Similar to second-generation biofuels, so-called third-generation biofuels are pro­duced from non-edible specially engineered low-cost, high-energy and entirely renewable crops such as algae (Chris ti 2007). These are capable of generating more energy per acre than conventional crops and can also be grown on land and in water that is not suitable for food production. Fourth-generation biofuels use genetically modified crops (Table 2). The conversion process in this case is similar to that employed for second — and third-generation biofuels, but involves an addi­tional step where the carbon content in the fuel is oxidized by processes such as oxy-fuel combustion (Gray et al. 2007). The CO2 released is then absorbed and stored in oil and gas fields or saline aquifers (ZEP-EBTP 2012).

A distinction often used in favour of third — and fourth-generation biofuels is that they are produced from carbon neutral or negative biomass. However, as Centi et al. (2012) note, this has not yet been proved empirically, while Gasparatos et al.

(2012) point out that the technologies involved are still in their infancy. In the light of these uncertainties, this chapter focusses on first — and second-generation biofu­els, more so given that many environmental aspects of third — and fourth-generation biofuels hold true for second-generation fuels.

1.1 Bacteria

The synthesis of intracellular lipids in oleaginous bacteria occurs during the log­arithmic phase and the beginning of the stationary growth phase (Gouda et al. 2008). However, only few species of bacteria can accumulate lipids suitable for biodiesel, as they mainly accumulate polyhydroxy alkanoates (PHA) and poly­hydroxy butyrate (PHB) (Kosa and Ragauskas 2011; Shi et al. 2011). The spe­cies that produce a large amount of lipids are those belonging to Streptomyces, Nocardia, Rhodococcus, and Mycobacterium (Alvarez and Steinbuchel 2002). The amount of triglycerides (TAG) and fatty acid composition differs depending on the species used for fermentation (Table 5). Gouda et al. (2008) tested Rhodococcus opacus and Gordonia sp. using different agroindustrial wastes (molasses, potato infusion, wheat bran, hydrolyzed barley, orange waste, tomato peel waste, arti­choke waste, and Na-gluconate) as carbon sources. Molasses provided the high­est percentage of lipid in cell, 93 and 96 % for R. opacus and Gordonia sp.,

respectively, while carob waste offered the best source for TAG accumulation, being 88.9 and 57.8 mg per liter of medium for R. opacus and Gordonia sp., respectively, and C17:1 the main fatty acid produced (20.7 %) by R. opaccus. When Gordonia sp. consumed molasses, they followed the same trend in terms of the accumulation of lipid in cell mass (96 %). However, the highest accumulation of TAG (57.8 mg/L) was achieved when orange waste was consumed, being C22:0 the predominant fatty acid, in a percentage close to 35 %. Two different strains of bacterium R. opacus, DSM 1069 and PD630, were inoculated in lignocellulosic compounds (4-hydroxybenzoic and vanillic acids) (Kosa and Ragauskas 2012). The experiments showed that both strains can consume these carbon sources and accumulate lipids close to 20 % of their own weight.

With regard to bacterial biodiesel properties and subsequent engine testing, only one analysis has been reported (Wahlen et al. 2012). In this study, the bacte­rium R. opacus was grown in sucrose and biodiesel properties were compared with those from microalgae and yeast oil-based biodiesel. Biodiesel bacterial molecu­lar properties differ considerably with the other biofuels in terms of carbon chain length. The physical properties were similar to other microbial biodiesel, with the exception of the heating value that was lower. When bacterial biodiesel was ran on a diesel engine, it provided the lowest power output, while NOx and HC emissions were higher and lower than other microbial biodiesel, respectively.

Bacteria that accumulate the highest proportion of triglycerides are providing neither sufficient oil yield under industrial conditions nor an economically sound process. For these reasons, genetic engineering is supporting this biotechnology to be considered a viable alternative for the biodiesel industry. Rucker et al. (2013) demonstrated the feasibility of the lipid metabolism of E. coli for TAG accumu­lation, but the yield achieved was below the threshold to be considered a viable source for biodiesel production. Authors propose two metabolic engineering steps, to increase either the supply of phosphatidic acid during late exponential and sta­tionary phase growth or the supply of acyl-CoA.

One of the most interesting uses of bacteria in the production of biodiesel was described by Kalscheuer et al. (2006). In this study, the genetically modified bac­teria E. coli was recombined with two different enzymes from Zymomonas mobilis and Acinetobacter baylyi. The target was to produce fatty acid ethyl esters (FAEE) in vivo, called “microdiesel.” Under fed-batch fermentation using renewable car­bon sources, they achieved a FAEE concentration of 1.28 g L-1, corresponding to a FAEE content of the cells of 26 % of the cellular dry mass. Gordonia sp. KTR9 may be considered among the suitable bacteria for in vivo synthesis of fatty acid ethyl esters from short-chain alcohols. This species has a large num­ber of genes dedicated to both the formation of fatty acids and lipid biosynthesis. Furthermore, it tolerates the addition of more than 4 % methanol, 4 % ethanol, and 2 % propanol in the medium (Eberly et al. 2013).

It may be concluded from above works that biodiesel produced from bacterial oil can be considered as an alternative to first — and second-generation biodiesel. However, more research is needed to both improve bacterial oil yield and provide economically viable substrates.

D. E. Leiva-Candia and M. P. Dorado

The logistics of Brazilian ethanol is poor. Most of the distribution for the domes­tic market is carried out by road transportation, which is not in good condition in some main key perimeters. For the overseas market, ethanol uses road transport associated to the duct mode, which connects the mills to the harbors. Although they are more efficient than road transport for long distances, the rail and water­ways are still little used for both the domestic market and to the external market (Milanez et al. 2010).

‘The costs of cutting, loading, and transporting account for 30 % of the total cost of production of sugarcane, and only the transport costs are equivalent to 12 % of that total’ (EMBRAPA 2013:1). The average cost of road freight for ethanol in Brazil was R$ 0.1557/m3/km in 2010, ranging between R$ 0.0568/m3/ km and R$ 0.9588/m3/Km (SIFRECA 2011). Therefore, efficient logistic system would result in lower production costs, providing Brazil more competitiveness both in the domestic as in the international market.

Milanez et al. (2010) argue that the logistics of the Brazilian ethanol prevents the supply in some states, especially in northern Brazil due to the lack of efficient infrastructure. Furthermore, most of the infrastructure associated with the trans­port of ethanol is in the Central-South region of the country, mainly in Sao Paulo.

Figure 3 shows the main transport corridors of sugar and ethanol in Brazil. It can be observed that the concentration of the infrastructure is in the state of Sao Paulo and adjacent areas, while the surrounding areas (including those not shown in the figure) have lower modal infrastructure, imposing additional difficulty in the product process of distribution.

The insufficient offer of more efficient transportation modes lead to road trans­port, in which ethanol is transported in fuel tank trucks similar to the way gasoline and diesel are transported. Other modes also lack expansion and modernization,

such as the rail systems, which are not usually used due to ‘the lack of tank wagons, the locomotive enhanced traction capacity, and the low capacity of the railways because of poor maintenance […]’ among other factors (Milanez et al. 2010:69). Moreover, according to the authors, the waterway mode is also not via­ble to transport this fuel since they are mostly in the Amazon Basin, which has no interconnection link to the Central-South modes.

Ducts are not feasible to transport ethanol, mainly due to the high invest­ment and low availability of infrastructure, but this reality might be changed with the completion of ducts that will connect the Midwest region to Santos-SP and Paranagua-PR harbors, crossing some of the largest consumer centers in Brazil, where they can interact with other modes, allowing the distribution to other regions (Milanez et al. 2010).

Alternative fuels are becoming increasingly attractive. The reason for this devel­opment is simple. While crude oil demand is continuously on the rise, the cor­responding increase in supply is lagging, thus driving crude oil prices. The independence of alternative fuels from finite raw materials for fossil fuels has encouraged politicians to incentivise the production of biofuels. However, current tax advantages are only temporary. So, in order for biofuels to gain market share, it is essential that production costs reach competitive levels in the future.

The Brazilian government has started several national programmes to enhance its technical, economic and environmental competitiveness of biodiesel produc­tion in relation to fossil fuel since 2002. To date, Brazil has achieved consider­able progress, especially due to its wealth in required raw materials (Ramos and Wilhelm 2005; Nass et al. 2007). However, with regard to Brazilian bioethanol, an import tariff of US$ Cent 54 per gallon (de Gorter and Just 2009), which had been established due to economic and environmental reasons, impeded market access in the USA until 2012. The fact that import tariffs are a decisive factor for market acceptance of Brazilian biofuels becomes clear when production costs are considered. In 2009, biodiesel production costs stood at approximately US$ Cent 34 per litre. Estimates then saw the potential of production costs some­where in between US$ Cent 20 per litre and US$ Cent 26 per litre (van den Wall Bake et al. 2009).

In the EU, biofuel demand and biofuel production were stimulated through pol­icies on national and international levels. However, with regard to first-generation biofuels, the EU faces one very difficult issue. EU countries are unable to pro­duce sufficient amounts of biofuel feedstock domestically in order to fulfil these policies. This forces the countries (and therefore the EU) to import biofuel crops, which, in return, results in higher agricultural trade deficits. Furthermore, this leads to an increased production of biofuel crops in countries with a comparative advantage, e. g. South and central American countries such as Brazil (Banse et al. 2011).

2 Conclusions

As mentioned earlier in the chapter, the decisive factor for a biofuel’s market suc­cess is the fuel price which can compete with that of fossil fuels. Therefore, it is necessary that biofuels can be produced at competitive costs, which was the main focus for our comparative analysis. In order to compare production costs for dif­ferent types of biofuels, we extrapolated publicly available, historical market prices for raw materials in the course of crude oil reference scenarios. We incor­porated scale and learning effects into our model in order to compare and identify economically promising biofuel technologies. In other words, our approach ena­bles the comparison of different biofuels’ production costs while considering the specific development state and economies of scale in context of realistic scenarios for the market prices for biomass.

Plausibility checks based on current data as well as consistency of the results across production technologies enhanced the accuracy of the results. At the same time, we assessed the comparability of data and performed corresponding adjust­ments, if necessary.

This chapter focused on three major goals: (1) a projection of future feedstock prices for biofuels based on the development of the price for crude oil, (2) a simu­lation of the effects of likely economies of scale from scaling-up production size and technological learning on production costs and (3) a scenario analysis compar­ing different biofuels and fossil fuel.

Our study demonstrated that modelling biofuel production costs based on three standardised production process steps is possible and enables a better understand­ing of cost competitiveness. As the most important model parameter, besides the crude oil price, the price development of the underlying biomass raw materials can be endogenously projected by their correlation with the price for crude oil.

One can conclude that in general feedstock for first-generation biofuels is expensive and that these are produced with optimised technologies. Second — generation biofuels, on the contrary, have relatively lower raw material costs while demonstrating an increasing efficiency in the conversion processes.

In the short and medium term, when production costs are compared, second — generation biodiesel from waste oil and from palm oil are the most promising alternatives to fossil fuels. For the 2015 crude oil scenario of 200 Euro/barrel, only these two types of biodiesel are likely to be produced at competitive costs.

Except for biodiesel from palm oil, all first-generation biofuels’ production costs exceed those of fossil fuels. This in return leads to a poor financial perfor­mance. If increasing feedstock costs were also to be taken into account, the gap to economic viability becomes even wider. As cost-saving potentials from production scale have already been fully exploited, any potential competitive improvements of first-generation biofuels are due to experience-driven learning effects.

On the contrary, second-generation bioethanol and second-generation biodiesel, in particular, are the more attractive alternatives to conventional fuel. Mid — to long­term economies of scale and learning curve effects will positively impact their production costs. Furthermore, these types of biofuel will be largely unaffected from the development of crude oil prices and therefore possess the ability to be produced competitively. In other words, second-generation biofuels seem to be the only real long-term option in order to replace fossil fuels.

As mentioned above, there are four main types of biomass used for liquid biofuels production: oleaginous (triglyceride source), sugary (sucrose to convert into a glu­cose source), starchy (natural polymer to convert into a glucose source), and cellu — losic (a natural polymer converted into a glucose source). Due to the varying nature of these materials and the processes for converting them to different liquid fuels, they all require different analytical profiles and techniques, each one is considered individually below.

1.1 Oleaginous Biomass

The oleaginous biomass has high contents of triglycerides or lipids, esters derived from glycerol and three fatty acids, within their seeds or grains (Fig. 1). Some free fatty acids may also be present. The chemical composition of the fatty acids within the triglycerides can vary, both with respect to the length of the alkyl chains and the degree of unsaturation depending on the biomass sources (Table 1). This composi­tion can also vary due to soil type, tillage, and climate conditions. The free fatty acids and triglycerides are converted to biodiesel by means of a transesterification reac­tion in the presence of a basic or acidic catalyst and an alcohol (Oh et al. 2012). The chemical composition of the oil along with the free fatty acid content affects both the

transesterification process and the properties of the biodiesel formed, and therefore, analysis of these properties are vital for different oleaginous biomass sources.

Triglycerides can represent 10-25 % m/m in vegetable oils (Gunstone 2004). Table 2 shows values of physicochemical properties from some agricultural species used for biodiesel production.

Some methylic and ethylic esters, observed in biodiesel after transesterification process, are as follows:

• Laurate, derived from lauric acid, C12:0, from palm oil;

• Myristate, derived from myristic acid, C16:0, from tallow;

• Palmitate, derived from palmitic acid, C16:0, cottonseed and palm oils;

• Estereate, derived from estearic acid, C18:0, from tallow;

• Linoleate, derived from linoleic acid, C18:2, C18:2, from cottonseed oil.

HO

Fig. 2 Chemical structure of sucrose, a disaccharide present in sugarcane (author). The D-glucose moiety is on the left, and the D-fructose moiety is on the right linked by a-|3-D-disac — charide bonds. Author Sflvio Vaz Jr

After the process of extracting the oil from algae, the resulting product can be converted to biodiesel. The biodiesel produced from algal oil has physical and chemical properties similar to diesel from petroleum, to biodiesel produced from crops of first generation and compares favorably with the International Biodiesel Standard for Vehicles (EN14214) (Brennan and Owende 2010).

Contrasting to other sources of feedstock to produce biofuels, algae-based bio­fuels present several advantages. These advantages comprise:

1. Capability of producing oil during all year long; therefore, the oil productivity of microalgae is greater compared to the most efficient crops;

2. Producing in blackish water and on not arable land (Searchinger et al. 2008); not affecting food supply or the use of soil for other purposes (Chisti 2007);

3. Possessing a fast-growing potential and several species has 20-50 % of oil con­tent by weight of dry biomass (Chisti 2007);

4. Regarding air quality, production of microalgae biomass can fix carbon dioxide (1 kg of algal biomass fixes roughly 183 kg of CO2) (Chisti 2007);

5. Nutrients for its cultivation (mainly nitrogen and phosphorous) can be obtained from sewage; therefore, there is a possibility to assist the municipal wastewater treatment (Cantrell et al. 2008);

6. Growing algae do not require the use of herbicides or pesticides (Rodolfi et al. 2008);

7. Algae can also produce valuable coproducts, such as proteins and biomass; after oil extraction, the coproducts can be used as animal feed, medicines, or fertilizers (Spolaore et al. 2006; Brennan and Owende 2010), or fermented to produce ethanol or methane (Hirano et al. 1997);

8. Biochemical composition of algal biomass can be modulated by different growth conditions, so the oil yield can be significantly improved (Qin 2005); and

9. Capability of performing the photobiological production of “biohydrogen” (Ghirardi et al. 2000; Ferreira et al. 2013).

The above combination of the potential for biofuel production, CO2 fixation, wastewater treatment, and the possibility of production of biohydrogen highlights the potential applications of the microalgae cultivation.

Compared to other biofuel technologies, the most favorable factors for the culti­vation of microalgae for the production of biofuels are they can be grown in brack­ish (salt) water, on non-fertile land, and the oil yield production is far superior.

There are essentially two types of liquid biofuels: alcohols (ethanol and butanol) and diesel substitutes (such as biodiesel and hydro-treated vegetable oils). Figure 1 highlights the evolution of ethanol and biodiesel production around the world.

The production of these biofuels has intensified since 2000. Ethanol is more representative when one considers the produced volume. In 2012, the volume of ethanol produced was approximately four times larger than the production of biodiesel.

Table 1 shows the total production of ethanol and biodiesel both in the world and in ten leading countries. Dividing the production by countries, note the

lllllllllllll

1991 1992 1993 1994 1995 1996 199? 1992 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

■ Biodiesel ■ Ethanol

Fig. 1 The world’s production of Liquid biofuel (in millions of gallons). Source Compiled by the Earth Policy Institute from Licht ( 24 April 2012)

representativeness of the USA, which leads the production of ethanol and biodiesel. Indeed, Brazil and the USA accounted for more than 87 % of the worldwide produc­tion of ethanol in 2011. In addition, even though the world’s biodiesel production is less concentrated than is the case with ethanol, Brazil and the USA are among the largest producers.

Regarding the global market for ethanol, biodiesel, and biofuels, data about the consumption, production, imports, and exports in 2013 and projected numbers for 2020 in leading countries are presented below.

Marta Wlodarz and Bruce A. McCarl

Abstract Today, many countries are increasing the biofuel share in national energy supply, mainly to strengthen their domestic energy security and to protect against sudden oil price hikes. Some biofuels also provide greenhouse gas emis­sion offsets, becoming a part of climate change mitigation framework. Second- generation liquid biofuels (e. g., lignocellulosic ethanol, algae fuel, biomethanol) are under ongoing research effort investigating conversion technologies and eco­nomic feasibility. In this chapter, we will concentrate on the economic prospects of bioethanol production from lignocellulosic materials in the USA in terms of their cost-efficiency and profitability, and implications for global commodity markets. Moreover, we will analyze the emergence of drop-in fuels (e. g., fuels that can be used in existing infrastructure) and the relative difference this makes in the poten­tial for future market penetration.

Biochemical conversion route makes use of biological/chemical agents, like microorganisms and enzymes, to break down the complex structure of the ligno — cellulose into its base polymers and further degrading them into sugar monomers (mainly glucose and xylose) (Pandey 2009). These sugar monomers can be sub­jected to microbial fermentation to produce bioalcohols (ethanol and butanol). The feedstocks that can be deconstructed using bioagents are mainly agricultural and for­est residues; however, they may also include industrial and municipal solid wastes.

The biochemical route mainly consists of four basic components: (1) feedstock pulverization, (2) pretreatment, (3) enzymatic hydrolysis, and (4) fermentation (Fig. 3). The complete process also includes feedstock harvesting, handling, recovery, and transportation; fractionation of the polymers; lignin separation; and recovery of end products (IEA 2008). The energy yield of liquid biofuels could be in the range of 2.3-5.7 GJ/tonnes of feedstock, considering 20 GJ/dry tonne of lignocellulose. The maximum energy efficiency that can be achieved is 35 % in the laboratory conditions;

however, under industrial conditions, it is yet to be known (Sims et al. 2010). As stated in the section above, other processes could be integrated such as combustion of lignin or conversion of some carbohydrates into other products of high value.

The downstream-processing step generates substantial amount of CO2, waste­water, and solid waste-containing lignin, residual carbohydrates, proteins, and cell mass. This represents about 1/3rd of the initial raw material (dry-weight basis) and can generate substantial heat and electricity upon combustion, thereby improving the overall process efficiency. The biochemical route seems to be quite promis­ing owing to its low-temperature requirements, cogeneration of heat and electricity from lignin combustion, and lower GHG emissions. At the moment, it is difficult to realize the full potential of biochemical route due to lack of data on its perfor­mance at demonstration or commercial scale units.

Data on surface area and porosity are presented in Table 1. It is clear that the HZSM-5 zeolite possessed typical textural properties of microporous materials. The pore volume and size of the catalyst HZSM-5(14) were almost half as com­pared to those of HZSM-5 (80). This showed that a reduction in the aluminum content of the HZSM-5 catalyst affected the material by increasing the poros­ity while simultaneously reduced the total surface area. However, in the case of SBA-15 catalyst (AlSBA-15), significantly larger surface area than HZSM-5 was observed. This confirmed the mesoporous nature of AlSBA-15 that exhibited wider mesopores as suggested by data in Table 1. These findings were in accord­ance with those reported by Kilos et al. (2005) who also observed the mesoporous nature of aluminum-functionalized SBA-15 catalyst.