

which includes nine states: Iowa, Nebraska, Illinois, Minnesota, South Dakota, Indiana, Ohio, Kansas, and Missouri.

In 2012, in the middle of a severe drought, the industry operated very close to its maximum capacity: It used approximately 90 % of its capacity to produce approximately 13.3 billion gallons of ethanol. A significant increase in ethanol production (approximately 43 %) can be observed in Fig. 8 in this period. Even with the drop in US corn production to 10.8 billion bushels in 2012, the national ethanol production remained stable.

The demand for ethanol remains strong especially because it is mixed with gasoline and used in flex-fuel cars. In the USA, most recently introduced cars run on blends of up to 10 % ethanol, and the local manufacturers are developing vehicles that will be able to run on higher percentages of ethanol blends. Since 2008, almost any type of commercial vehicle that has been available in the market has had the flex-fuel option.

Part of America’s ethanol is produced for export. During 2012, the industry exported 750 million gallons of ethanol, or 6 % of the entire production. The US etha­nol industry is confronting protectionist policies from Brazil and the European Union, which expect to increase their exports. In addition, E10 is available almost every­where in the domestic market, but the industry’s goal is to generally use E15 blends.

An expansion of ethanol production with a strong investment in increasing the capacity of production is expected in the USA based on some existing factors: (1) the replacement of MTBE by ethanol, (2) government policies that incentivize the reduc­tion of the country’s dependence on foreign oil, and (3) the need for fuel production.

After analyzing the biodiesel supply and demand, it is clear that in 2005 the USA had 45 biodiesel plants in operation that produced an average of 6.5 million gallons per year. Currently, there are 193 such plants, and their total capacity is 2,917.72 in millions of gallons. Points of biodiesel sale are located in the middle of the USA, with great concentrations in the states of Minnesota and Missouri,

which are the forerunners of the project. Figure 9 shows the production of biodiesel and soybeans in the USA.

From 2009 until 2012, there was a reduction in the production of soybeans in the USA, but the production of biodiesel continued to increase. Indeed, there was a production increase of 43 % between 2008 and 2012.

The major challenge for the US biodiesel industry is the increasing price of soybeans. This price increment is partly explained by the lower yield (in metric tons per hectare) of soybeans compared to corn (which is necessary for producing ethanol), and partly by the expansion of corn production in the USA. This expan­sion occurs to the detriment of soybean production to meet the surging demand from the emerging ethanol industry (Sawhney 2011).

In 2005, 2.3 % of the overall US soybean production was used for manufac­turing biodiesel. This percentage rose to 19.2 % in 2009. The higher compound annual growth rate (CAGR) for the use of soybeans for biodiesel production rel­ative to the rate of overall soybean production emphasizes the increasing use of soybeans for biodiesel production (Sawhney 2011). Although it has been growing rapidly, in 2009 the total amount of biodiesel produced in the USA was small at approximately 7 % of the total ethanol production (Hoekman 2009).

2 Conclusions

The complexity of the activities that involve the production and trade of biofuels surpasses geopolitical boundaries. The early development of this market was a response to the need for an alternative source of energy to replace fossil fuels.

At the moment, the development of biofuels is not exclusively associated with petroleum replacement. Because it represents a reduction of greenhouse gas emissions, biofuel production is also related to environmental protection.

This chapter presented evidence of a significant increase in the demand for bio­fuels in many countries, which contributes to their energy and environmental secu­rity and adds value to their agriculture.

The incentive programs for biofuels depend on government policies such as changes in taxes, grants of subsidies to producers and consumers, and mandatory quotas with minimum participation rates of biofuels. However, the production of biofuels differs in each studied country. In general, the main drivers are the cli­matic conditions, the availability of raw materials, the structures of the production chains, mastery of the necessary processing technologies, and the availability of (public and private) investment.

The development of biofuels’ chains is recent and depends on the whole structure of the chain and not exclusively on one institutional agent. In this context, the devel­opment of more economically attractive biofuels is challenging and demands both further searches for alternative raw materials with higher efficiency and lower pro­duction costs and the continuous improvement of the relevant industrial processes.

Michael B. Charles and Suman Sen

Abstract Although biofuels have the potential to supplement conventional petroleum fuels in a variety of energy applications, and as transport fuels in particular, their use also poses some problems from an environmental perspective. Concerns exist relating to whether positive net energy (and therefore effective greenhouse gas mitigation) can be derived from biofuels, whether the cultivation of biofuel feedstocks leads to significant environmental degradation and whether their use could hamper the imple­mentation of a more long-term transport energy paradigm. Yet a clear understanding of these issues, together with the more important technical aspects relating to biomass cultivation and biofuel production, has the potential to ensure that biofuels can play a successful role in weaning the planet off its current carbon dependency. In particular, the ability to assess the total life cycle of biofuels from cradle to grave emerges as a particularly important consideration in ensuring that cultivation and production pro­cesses are optimized.

1 Introduction

The environmental impacts of liquid biofuels remain highly controversial. Biofuels, such as bioethanol and biodiesel, are often touted by their proponents as an envi­ronmentally friendly means to address issues relating to energy security and carbon dependency. This is especially the case given that they can largely be distributed via existing networks and distribution channels, such as those used to distribute conven­tional petroleum-based gasoline (also known as petrol) and diesel. They can also be blended relatively easily with petroleum-based fuels in their anhydrous forms. Biofuels therefore fit comfortably within the existing transport energy paradigm and result in fewer adaptation costs in comparison with those associated with other

M. B. Charles (*) • S. Sen

Southern Cross University, Gold Coast, Australia

e-mail: michael. charles@scu. edu. au

A. Domingos Padula et al. (eds.), Liquid Biofuels: Emergence, Development and Prospects, Lecture Notes in Energy 27, DOI: 10.1007/978-1-4471-6482-1_8, © Springer-Verlag London 2014

mobile transportation energy sources, such as electricity or hydrogen. They have also proved popular among a variety of stakeholders on account of their ability to (1) provide new outlets for increasingly uncompetitive agricultural producers in the developed world and (2) open up new revenue-generating opportunities for farmers in the developing world.

Furthermore, perhaps the very fact that biofuels are produced from natural organic material, usually referred to as biomass, has contributed to the popular perception among politicians, interest groups and the broader public that they are more sustainable than conventional petroleum-based liquid energy products. This is compounded by the fact that combustion of biofuels per unit of volume demon­strably produces less greenhouse gas (GHG) emissions in comparison with con­ventional liquid fuels (EPA 2002). A greater reliance on biofuels in the transport industry is thus regarded as a positive step with respect to reducing overall GHG emissions from a sector that is widely criticized on account of its overall environ­mental impacts. Indeed, according to the IPCC (2007), transport is the fourth high­est emitter of GHGs and contributes 13 % of total emissions globally.[14]

Although biofuels have a clear place within the broader array of renewable fuels poised to overcome global carbon dependency, their use nevertheless has significant environmental implications at a global, national, regional and even local level. These problems result not only from the growing of the organic material required for their production, but also in the manufacturing, distribution and use of the resulting fuel. Issues of real concern include (1) whether the overall life cycle of biofuels results in negative net energy and thus the production of more GHGs than it saves; (2) whether the growing of agricultural inputs into the biofuel production process results in a loss of biodiversity and similar environmental impacts through changed land-use and the overzealous application of fertilizers, pesticides and herbicides; and (3) whether an increase in the use of biofuels will hamper the adoption of more truly efficient tech­nology that will have greater potential to reduce the global carbon footprint. Indeed, the unregulated production and use of biofuels, together with a rapidly expanding demand for the crops on which their production relies, could have significantly detri­mental impacts on the environment that could, in time, outweigh the benefits poten­tially available through a more considered exploitation of this energy source. This chapter looks closely at the environmental impact of biofuels and aims to present the current scientific understanding of issues associated with their use in a way that will be accessible to policymakers, industry and other stakeholders.

A large number of individual processes are involved in the overall development of second-generation liquid biofuels via biochemical route. This leads to the possibil­ity of process integration that will lower the capital and operating cost and ensure that optimum production of high-value co-products is achieved. Although process integration has the benefit of cost reduction in most cases, it is not a universal strat­egy and may not be applicable to all the cases. Sometimes, there might involve large number of separate processes that should be linked to produce value-added products, and this increases the overall process cost.

Process integration can be done by several ways; for example, a two-stage fermentation process that can ferment glucose and xylose in separate ferment­ers. This would maximize sugar yields and also produce valuable products from separate fermentation process. Another possible approach to process integration could be application of thermophilic bacteria that can ferment both glucose and xylose (Bai et al. 2013; Ito et al. 2013; MacKenzie and Francis 2013). A single system can be developed that can hydrolyze and ferment sugars at the same time. Although this approach seems quite unrealistic at the moment, it can become true in the coming years by extensive research in the area. The integrated system of lignocellulose processing to liquid biofuels, if developed, can lower the bioethanol cost to 0.15 US$/l (IEA 2008). Therefore, process integration, although is a chal­lenging task, can significantly lower the biofuel cost and can pave the path toward an economical source of fuel for transportation in the coming years.

Aldara is currently Associate Professor at Agribusiness Engineering Department at Fluminense Federal University and Coordinator of the Agribusiness Research Group (called Grupo de Analise de Sistemas Agroindustriais) in Volta Redonda’s Campus, Rio de Janeiro. Since 2007, she has been studying the competitive driv­ers of the biodiesel production chain and issues related to environmental and social sustainability in Brazil, especially on account of the policy related to the National Program for Production and Use of Biodiesel (PNPB).

Biswarup Sen is an Assistant Professor in Department of Environmental Engineering and Science, and member of Green Energy Development Centre, Feng Chia University, Taiwan. He got his Ph. D. from Indian Institute of Technology, Madras, India. He has over 60 publications with research expertise in anaerobic biotechnology for biofuels and biochemicals and has received several research grants and honors. He serves as the Review Editor of “Frontiers Microbial Physiology and Metabolism” and Reviewer of several international journals.

Bruce A. McCarl—Regents Professor and distinguished Professor of Agricultural Economics, Department of Agricultural Economics, Texas A&M University, College Station, TX 77843-2124, US, email: mccarl@tamu. edu

Carlos Alberto Oliveira de Oliveira is a professor at Faculty of Technology of the Cooperative, and a researcher of agribusiness and rural development at Agricultural and Livestock Research Foundation (Fepagro), the official service of the State of Rio Grande do Sul, Brazil.

Dr. Christian Rammer is senior researcher at ZEW’s Department of Industrial Economics and International Management. His research activities include empiri­cal research on innovation in firms, technology transfer, and research policy. He worked as a senior researcher at the Austrian Research Center Seibersdorf, Systems Research Technology-Economy-Environment and as an assistant pro­fessor and lecturer at the Department for Economic Geography at the Vienna

A. Domingos Padula et al. (eds.), Liquid Biofuels: Emergence, Development 269

and Prospects, Lecture Notes in Energy 27, DOI: 10.1007/978-1-4471-6482-1,

© Springer-Verlag London 2014

University of Economics and the University of Linz. Christian Rammer holds an M. Sc. in Regional Analysis and a Ph. D. from the University of Vienna.

Daniel Fernando Rolling is an Agronomist. Master in Agribusiness and currently a Ph. D. student of the Vegetal Production Program of the University of Santa Catarina state—UDESC, Brazil.

Dr. David Leiva-Candia is a Civil Engineer (expertise in bioprocesses), University of La Frontera, Chile, and holds an M. Sc. in Industrial Process Control (University of Cordoba, Spain) and a Ph. D. in second-generation biofu­els (University of Cordoba, Spain). He is postdoc at the Department of Physical Chemistry and Applied Thermodynamics, University of Cordoba. His research is focused on the production and quality analysis of microbial oil from different oleaginous yeast grown in waste feedstocks. He has been collaborating in several research projects concerning biofuels, biorefinery, and engine testing.

Eckhard Boles is a professor of molecular biosciences at Goethe University Frankfurt, Germany, since 2002. His research is focused on metabolic engineering of yeast strains for industrial purposes and transport of nutrients across the yeast plasma membrane. He has published more than 80 articles in international peer- reviewed journals and contributed to 13 important patents in the field of yeast bio­technology. Landmark patents were the construction of the first recombinant yeast strain able to ferment the pentose sugar L-arabinose, the cloning of the first bacte­rial xylose isomerase enabling yeast cells to ferment xylose and engineering yeast for the production of isobutanol. He is co-founder of the Swiss biotech company, Butalco, and has acted as a scientific advisor for several companies.

Gunter Festel is founder and CEO of the investment firm FESTEL CAPITAL. He has co-founded, as a Founding Angel, various technology start-ups in Germany and Switzerland like Autodisplay Biotech, Butalco, and Greasoline and is part­time faculty member at the Swiss Federal Institute of Technology, Zurich, and the Technical University, Berlin. He is the chairman of the board of the Association of German Biotechnology Companies, a member of various advisory boards and con­sultant to the OECD as well as different governmental departments in Germany, Austria, and Switzerland. Gunter Festel holds different master degrees and two Ph. Ds in natural sciences and economics.

Dr. Hong To joined Southern Cross Business School, Gold Coast, Australia, as a Postdoctoral Fellow in Applied Economics in 2010, after completing her Ph. D. in Economics at Department of Economics of University of Ottawa in Canada. Hong has undertaken research in the area of environmental economics, economic model­ing, and policy formulation.

Mario Otavio Batalha is Chemical Engineer, M. Sc. and Ph. D. in Industrial Engineering; professor at the Department of Industrial Engineering and Graduate Program in Sao Carlos Federal University—UFSCAR, Brazil.

Marta Wlodarz—Postdoctoral Researcher at Center for Energy Policy and Economics, Department of Management, Technology and Economics, ETH Zurich, 8032 Zurich, Switzerland, email: wlodarzm@ethz. ch

Martin Bellof is Business Development Manager at Autodisplay Biotech GmbH. Prior to joining Autodisplay, he worked for Macquarie Capital (formerly Investment Banking Group) in Frankfurt and Sydney and studied Biology and Business at Technical University of Darmstadt. In his final thesis, Martin analyzed success factors of corporate venture capital in the pharmaceutical and biotechnology industries.

Martin Wurmseher studied Business Administration at the University of Munich and is currently a Ph. D. student at the Chair of Technology and Innovation Management at the Department of Management, Technology, and Economics at ETH Zurich. Prior to his Ph. D. studies, he gained several years of profes­sional experience in Finance, Accounting, and Auditing in the banking industry. Furthermore, he holds the Swiss-Certified Public Accountant and the Financial Risk Manager (FRM) designations, gained professional experience in the Biotechnology industry, and is a member of the start-up research group at ETH Zurich.

Dr. Michael Charles Associate Professor, is a member of the Southern Cross Business School at Southern Cross University, Gold Coast, Australia. He has a Ph. D. from the University of Queensland and a Master of International Business Studies from the Queensland University of Technology. His current research mainly focuses on transport and environmental policy, public values and infra­structures, and systems in transition.

Dr. Pilar Dorado graduated from the University of Cordoba, Spain, in Agriculture Engineering. She followed this with an international master in Irrigation and Drainage (Ministry of Agriculture and Fishering, Spain) and a Ph. D. in Agriculture Engineering, in 2001. She was appointed lecturer in the Department of Mechanical and Mining Engineering at the University of Jaen. In 2005, she moved to the University of Cordoba (Department of Physical Chemistry and Applied Thermodynamics), and in 2012, she was appointed professor. She is head of the research group BIOSAHE since 2002. She has lead/participated in a number of Spanish Ministry-funded projects and two European-funded projects. Her research has been directed toward new renewable alternative fuels for internal combustion engines, including engine testing and the biorefinery concept.

Dr. Shazia Sultana is young scientist with research and teaching experience in the field of Renewable energy, Biofuel technology and Plant Systematics and Biodiversity. One hundred research publications (to date) in top international journals, more than 1000 citations, with high IF, H & I indices, 06 international books published and circulated internationally. Dr. Sultana is awardees of various national and international awards. Currently, she is working as fellow researcher in School of Chemical Engineering, Universiti Sains, Malaysia, and senior research associates in Biofuel Laboratory, Quaid-I-Azam University, Islamabad, Pakistan.

Dr. Silvio Vaz Jr. is a research scientist at Brazilian Agricultural Research Corporation (EMBRAPA). Holds a B. Sc. degree in Chemistry, a M. Sc. degree in Physical Chemistry, and a D. Sc. degree in Analytical Chemistry from University of Sao Paulo. His research lines are Analytical Chemistry and Renewable Chemistry.

Dr. Suman Sen is an academic at Southern Cross University, Gold Coast, Australia. His research interests are in the area of transport energy, public trans­port, road user charging, transport planning and policy, transport sustainability, business management, and corporate social responsibility and ethics. Suman also has an MBA and an MA in economics.

Vitor Francisco Dalla Corte is an Economist. Master in Business Administration, and currently, a Ph. D. student of the Agribusiness Graduate Program of the Federal University of Rio Grande do Sul — UFRGS, Brazil.

[1] These matters are dealt with in detail in chapter “Environmental Issues in the Liquid Biofuels Industry”.

[2] Bioethanol energy content is two-thirds that of gasoline, and therefore is referred to as litre of gasoline equivalent (lge).

[3] India, Pakistan, Swaziland and Zimbabwe have production costs that are broadly similar to those experienced in Brazil (Demirbas 2009; Dufey 2006).

[4] Biodiesel energy content is 10-12 % less than that of diesel, and therefore is referred to as litre of diesel equivalent (lde).

[5] de Gorter and Just (2010) have shown that crop prices, i. e. corn prices in the case of the United States, are directly linked to that of bioethanol. A theoretical framework with regard to the rela­tionship between sugar cane prices and bioethanol prices in Brazil or between palm oil/soybean prices and biodiesel prices in the European Union can be formulated easily in a similar way.

[6] This seal is awarded to biofuel producers who buy a minimum percentage of feedstock from family farmers, provide technical assistance, and enter into contracts with these farmers.

P. F. A. Shikida (*) • B. F. Cardoso • V. A. Galante • D. Rahmeier Universidade Estadual do Oeste do Parana, Toledo, Brazil e-mail: peryshikida@hotmail. com

B. F. Cardoso

e-mail: barbarafcardoso@gmail. com

[8] A. Galante

e-mail: vgalante@hotmail. com D. Rahmeier

e-mail: daliane. rahmeier@gmail. com

A. Finco • D. Bentivoglio • M. Rasetti Universita Politecnica delle Marche, Ancona, Italy e-mail: a. finco@univpm. it

D. Bentivoglio

e-mail: d. bentivogho@univpm. it M. Rasetti

e-mail: m. rasetti@univpm. it

A. Domingos Padula et al. (eds.), Liquid Biofuels: Emergence, Development and Prospects, Lecture Notes in Energy 27, DOI: 10.1007/978-1-4471-6482-1_2, © Springer-Verlag London 2014

[9] The list below gives the main tools which are/have been used to promote biofuels in the EU: Proposal directive European Communication COM (2012) 595 final: ILUC proposal; European Communication COM (2010) 160/01; COM (2010) 160/02: sustainability criteria; European Decision 2010/335: Guidelines for the Calculation of Land Carbon Stocks; Renewable Energy Directive (RES-D) Directive 2009/28/EC: RED; Directive 2009/30/EC: Fuel Quality Directive (FQD); EU Climate and Energy Package 17th December 2008; Directive Biofuels Directive 2003/30/EC: Biofuels Directive; Directive 2003/17/EC: Fuel Quality Directive; Directive 98/70/EC: Fuel Quality Directive; Directive 2003/96/EC: Energy Taxation; Common Agricultural Policy (CAP).

D. F. Kolling (*)

Crop Science Graduate Program, Santa Catarina State University,

2090 Luiz de Camoes, Lages, SC, Brazil e-mail: dfkolling@gmail. com

[11] F. Dalla Corte

Agribusiness Graduate Program, Federal University of Rio Grande do Sul, 7712 Bento Gonfalves, Porto Alegre, RS, Brazil

C. A. O. Oliveira

Agricultural and Livestock Research Foundation (Fepagro),

570 Gonfalves Dias, Porto Alegre, RS, Brazil

A. Domingos Padula et al. (eds.), Liquid Biofuels: Emergence, Development and Prospects, Lecture Notes in Energy 27, DOI: 10.1007/978-1-4471-6482-1_3, © Springer-Verlag London 2014

[12] Classic market (spot)—non-specific transaction in which there is no effort to sustain the relationship, which is the case closest to the pure competition market.

2. Hybrid forms—trust relationships can be built with higher asset specificity and higher recurrence of transactions. In this case, there are no transaction incen­tives between agents and the firm. Thus, the agents are highly motivated to ful­fill the contract.

3. Vertical integration or hierarchy—regards vertical integration necessary for sporadic transactions and in the presence of highly specific assets. In this case, the transactions between agents are incorporated into the hierarchy of the firm.

[13] Global-warming potential—An index, based upon radiative properties of well-mixed greenhouse gases, measuring the radiative forcing of a unit mass of a given well-mixed greenhouse gas in the present-day atmosphere integrated over a chosen time horizon, relative to that of carbon dioxide. The GWP represents the combined effect of the differing times these gases remain in the atmos­phere and their relative effectiveness in absorbing outgoing thermal infrared radiation. The Kyoto Protocol is based on GWPs from pulse emissions over a 100-year time frame [definition adapted from IPCC 4th Assessment Report, Working Group I, The Physical Science Basis (IPCC 2007)].

[14] The top three GHG-emitting sectors are energy (26 %), industry (19 %) and agriculture (14 %).

[15] Carbon debt is the time required to counterbalance the CO2 emissions resulting from the con­version of a native ecosystem to biomass production.

[16] These include low-till or no-till cultivation, crop rotations and other cultivation practices that need minimal inputs such as fertilizers, pesticides and herbicides.

[17] Negative values indicate a net reduction in GHGs.

[18] Bioethanol cannot, however, be shipped by existing crude oil or petroleum pipelines as it absorbs water and other impurities, all of which affects fuel purity and degrades the infrastruc­ture (Eggert et al. 2011).

[19] Sorda G, Banse M, Kemfert C (2010) An overview of biofuel policies across the world, Energy Policy, 38(11)

Production costs associated with biofuels are, in general, very high, with Brazilian bioethanol production being the exception. The gap between high costs of biofuel production and relatively low petroleum prices creates large deadweight costs that may overwhelm any external benefits. de Gorter and Just (2009a, 2010) have shown that policies favouring biofuel production, i. e. tax credits, generate what they term ‘rectangular deadweight costs’ that are much higher than those resulting from a standard analysis that estimates inefficiency costs in the form of deadweight cost tri­angles. Indeed, the deadweight cost triangles are also a component of inefficiency costs of biofuel policies. Gardner (2007), together with de Gorter and Just (2008b; 2009a), all estimated triangular deadweight costs in the United States and found them to be in the USD 300-600 million range. However, de Gorter and Just (2008b; 2009a) also found that rectangular deadweight costs resulted in an additional annual waste of over USD 2 billion. In estimating inefficiency costs in the form of dead­weight costs, we must also add the external costs of added gasoline consumption, oil dependence, increased CO2 emissions and a decline in terms of trade in oil imports. In particular, the annual deadweight costs owing to the combination of the biofuel mandate and tax credit alone are expected to be about USD 11 billion by 2022 (de Gorter and Just 2009b). As a result, biofuel policies may not generate social welfare improvement; rather, they may have adverse impacts on social welfare. They also have the potential to exacerbate negative externalities associated with gasoline con­sumption (de Gorter and Just 2008a, 2009b).

Pro-biofuel policies are generally used in various combinations, but de Gorter and Just (2010) have shown that these policies can be contradictory. At present, a quantity-based biofuel mandate (i. e. biofuel blend mandate) and a price-based consumption subsidy (i. e. biofuel tax credit) are most common (e. g. in the United States, Brazil and the EU). While a quantity-based biofuel mandate is theoreti­cally and empirically superior to a price-based consumption subsidy (Lapan and Moschini 2009; de Gorter and Just 2008b, 2009c), when mandates are used in conjunction with biofuel subsidies, they can have adverse policy interaction effects. Here, the benefits of a market-based policy like mandates can easily be nullified (de Gorter and Just 2009b, c). This is because, when a tax credit is intro­duced alongside the mandate, blenders will compete for the government sub­sidy and increase profits by lowering the retail price. Such behaviour results in an increase in the total amount of fuel consumed, which means that more petro­leum-based fuel will be consumed because of the binding mandates. Therefore, tax credits will unintentionally subsidize gasoline consumption instead. This con­tradicts the oft-stated objectives of reducing dependency on oil, improving the environment and enhancing rural prosperity. Furthermore, higher gasoline prices induced by a biofuel policy magnify the inefficiency of the preexisting wage tax by reducing real wages and thus discouraging work (Searchinger et al. 2008).

Given that pro-biofuel policies exist in a setting of multiple objectives and, at the same time, other policies targeting the same objectives also exist, policy-mak­ers should carefully evaluate the interaction between biofuel polices and other pol­icies to ensure that the stated objectives are achievable at an acceptable cost. The effects of each biofuel policy and their interaction with other policies are clearly very complex owing to the intricate interrelationships between energy and com­modity markets and the varied environmental consequences. The effects of biofuel policies become even more complicated if general equilibrium effects that seek to explain the behaviour of supply, demand and prices in a whole economy with many interacting markets are incorporated in the analysis. At present, given the high cost of biofuel production, together with the competitive pressure of com­paratively cheap oil, taxpayer costs resulting from biofuel and renewable energy policies in general are very high relative to their benefit, all of which can be highly negative owing to adverse policy interaction effects.

In sum, this chapter raises doubts about biofuels in relation to the specific objec­tives for which they have been supported. The production of biofuels that are being promoted to reduce dependence on fossil fuels actually depends on fossil fuels, and users will therefore find it difficult to escape from ongoing oil price volatility. Finally, the positive impact of biofuels on regional development, and employment in the agri­cultural sector in particular, is not immediately obvious. The frequent linking of bio­fuel policy to the goal of enhancing rural economies is questionable since the use of biofuels may result in shifts between sectors rather than the creation of new economic activity. To be precise, problems associated with biofuels have been intensified by the fact that economic issues are intricately related to biofuel policy objectives. Current biofuels in commercial production, except bioethanol produced from sugarcane in Brazil, are not yet competitive with fossil fuels. However, their competitiveness, espe­cially that of advanced biofuels using a lower cost proportion of feedstock not sensi­tive to food prices, will gradually improve as the price of oil increases.

1.1.1 Analysed Biofuels

In our study, we examined first and second generations of bioethanol and bio­diesel, hydrated vegetable oil (HVO) and BTL fuel as specific combinations of raw materials and conversion technologies (Fig. 1).

First-generation bioethanol is produced through fermentation of sugar — and starch-containing organic materials. The most common raw materials are starch — containing plants. In Europe and North America that is wheat or corn; in Brazil, it is sugar cane. While sugar-containing plants can be fermented directly, starch needs to be hydrolysed to sugars through specific enzymes. During fermentation, microorganisms, such as yeast, metabolise sugars to ethanol. Second-generation biofuels are made of the non-edible part of the plant which remains on the field

after the crops have been harvested (e. g. com stover). If this lignocellulosic material could also be utilised, bioethanol production could be increased signifi­cantly. Because the conversion of lignocellulose to ethanol is more complex than that of sugar and starch, to date no large-scale production of second-generation bioethanol exists. However, Kim and Dale (2004) estimate that lignocellulosic bio­mass offers potential for the production of 442 billion litres of bioethanol per year.

Biodiesel is produced from plant oils or animal fats and transesterification with methanol. The most commonly used raw material is rapeseed, which has an oil content of 40-45 %. However, biodiesel has major disadvantages. It has the poten­tial to clog filters inside the tank and to cause leaks, because it acts aggressively against some rubbers and plastic. Thus, rubber parts in the fuel system may cor­rode over time. Explain that most diesel cars have been licensed to use biodiesel blends of up to 5 %. However, the conversion of a conventional diesel engine for pure biodiesel is associated with significant costs. In Germany, for example, com­panies offer a conversion service for roughly Euro 1,500 per engine. In addition, engine oil changes need to be done more often.

Just like biodiesel, HVO can be produced from oil-containing raw materials. Hydrotreating of vegetable oils or animal fats is an alternative process to esteri­fication for producing bio-based diesel fuels (Mikkonen 2008; Hodge 2008). In the HVO production process, hydrogen is used to remove the oxygen from the tri­glyceride (vegetable oil) and integration to an existing oil refinery is preferred for small plants. In 2007, the first HVO plant at commercial levels started operations in Finland. It has the capacity to produce 170,000 tonnes of HVO per year. Today, oil companies and process technology suppliers across the globe are constructing numerous plants with scales of up to 800,000 tonnes per year per unit.

The BTL production process consists of a number of different process steps. A low-temperature gasifier breaks down biomass to coke — and a gas-containing tar. In a gasification reactor, a tar-free synthesis gas is produced and liquefied to fuel through a Fischer-Tropsch reaction thereafter. Depending on the octane number, BTL fuels can be used in conventional petrol — or diesel-powered cars. A modifica­tion of the engine is not necessary. The existing filling station infrastructure can be used without further investments. Fischer-Tropsch plants for the production of BTL fuels from biomass, such as wood and residues, are estimated to reach com­mercial scale in the next decade.

The first step in our analysis is the projection of future production scales for each type of biofuel, as a technology’s maturity has a decisive impact on produc­tion costs and some technologies are not expected to leave pilot or demonstration scale in the near future. We have defined comparable reference scenarios related to biofuel production for the years 2015 (scenario 2015) and 2020 (scenario 2020) based on the maturity of each biofuel technology (Fig. 2). In each scenario, we take the technology’s maturity status (pilot scale, demonstration scale or produc­tion scale) into account. Therefore, we assume that more mature technologies have larger scales than technologies which are in the process of being developed. This in return means that the use of more mature technologies offers significant cost advantages.

Many assessments of the ability of biofuels to displace carbon-intensive fossil fuels do not take into account the effects of land-use change when the cultivation of the biomass replaces the cultivation of other crops that are then grown else­where on land with high carbon stocks, such as in cleared rainforest areas. More importantly, when the demand for the original crop remains the same, the transfer of cropland from edible to non-edible crops will only result in a displacement of carbon from one location to the other. This outcome, as Eisentraut (2010, p. 9) points out, “can also have a severe impact on biodiversity if valuable ecosystems are destroyed to grow the replaced crops”.

With a growing demand for biofuels, areas of natural vegetation, with huge amounts of embedded carbon, both in living tissue and in the soil below, could increasingly be cleared to make way for crops destined to be used in biofuel pro­duction. In fact, available land will be the most significant consideration limiting global penetration of biofuels (Larson 2008). Land-use efficiency is therefore a crucial consideration in selecting the type of feedstock to be cultivated. In most cases, the conversion of areas of native vegetation to biomass plantations would bring about the establishment of vast monocultures that would not sustain dis­placed fauna, particularly given that organisms other than those destined for cul­tivation would be controlled, and indeed destroyed in most cases. These processes could potentially hasten the demise of indigenous species in the area where non­native species have been planted for biomass cultivation (Eisentraut 2010). For example, following the invasive behaviour of Jatropha in Australia, the South African government banned Jatropha cultivation (Gasparatos et al. 2012). Other African nations, however, have not imposed any restriction on this crop, probably on account of its potential to boost economic growth (Arndt et al. 2010). It is well recognized that terrestrial biodiversity is contingent upon the continued existence of requisite amounts of unspoilt land. In more or less untouched environments, a wide variety of life is able to exist. A prime example of the threat posed by mono­cultures is provided by the orangutan, whose existence is being threatened by the growing global demand (particularly in Europe) for palm kernel oil (PPK), an edi­ble oil used for biodiesel production, among a wide variety of commercial uses. Aside from having their natural habitat destroyed, farmers in Southeast Asia also kill these animals because they eat the young shoots of oil palm trees (Brown and Jacobson 2005).

Some authors, such as Moreira and Goldemberg (1999), have argued that bioethanol, and presumably biodiesel by extension, is more effective from a CO2 mitigation and abatement perspective than the preservation of primeval forests. As Charles et al. (2007) have pointed out, this logic is highly mono-dimensional, since widespread deforestation would lead to the loss of innumerable species, many not yet described in the scientific literature, and which could have signifi­cant benefits to humanity. Although increased biofuel use could assist with reduc­ing GHG emissions, this clearly should not compromise the planet’s biodiversity, the preservation of which should be of paramount importance from an ecological perspective. The good news is that second-generation lignocellulosic production processes should be able to cope more effectively with (1) mixed-source timber sourced from forest plantations or (2) residue such as bark and sawdust from timber milling operations that process a variety of species (Stephen et al. 2011). These plantations, though not perfect from a biodiversity perspective, at least offer a more varied environment for other life. Keeney and Nanninga (2008, p. 3) con­tend that a mix of perennial grasses and shrubs, with typically large root systems, is a better choice than a monoculture of biofuel crops, as they “stabilize the soils, sequester carbon, regulate water run-off, attract wildlife and support biodiversity”.

Deforestation for the purposes of making more arable land available for bio­mass cultivation could also result in localized climate change, aside from the release of significant amounts of embedded carbon as a result of burn-offs and grubbing up the soil (Rees et al. 2005). Throughout the world, tropical rainfor­ests have been cleared extensively to make land available for biomass cultiva­tion. In particular, deforestation has been linked to decreasing local rainfall levels (Pimental et al. 2002; Schneider et al. 2000). This could also impact, by way of extension, on the suitability of the area for biomass cultivation, or at least the growing of certain types of crops, thereby doubling the negative effects of the land-use change (Charles et al. 2009). Indeed, these factors, as Firbank (2005) has argued, will make it extremely difficult to plan for future land usage.

Another potential impact of land-use change is erosion. If native vegetation is replaced by annual crops, such as those used for first-generation biofuels, a lack of cover as the plants grow can result in significant soil loss as a result of wind or water erosion, or potentially both (Lubowski et al. 2006). In some cases, this lack of cover enhances the potential of run-off contributing to flooding, with disastrous effect on local communities downstream. Furthermore, the very preparation of the soil itself before planting can expose it to erosion (Huggins and Reganold 2008). It is fortunate that the optimum biomass for second-generation processes, which will hopefully supplant a good deal of first-generation production, are perennial species. Such plants provide greater cover, protection against wind and water ero­sion, and increase the soil’s water-retention capacity (Eisentraut 2010). Their use also has the positive effect of increasing the carbon stock of the soil through the presence of roots and humus (Eisentraut 2010), though the release of existing soil carbon for the planting of these biofuel crops should not be discounted.

In effect, demand for biofuel in the developed world could result in developed nations exporting local environmental degradation to the developing world, more so since these areas may be subject to less stringent environmental management and ecological governance. One needs to bear in mind that roughly 40 % of biofu­els are already being produced in emerging and developing economies (Eisentraut 2010), with that percentage likely to increase markedly. Effective environmental management is probably not regarded as a luxury that some nations can afford, however irrational that logic may be from a long-term sustainability perspective. This environmental degradation could also lead to opportunity costs resulting from a loss of potential eco-tourism income. It follows that, if developing countries focus more on biomass export than biofuel production per se, it is important that the feedstocks exported be as energy dense as possible so as to maximize effi­ciency in light of the potentially negative effects signalled above, more so since the long-distance transport of biomass also has a considerable environmental impact (Eisentraut 2010).

The common techniques for oil extraction are mechanical pressing, the usage solvents, and supercritical fluid extraction. Each of these different methods pre­sents its own advantages and disadvantages. The first oil extraction method can be divided into expression and ultrasonic-assisted extraction and the efficiency nor­mally ranges from 70 to 75 % (Rengel 2008). The main drawback of this method is that it generally requires drying the algae beforehand, which is an energy intensive step.

Using solvents such as n-hexane, benzene, ethanol, chloroform, and diethyl ether can efficiently extract the fatty acids from algae cells. However, the use of chemi­cals in the process could present environmental, safety, and health issues. In many cases, manufacturers of algae oil use a combination of mechanical pressing and chemical solvents in extracting oil to improve efficiency (around 95 %).

Supercritical extraction requires high-pressure equipment that is both expensive and energy intensive. In this process, carbon dioxide is heated and compressed until it reaches a liquid-gas state. Then, it is applied to the harvested algae and acts like a solvent (Mendes et al. 1995; Ferreira et al. 2013).

Apart from these, there are some other more expensive and less known and uti­lized methods which are enzymatic extraction that uses enzymes to degrade the cell walls with water acting as the solvent; and osmotic shock is a sudden reduc­tion in osmotic pressure that can cause cells in a solution to rupture.

Once the oil is extracted through these methods, it is referred to as “green crude.” However, it is not ready to be used as biofuel until it undergoes a process called transesterification. This step is a chemical reaction in which triglycerides of the oil react with methanol or ethanol to produce (m)ethyl esters and glycerol (Rengel 2008). This reaction creates a mix of biodiesel and glycerol that is further processed to be separated and leaves ready to use biodiesel.

Direct conversions from a non-dry state are being studied and some pos­sibilities that may play an important role in offsetting the costs and improve oil extraction efficiency are arising. Among these, it is important to highlight in situ transesterification and hydrothermal liquefaction (Chen et al. 2009; Patil et al. 2008) Nevertheless, due to limited-level information in these processes for algae, more research in these areas is still needed.

Meanwhile, a lot of work is being made to reduce energy input and costs of extraction processes. Many industries claim they have come up with cost-effective methods in this area; however, until large-scale facilities are deployed, it is hard to tell which one will work in a large-scale basis.

The whole algae, bio oil, or the residues from oil extraction are excellent feed­stock for making other fuels and products via different processes. Some of these products will be presented in the next chapter.