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

Abstract The biodiesel industry is gaining interest in the past years due to the depletion of the easily extracted petroleum, the increasing demand to the automotive market, and the environmental damage. It is acknowledged that the main obstacle to biodiesel marketing is the cost of production, which is mostly due to the price of the raw material (usually vegetable oils). In this way, the goal is to provide low-cost raw materials. This may be achieved by feedstocks that do not require arable land, do not depend on growing seasons, and that give added value to waste, helping also to its recycling. In this way, oleaginous organisms may be considered an alternative feedstock for the biodiesel industry, as they meet all the previous requirements. This chapter presents the state of the art and the main characteristics of the oil and bio­diesel provided by macroorganism (insects) and microorganism (bacteria, filamen­tous fungi, and yeasts).

1 Introduction

It is worldwide accepted that biodiesel is an attractive alternative to fossil diesel fuel in terms of exhaust emissions besides its renewable nature (Demirbas 2009). However, the market inclusion of first-generation biodiesel is controversial due to the “food versus fuel” discussion (Pinzi et al. 2009). Moreover, it is not economi­cally viable in the absence of both tax exemption and high petroleum-derived

D. E. Leiva-Candia • M. P. Dorado (H)

Department of Physical Chemistry and Applied Thermodynamics, University of Cordoba, Cordoba, Spain e-mail: pilar. dorado@uco. es

D. E. Leiva-Candia e-mail: z82lecad@uco. es

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_11, © Springer-Verlag London 2014

fuel prices (Janda et al. 2012), as a result of the high cost of the raw materials (60-75 % of the total cost of biodiesel) (Dorado et al. 2006; Gui et al. 2008). In this sense, research is focused on new renewable non-edible low-cost raw materi­als that do not need arable land. Second-generation biodiesel, mainly constituted by non-edible oil, waste oil, and animal fat-based biodiesel, partially complies with the above requirements, as in some cases, it requires land to produce the raw materi­als. Third-generation biodiesel uses non-edible oleaginous alternative sources fully independent of climate or availability of land. Among the possibilities, there is a novel source of raw materials composed by macro — and microorganisms that are able to produce oil.

In the category of macroorganisms, insects show a great potential in terms of fat accumulation, in some cases above 25-30 %, especially during the immature stages (larva, pupa, and nymph) (Manzano-Agugliaro et al. 2012). The fat contents of oleaginous insects vary according to the species and location, being Coleoptera and Lepidoptera species the ones that provide the highest amount of fat (Ramos — Elorduy 2008). Insects have shown a high potential to replace oleaginous seeds as raw material for biodiesel production, due to their high food efficiency, high repro­duction rate, and short life cycle (Li et al. 2012). Furthermore, biodiesel derived from insect oil fulfills both ASTM D6751 and EN 14214 standards (Leung et al. 2012; Li et al. 2012).

Microbial oil or single-cell oil proceeds from different oleaginous microorgan­isms, i. e., bacteria, fungi, and microalgae (Li et al. 2008). These microorganisms are able to accumulate intracellular lipids above 20 % of their dry cell weight. Besides, they do not require arable land and allow the recycling of residual bio­mass, as it can be used as a carbon source (Azocar et al. 2010). The accumu­lation of lipids depends on the kind of microorganism, culture conditions, and the relation C/N, as under nitrogen limitation, the accumulation of oil increases. The oleaginous microorganisms are able to consume a variety of carbon sub­strates following different metabolic pathways (Xu et al. 2013). Currently, tech­nologies for the production of microbial oil are still in pilot scale, i. e., Nestea Oil Company uses waste as medium and expects commercial production after 2015 (Neste oil 2012).

The potential use of microbial oil as a feedstock for the biodiesel industry is surrounded by a great expectation, as oleaginous microorganisms can be grown in conventional microbial bioreactors, improving the biomass yield and reduc­ing the cost of produced biomass and oil (Vicente et al. 2009). For the reasons mentioned above, this chapter includes the main characteristics and properties of microbial oil, with special focus on the use of waste as substrate and the sub­sequent biodiesel. Microalgae have been removed from this chapter as the sole explanation of the cultivation technology requires a fully dedicated chapter.

1.1 Ethanol Policy Scenario

With the growing concern around climate and environment, the viable alternatives to replace fossil fuels with biofuels provided Brazil the possibility of an array of interests among the agents involved in the ethanol production chain. This arrange­ment allowed the creation of the National Alcohol Program (PROALCOOL) in 1975, in which the main objective was to leverage the Brazilian ethanol produc­tion through incentives and subsidies. It is pointed out that, even after the discon­tinuation of the Program in the early 1990s, it has continued acting in institutional arrangements formed with its creation allowing expansion of ethanol production (Shikida and Perosa 2012).

The Brazilian government started subsidizing ethanol production with the beginning of PROALCOOL, and even at the end of this program, the subsidies are indirectly maintained by the Federal Law 8723/1993, which enforce the 20-25 % proportion of ethanol in gasoline. However, there are no subsides of gasoline in the strict sense. There are cross-subsidies between petroleum derivatives such as variation in the tax burden of the ethanol and control of prices of petroleum products (because this prices affect transportation) due to anti-inflationary policy. Indirectly, the variation in the percentage of ethanol in gasoline can also encourage or discourage the gasoline consumption. The international sugar and oil prices also affect ethanol consumption. According to the Sugarcane Industry Union (UNICA) (2011: 11), ‘gasoline pricing remains artificial, with cross-subsidies between petroleum derivatives. In addition to causing problems to the industrial sector, this also distorts the market where hydrous ethanol competes directly with gasoline.’

In the last decade, the alcohol sector began a new phase of expansion with the permission of the European Union to import Brazilian sugar. However, the increase in exportation of sugar caused an increase in ethanol’s price and a decrease in its consumption, since both use the same raw material. Another fact is the appearance of flex-fuel cars in Brazil, which allows the use of any combination of ethanol and gasoline on the same engine.

In recent years, the decrease in sugar prices in the international market has reduced the stimulus for expansion of this sector. The price control policy adopted by the Brazilian government, which is stimulated by the lobbying of the alcohol sector, has raised the interference in the ethanol market. In addition to offering low interest loans to sugarcane production, the percentage of ethanol in the gasoline was increased and it promoted greater tax relief in the sector.

In our model, feedstock prices are exogenous variables and therefore independ­ent from production scale. This assumption is based on the fact that transportation costs are the main driver for raw material prices and the costs per unit increase with the scale of a plant as transport routes become longer. The rationale behind this assumption is that each company aims to operate at the optimal production scale in the light of (a) the tension between scale benefits and (b) increasing cost of capital associated with transportation costs. Cost advantages driven by learning

and scale are significant endogenous parameters and therefore main determinants in our calculation model.

For each type of biofuel, we assume learning-based cost-reduction potentials which diminish over time applied to all process steps as defined in Fig. 3. In regard to second-generation biofuels, we estimate learning curve effects of 40, 30 and 20 % for the corresponding time frames 2005-2010, 2010-2015 and 2015-2020. This in return leads to progress coefficients of 60, 70 and 80 %, respectively. For first-generation bioethanol, progress coefficients of 70, 80 and 85 % were estimated. In autoregressive time series models, these progress coefficients are sequentially multiplied with previous values to derive operational and total production costs for specific points in time. Based on our scale size estimates for the different types of biofuel (see Fig. 2), scale effects were incorporated into biofuel conversion costs depending on the output of biofuel product (10, 50, 100, 250 and 250 kilotonnes per year). Table 4 is one example for the application of our assumptions in order to calculate conversion costs. It represents the results for first-generation bioethanol.

1.1.2 Total Production Costs

Depending on the type of raw material, different numbers of litres of biofuel can be produced from one tonne of feedstock. A conversion factor was implemented in order to translate prices for one tonne of raw material into the prices per litre of produced biofuel. Production costs were calculated as the sum of raw material costs and conversion costs. For a better comparison, energy density factors (in Millijoule per litre, MJ/L) were taken into account and normalised to the average energy den­sity of fossil fuel. The results were adjusted production costs, based on the specific density of biofuels. Reference scenarios were calculated for 2015 and 2020. This model enables the calculation for different production scales in place and planned or hypothetical scales (e. g. simulation of not yet realised production scales).

As previously mentioned, the price of fossil fuel is the decisive factor for biofuel market success. Therefore, it is essential that biofuel production costs can compete

Table 4 Modelling of conversion costs for first-generation ethanol Scale Investment Depreciation Operational costs Total costs = operational expenses plus depreciation 2005 2010 2015 2020 2005 2010 2015 2020 (kt> (ml) (m Euro) (m (Cent/1) (m Euro) (Cent/1) (m Euro) (Cent/1) (m (Cent/1) (m Euro) (Cent/1) (m Euro) (Cent/1) (m Euro) (Cent/1) (m Euro) (Cent/1) (m (Cent/1) Euro/ Euro) Euro) year) Process step 1: enzymatic hydrolysis Learning curve 0.70 effect 2005-2010 Learning curve 0.80 effect 2010-2015 Learning curve 0.85 effect 2015-2010 10 13 10 0.50 3.95 6.00 47.40 4.20 33.18 3.36 26.54 2.86 22.56 6.50 51.35 4.70 37.13 3.86 30.49 3.36 26.51 50 63 35 1.75 2.77 12.00 18.96 8.40 13.27 6.72 10.62 5.71 9.02 13.75 21.73 10.15 16.04 8.47 13.38 7.46 11.79 100 127 50 2.50 1.98 18.00 14.22 12.60 9.95 10.08 7.96 8.57 6.77 20.50 16.20 15.10 11.93 12.58 9.94 11.07 8.74 250 316 75 3.75 1.19 24.00 7.58 16.80 5.31 13.44 4.25 11.42 3.61 27.75 8.77 20.55 6.49 17.19 5.43 15.17 4.79 500 633 100 5.00 0.79 30.00 4.74 21.00 3.32 16.80 2.65 14.28 2.26 35.00 5.53 26.00 4.11 21.80 3.44 19.28 3.05 Process step 2: fermentation Learning curve 0.70 effect 2005-2010 Learning curve 0.80 effect 2010-2015 Learning curve 0.85 effect 2015-2010 10 13 15 0.75 5.93 9.00 71.10 6.30 49.77 5.04 39.82 4.28 33.84 9.75 77.03 7.05 55.70 5.79 45.74 5.03 39.77 50 63 53 2.63 4.15 18.00 28.44 12.60 19.91 10.08 15.93 8.57 13.54 20.63 32.59 15.23 24.06 12.71 20.07 11.19 17.68 100 127 75 3.75 2.96 27.00 21.33 18.90 14.93 15.12 11.94 12.85 10.15 30.75 24.29 22.65 17.89 18.87 14.91 16.60 13.12 250 316 113 5.63 1.78 36.00 11.38 25.20 7.96 20.16 6.37 17.14 5.41 41.63 13.15 30.83 9.74 25.79 8.15 22.76 7.19 500 633 150 7.50 1.19 45.00 7.11 31.50 4.98 25.20 3.98 21.42 3.38 52.50 8.30 39.00 6.16 32.70 5.17 28.92 4.57

effect

2005-2010

Learning curve 0.80

effect 2010-2015

Learning curve 0.85

effect 2015-2010

with those of fossil fuels. This was the main focus for our comparative analysis. To compare production costs, historical prices for raw materials were extrapolated in the course of reference scenarios of the fossil fuel price. The identification of eco­nomically promising biofuel technologies was then enabled through modelling of projections for technological advancements in respect to production scale and learn­ing effects. In other words, our approach enables the comparison of different biofu­els’ production costs while considering the specific development state, 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.

If the continued exploitation of carbon-based fuel sources do indeed pose a consid­erable threat to the earth via anthropogenic climate change, it will be necessary to consider the optimal use of an energy source that, in a way, could prolong the adop­tion of truly carbon-free technologies. The role of biofuels in transitioning human­ity away from carbon-based energy sources needs to be considered dispassionately and beyond the influence of short-term political manipulation. Biofuels will clearly be an important component in any future energy mix, though the extent to which they will be used remains a subject for debate (Charles et al. 2011). Eggert et al. (2011) emphasize this level of uncertainty and forcefully argue that the view that first-generation biofuels should be supported by policymakers so as to pave the way for second-generation biofuels is inherently faulty—and indeed counter-productive to promoting the market entry of more environmentally friendly biofuels, espe­cially since the feedstocks and production techniques are so very dissimilar. Their argument that investment subsidies for first-generation biofuels should be removed immediately so as to allow a ‘learning by doing’ approach to improve the economic efficiency of immature second-generation technologies has much to recommend it.

Whatever the case, it appears highly unlikely that biofuels will ever be able to replace petroleum-derived products on a one-for-one basis (Di-Lucia and Nilsson 2007), especially if current growth in the transport sector continues unabated. Indeed, the IEA (2012) reported a continued increase in CO2 emissions, particularly in developing countries such as China and India, owing to growth in the consump­tion of fossil fuels. As mentioned previously, biofuels have a clear advantage over other emerging transport energy solutions, such as those relying on stored electric­ity, electricity produced from chemical reactions (e. g. in fuel cells), or hydrogen, in either gaseous or liquid form. This is because they are able to be deployed and con­sumed, in blended form, by existing infrastructural systems—and the internal com­bustion engine in particular—without major technological modifications.[18] Indeed, most existing vehicles can operate with a small proportion of biofuel (usually cited as 10 %) without the need for any modification. In Brazil, the majority of vehicles (around 90 %) sold are able to run on pure bioethanol in its hydrated form (E100) if required to do so thanks to FlexFuel technology, though E20 or E25 is much more commonly used (Eggert et al. 2011). Switching costs are therefore dramatically reduced (Charles et al. 2009). A danger, here, is that reliance on biofuels might pro­long our existing lock-in to technologies that are manifestly dangerous to the envi­ronment, such as the internal combustion engine or the gas turbine. When looking at possibilities associated with new technologies, the network externalities that these technologies are likely to face must be considered, more so in light of the ‘lock-in’ effect of existing technologies (Katz and Shapiro 1986).

There also remains the possibility that biofuels, together with the engines that they have the ability to power, will be made largely redundant, in time, by other mobile energy technologies. In some respects, this would be the optimum outcome, since the preferred transport energy paradigm would clearly be almost completely, if not entirely, de-carbonized—something which can obviously never be achieved with the combustion of biofuels, no matter how de-carbonized their production becomes. Some of these potential contributors to reducing global GHG emissions across all sectors could include nuclear energy (particular if problems associated with the disposal of contaminated waste products are resolved, how­ever unlikely that may seem at present), cleaner second-generation (and third — and fourth-generation) biofuel production processes, the development of a hydrogen economy (predicated on the availability of clean, renewable energy, with potential links to nuclear energy) and other energy paradigms, e. g. geothermal, hydroelec­tric, photovoltaic and wind, all of which could contribute either directly or indi­rectly to de-carbonized mobility (Charles et al. 2011).

Of course, up until the point that other technologies become more cost effective, biofuels would have an important place in alleviating the existing reliance on carbon — based forms of transport energy. A balance must therefore be reached between (1) biofuels taking over from traditional petroleum-based transport energy fuels (which seems highly problematic, at least with existing technologies) and (2) the emergence of the environmentally optimum outcome of a completely de-carbonized transport sector throughout the world. In effect, the transition from liquid carbon-based energy transportation, based on a combination of fossil fuels and biofuels, to a more gen­uinely sustainable paradigm will need to be governed carefully, while the ongoing suitability of biofuels as part of this transition will need to be monitored closely. As Sharpe and Hodgson (2006, p. 6) have observed, there is “a significant danger that, by wringing more capability out of our existing systems, we may fail to tackle more fundamental issues”. In this respect, biofuels of whatever type must not be allowed to impede the bringing to market of more long-term transport energy technologies.

Given the current inability of second-generation biofuels to find their way to mar­ket, it is likely that substantial political support, with attendant policy mechanisms, will be required. Yet, as Eggert et al. (2011) point out, it will be necessary to avoid any political or technological lock-into biofuels of any sort. Governments clearly must balance support for second-generation biofuels with support for other alterna­tive mobile energy sources. As a consequence, they argue that policies that promote even second-generation biofuels will need to be flexible, while support programs should be able to be terminated at short notice if it becomes clear that alternative technologies are more desirable in the long run. In effect, and as Eggert et al. (2011, p. 9) aptly put it, “policies for promoting R&D for cellulosic ethanol should only have as their aim to uncover the technology’s true potential (which is so far not clear), and not operate with ambitious goals for the technology’s future market penetration”.

To demonstrate this point, one need only think of existing political commitment to first-generation biofuels, which has proved difficult to withdraw, even though these fuels have not shown the environmental potential once commonly ascribed to them. The same must not occur with respect to second-generation biofuels if other technol­ogies emerge as offering greater long-term potential. A particular threat is that first — generation technologies will continue to be supported by politicians and stakeholder interest groups, particularly in agrarian-based societies, because second-generation production, together with third — and fourth-generation, will typically be far more cap­ital intensive and less labour intensive, and therefore may have more limited immedi­ate economic impacts on the local area as a result of reduced employment prospects in the local community (Larson 2008). This issue is gaining increasing attention in the biofuel policy space as existing multilateral arrangements continue to focus on promoting international trade rather than overall global sustainability (Lima 2009).

5 Concluding Remarks

There is clearly a need for producers of biofuels to look carefully at their biomass sources so as to ensure that they are not creating a market for unsustainable agri­cultural practices. Indeed, without sufficient scrutiny from these purchasers of bio­mass, agricultural producers may be prompted to cultivate the requisite biomass in a highly unsustainable fashion (Mathews 2008). Advances in biotechnology, and the increasing possibility of replacing fossil fuels with second — and probably third — and fourth-generation biofuels, could potentially address many challenges related to both energy and food security in a relatively sustainable manner. However, there is a need to (1) further investigate the environmental impacts of advanced biofu­els through more comprehensive analysis in individual circumstances to ensure that they are truly reducing the global carbon footprint without affecting exist­ing ecology and (2) create effective governance and institutional arrangements across national boundaries to ensure that the biofuel industry looks beyond the visible horizon and does not advantage some regions at the cost of others. While biofuel technology is likely to evolve over time, thereby making the production processes more sustainable from an environmental, social and economic perspec­tive, the developed world will undoubtedly need to play a strong leadership role. This could be achieved by supporting the commercialization of cutting-edge bio­fuel production processes instead of protecting their respective local economies by subsidizing biofuel crops that are not particularly friendly to the environment. A greater focus must be placed on non-edible biocrops (including algae) and com­mercializing advanced biomass-processing techniques that will emit less GHGs, consume less land and yield high-energy outputs. In short, moral and ethical con­siderations must prevail over the arguably short-term political and economic out­comes currently associated with the global biofuel industry.

A recent empirical analysis has demonstrated that, for example, the use of rapeseed biodiesel represents a saving of approximately 56 % of emissions when compared to conventional diesel, measured in CO2 equivalents (Rasetti et al. 2012). According to Timilsina and Shrestha (2010), biodiesel from palm oil is generally considered to

yield the most substantial GHG savings, typically in the range of 50-80 %. Biodiesel both derived from sunflower and from soybean delivers significant GHG savings: Emission savings from biodiesel based on sunflower appear to converge around 60-80 %, while those from soybean biodiesel tend to be around 50-70 %.

However, recent studies have shown that the production of biofuels can lead to a net rise in CO2 emissions if dLUC and in particular ILUC effects are taken into account (see Table 12); this is the reason why the EU in the COM 595 wanted to limit the contribution that conventional biofuels make toward attainment of the tar­gets in the RED.

Furthermore, starting with commodity cultivation up to its final use, it must be verified that the greenhouse gas reduction accompanying the use of biofuel is cur­rently at least 35 % and from 2017 at least 50 % compared to fossil fuel.

EU Commission instructed various scientific institutes in order to verify the connection between what land extents would have to be additionally cultivated and what quantity of greenhouse gases would be emitted from these areas if the EU target value of 10 % of renewable energies in the transport sector was achieved.

A cause-effect relationship could not be verified. The reason for this is very complex connections to the international agricultural markets and the low amount of commodities for biofuel production. This is why the EU Commission had ini­tially suggested having this ‘ILUC phenomenon’ further investigated by scientists.

Table 12 shows the average GHGs emission savings (in %) in the production of biodiesel from different feedstocks (rapeseed, sunflower, palm, and soybean) com­pared to those related to the diesel life cycle in three different scenarios: the first without land-use changes and the second and the third including direct and indi­rect land-use changes, respectively. Negative values indicate increase in emissions.

It also provides the ratio between the energy generated during the use of bio­diesel in road transport and the energy used during production, processing, and transportation of the biodiesel (energy efficiency).

These data derive from an exploratory meta-analysis of 32 scientific and techni­cal reports emerging from international research (Bentivoglio et al. 2012).

Looking at the data in the Table 12, it results that, in the scenario without land-use change, all the biofuels considered provide GHG emission savings. In the second scenario, the most remarkable result is the huge loss in emission sav­ings bound to the production of biodiesel from palm oil due to the substitution of peatlands in Malaysia. Regarding the energy efficiency, biodiesel from palm oil recorded the best performance (9.1).

2 Conclusions

The sustainability of biofuels derived from agricultural biomass is widely debated nowadays. On the one hand, the production of biofuels ensures energy security for the historically non-oil producing countries; on the other hand, it turns on the food versus fuel debate and the land-use change issue, generally responsible for a net loss in GHG emissions savings related to biofuels production and consumption. However, these issues need to be addressed keeping in mind different variables: the geographical area of production of energy biomass, the type of biofuel (ethanol or biodiesel) produced, and the feedstock used (corn, sugarcane, beet, vegetable oils).

This work compares different aspects related to the production of ethanol from sugarcane in Brazil (first generation) with those bound to the production of European biodiesel and of rapeseed oil that it is a principal European feedstock.

The goal was to highlight the differences between Brazil and European Union in the biofuel production and the reasons why Brazil has a competitive advantage in the ethanol production and the European Union has a competitive advantage in the biodiesel production.

The comparison between the two biofuels summarizes the results derived from the extensive scientific literature, taking into account production and energy effi­ciency, but also economic and environmental sustainability.

The sugarcane ethanol energy balance is 9.3, much higher if compared to 1.4 for ethanol from corn in the USA and to 2.5 for rapeseed biodiesel in EU. The ethanol productivity is approximately 7,000 l/ha, whereas biodiesel from rape — seed yield (the most frequently used biomass in the EU) is about 1,320 l of bio­diesel per hectare. At the same time, ethanol production costs from sugarcane are much lower than those required to produce biodiesel from rapeseed oil. According to international literature, the costs derived from empirical analysis are about 0.56-0.58 $/l for the Brazilian sugarcane ethanol (Xavier and Rosa 2012) versus 1.00 $/l for the European rapeseed biodiesel (Finco and Padella 2012).

Concerning environmental sustainability, the performances in terms of GHG emissions saving, too, are in favor of sugarcane ethanol. However, in this case, the production of biodiesel, and in particular from palm oil and soybean, does not seem to deviate very much from those values. The fundamental question is that palm oil is not indigenous production and EU imports it from Asia. In addition, if it include direct and indirect land-use changes in the average GHGs emission savings (%) from different feedstocks (rapeseed, sunflower, palm and soybean), it is pos­sible to identify GHG emissions increase especially in palm oil production. In the opposite case, the sunflower which is widely produced in southern Europe (Italy, Spain) shows the best performance with regard to environmental LUC and ILUC.

It should be noted that the assessment of the effects of land-use change on the direct and indirect are very controversial and the international literature presents many methodological approaches that are not always comparable.

Regarding the Brazilian scenario, there are many studies on land use, direct and indirect (LUC, ILUC). For example, the research studies of Brazil show that the amount of new land required for sugarcane production would be relatively small (Arima et al. 2011; Macedo et al. 2012). In the same way, the LUC module based on a transition matrix developed by Ferreira Filho and Horridge (2011) and calibrated with data from the Brazilian Agricultural Censuses of 1995 and 2006 shows how land use changed across different uses (crops, pastures, forestry, and natural forests) between those years. The results obtained by general equilibrium models approach show that the ILUC effects of ethanol expansion are of the order of 0.14 ha of new land coming from previously unused land for each new hectare of sugarcane. This value is higher than values found in the Brazilian literature (Ferreira Filho and Horridge 2011).

In this context, the contribution of government policies (Brazil and EU) is essential in order to guide the biofuel sector toward a sustainable development. A first step in this direction was the introduction of certification schemes and criteria, accepted worldwide as well as the attempt to avoid direct and indirect land-use changes, preventing the exploitation of sensitive areas to the detriment of biodi­versity and carbon stocks reduction. However, according to Amezaga et al. (2010), the sustainability criteria proposed by the EU, which aim to combat the environ­mental problem, have been subject to widespread criticism and extensive discus­sion. Problems have been voiced not only about the measures that are in place, but also about significant factors which are not dealt with in the Directive.

Nevertheless, it should be noted that the market-oriented policies implemented by governments should be consistent and continuous in time so as to avoid market distortions and even more failures in the sector as is being done in the European context after the abolition of the instrument of tax exemption and the imposition of product requirements is not always appropriate.

Despite the competitive advantage, in terms of economic and environmental sustainability, taken by sugarcane ethanol compared to other biofuels as enlight­ened by the previous considerations, we believe in the importance of defending even a small European biodiesel production to sustain energy security, considered by all the BRIC countries the main engine of economic development.

In this transaction, the degree of uncertainty is high for both parties, which is related not only to the risk of losses under the conditions of this activity (drought, pests, prices, etc.) but also to the risk of breach of contract.

Regarding risks resulting from environmental conditions, we highlight the cases of fatal yellowing (FT) disease in the north of the country.

Palm oil, according to Trindade et al. (2005) and Barcelos et al. (2001), is highly susceptible to FY. This anomaly, according to a group of authors, is a seri­ous disease of extreme importance to the economy of the countries that cultivate these oilseeds, particularly in Brazil where it has caused vast losses as it multiplies rapidly (TRINDADE et al. 2005).

FY is a threat to the development of palm oil culture in Para, aggravated by the fact its cause remains unknown. Several studies have been conducted to determine the cause or the causal agents of FY in palm oil trees, yet thus far, no correlation has been found with insects, physiological, soil, and pathogen problems (BOARI 2008).

In the case of palm oil, a crop that requires high investments, as the first harvest only takes place about 4 years after planting, the migration to this crop did not take place, even though the percentage required in the north is considered low in comparison to other regions. However, this fact was verified in the northeast with the castor bean, where the SCS percentages were high (Cesar 2012).

The low interest in this culture enabled building credibility in the arrangements fostered by Agropalma, and the company already has a list of farmers interested in participating in PNPB. The integration model investigated for family farming— albeit with some deadlocks in its implementation and maintenance—was reported by all respondents in this study as a case study to be replicated.

The oil palm projects are still considered pilot projects, which has contributed to better tracking the results by MDA. However, there are risks regarding the fam­ily farmers abandoning the projects, given these workers’ more extractivist profile and due to the planting requirements for these palm trees. The renouncement rate of the projects is of around 10-15 %.

Given these circumstances, according to the theory presented, the type of busi­ness relationship between family farming and the biodiesel plant should imple­ment a governance structure characterized by relational contracts. That is why by mean of the SCS seal, companies promote the preliminary signing of the con­tract as well as the partial verticalization of family farming. However, it should be emphasized that the attributes analyzed are very high for oil palm, creating a tendency in which companies prefer to internalize these costs by a complete verti — calization of the agricultural activity.

The high uncertainty—as in the cases of family farming—is associated with changes in prices and product availability in the market (supply by the farmers), which in turn contributes to market price fluctuations, as for instance foreign commodities and products used by other industries (competition between indus­tries). Lastly, this transaction can be coordinated by the market itself, but in the case of the Brazilian biodiesel production, this tends to take place via contracts between the processing plant and business farmers and the plants and extractors.

Due to the many problems associated with the implementation of second-genera­tion biofuels, initiatives are now undertaken to research third-generation biofuels that mainly make use of algal biomass as the feedstock (John et al. 2011). Algal

• Simple and well-known

production methods:

Produced directly from food crops by extracting the oils for use in biodiesel or producing bioethanol through fermentation

• Scalable to smaller production

capacities

• Experience with commercial

production and use in many countries

• Well-recognized feedstocks:

Wheat and sugar are the most widely used feedstock for bioethanol while oil seed rape for use in biodiesel

• Fungibihty with existing

petroleunr-based fuels

• Major issue is ‘fuel versus food’

• Produce negative net energy gains Releasing more carbon in their

production than their feedstock’s capture in their growth

• High-cost feedstocks lead to high-cost

production

• Low land-use efficiency

• Produces sustainable energy but

also can capture and store CCb

• Biomass materials, which have

absorbed CO2 while growing, are converted into fuel using the same processes as second-generation biofuels

• Require nretabohcally engineering

nricroalgae that can capture CCb and synthesize biofuels at the same time

• Technically very cumbersome and

commercially not viable

biomass is derived from both micro — and macroalgae and contains high amount of lipids. Such biomass has high potential as biodiesel precursors as they con­tain up to 70 % of oil on dry-weight basis (Demirbas 2011). However, it should be noted that all species of microalgae are not suitable for biodiesel production. Microalgae require low maintenance and are able to grow in wastewaters, non­potable water or water unsuitable for agricultural purpose, and even in sea water (Alp and Cirak 2012). The biomass can double in less than a day, and its produc­tion can be combined with CO2 from petroleum industries. The main limitation of microalgae-based biofuels is the requirement of large areas for their cultivation or costly photo-bioreactors. Moreover, such large units need to be located near the production unit, which is not feasible in many instances. The major decisions to be taken for setting up a microalgae-based biofuel production facility involve selec­tion of open or closed system and batch or continuous mode of operation. Algal biomass can be easily cultivated in open-culture systems such as lakes and ponds and in closed-culture systems like photo-bioreactors. However, both open-culture and closed-culture systems have their own merits and demerits. The closed-culture systems can be operated in either batch or continuous mode. Although continu­ous mode of operation seems convenient, it suffers from contamination and dif­ficulty in controlling the non-growth-related products. Among the macroalgae, the Laminaria spp. and Ulva spp. are the most important ones from the energy per­spective. On the other hand, there are at least 30,000 known species of microalgae. In brief, the supply chain of algae-derived biofuels includes biomass generation, harvesting, pretreatment, downstream processing, and market.

Biofuel comes from biomass: biological material that comes from living organisms. In the USA, ethanol is the main biodiesel and in 2008 and 2009, 9.0 and 10.8 billion liters of ethanol were distilled, respectively, representing 6.5 % of the automotive fuel in the country (Wetzstein and Wetzstein 2011). In the USA, biodiesel is funded by the federal government according to a partial tax exemption and several state sub­sidies. These initiatives have generated a rapid growth in terms of ethanol produc­tion (from 0.2 billion liters in 1980 to over 10 billion gallons).

In Brazil, the dominance of biodiesel is due to the production of ethanol and biodiesel, where biodiesel has grown in the last few years, especially due to a gradual increase of diesel used for road transportation, according to governmental norm-related resolutions, such as the one made on January 1st 2010, where the percentage of biodiesel to be added to diesel oil increased to 5 % of the volume consumed in the country, which is approximately 341 million barrels/year and growing, as it is shown on Fig. 1.

We can see on Fig. 1 (right) that the apparent consumption of diesel has grown significantly; in January 1979, there was a daily average consumption of 297 thousand barrels, and in December 2012 we can see an apparent consumption of 1,059 thousand barrels/day—a 256 % increase for this period. Accompanying the consumption of diesel, the production of biodiesel was significantly increased between 2005 and 2012, in this period there was an expressive increase of the national biodiesel production (from 736 to 2,618,624 m3 in 2012, equivalent to 17 million oil barrels). Do note that this increase was due to the introduction of biodiesel in the Brazilian energetic matrix in 2005, where we tried to gradually increase the percentage of biodiesel in the diesel oil used for road transportation (from 2 % in January 13, 2005, to 5 % in January 2010, and an estimated growth for the next years to come).

On Fig. 1 (left), we can see that the apparent consumption of ethanol has also experienced a significant growth. In January 1979, the average daily consumption was at 34 thousand barrels of diesel, and in December 2012, there is a 334 thou­sand barrels/day—a 982 % increase for this period. Please note that this increase was due to the creation of a Brazilian program of incentive to ethanol production and consumption as a source of energy—the Proalcool. The National Alcohol Program

(Proalcool) was created by the decree No. 76.593/75, thus stimulating the production of alcohol for the internal and external markets and the automotive fuels policy.

Considering this continuous increase of the biodiesel consumption, Brazil has 65 industrial plants authorized for construction and 10 are authorized for expan­sion, making up an increase of the daily productive capacity of 4.114 and 748 m3, respectively, while currently the monthly production is of around 60 % of its cur­rent installed capacity (ANP 2012). Figure 2 shows the distribution of biofuels companies in the national territory.

On Fig. 2, we can see the cropped area for sugarcane, where we can see that the plantation concentration is especially high in the central-southern region (where Sao Paulo represents 63 % of the region’s production and 54 % of Brazil’s production), and in the north-northeastern region (especially in the coastal region, which represents around 13 % of the national production of sugarcane). We can see on left

of Picture 2 that there is a higher concentration of industrial plants in the south and central west, which are traditionally known as great soybean producers; this cereal is currently responsible for 80 % of the raw material for producing biodiesel. The main source of raw material for biodiesel is soybean, followed by beef fat, and cotton. Despite being the main raw material used in the process of producing biodiesel, it is not the most efficient, considering the crop area, as shown on Fig. 3.

We can see on Fig. 3 that each hectare of planted soy corresponds to 700 L of bio­diesel, whereas the palm oil corresponds to around 5,100 liters. From this perspective, there is a need of 3.073 million hectares of land destined for soy, in order to respond to the current demand of 17 million barrels/year, representing approximately 12.30 % of the planted area in Brazil: 27.2 million hectares, as mentioned (MA 2012).

Considering the importance of this topic in the agricultural context, we have yet to consider the importance of understanding the concentration level for the bio­diesel industry, as several strengths operate in this system: social demands due to the increase of food cost, economic demands due to the importance that the main raw material (soybeans) has in Brazilian exports, as well as political demands due to the need of decreasing the oil dependency in the country’s energetic matrix.

In this context, we can see that the biofuel demand shall continue to rapidly increase, influenced by the crescent increase of oil cost, and the crescent govern­mental support to cleaner energies. This increase will be induced especially for environmental and energy safety reasons. In the New Policies Scenario that con­siders the public policies commitments and plans announces by the countries, including guaranties of reduction of greenhouse effect gases emission, and plans to ban subsidies for fossil fuels, the world consumption of biofuel will increase approximately from the current 1.1 million barrels/day (63.8 billion liters/year) to 4.4 mb/d (255.3 billion liters/year) in 2035 (MME 2010).

Also according to MME (2010), biofuels will account for around 8 % of the world consumption for transportation in 2035, a significant increase compared to 3 % in 2009. It is estimated that the US and Brazil will continue to be the biggest world producers and consumers of biofuels. The USA will account for 38 % of the world consumption of biofuels in 2035 (a decrease compared to the current 45 %), whereas Brazil will account for 20 % of the world consumption of biofuel in 2035. Given the importance of this topic, and in order to respond to the problem of this research, the following section presents the main methodological aspects used in this work.

Second-generation biofuels are derived from feedstocks not traditionally used for human consumption, such as wood, organic waste, food crop waste and dedicated biofuel crops. As a result, their use in biofuel production has minimal to no impact on other edible crop prices, thereby also alleviating concerns that biofuel produc­tion will exacerbate famine in the developing world (IEA 2008a). Furthermore, the technologies employed in producing second-generation biofuel use the majority or even all of the biomass (Table 1). This helps with reducing the considerable waste associated with the production of first-generation biofuels (Deurwaarder 2005).

At present, it is thought that second-generation biofuels could cost as much as twice their petroleum-based equivalents (Reilly and Paltsev 2007; Carriquiry et al. 2010) and, certainly, more than first-generation equivalents. Low carbon prices, or rather the inability of the market to internalize all the negative external costs asso­ciated with petroleum-based fuels, have also had a significant impact. In effect, the current global price of fossil fuels vis-a-vis more sustainable ones such as second — generation biofuels can be regarded as something of a market failure. That said, it

Table 1 Classification of biofuels (United Nations 2008)

First-generation biofuels Second-generation biofuels

is hoped that, by 2050, 90 % of the world’s biofuel will be provided by second- generation techniques (IEA 2008b).

In the past few years, biodiesel production from insect oil is gaining interest in the scientific community (Leung et al. 2012; Li et al. 2011a, b). This technology is based on the fact that many insects possess a lipid body rich in monounsaturated (MUFA) and polyunsaturated (PUFA) fatty acids (Rumpold and Schluter 2013). MUFA are among the preferred fatty acids for biodiesel production due to their ability to improve the engine behavior under cold weather conditions, besides bio­diesel oxidative stability (Pinzi et al. 2009).

The amount of lipids and the fatty acid composition of the insect depend not only on the species but also on the diet used to grow it (Manzano-Agugliaro et al. 2012; Belluco et al. 2013) (Table 1). For the selection of suitable insects to produce fats to be used as biodiesel feedstock, the following parameters should be considered: fat content, duration of the life cycle, requirements of space to grow, reproductive capacity, and low-cost feeding (Manzano-Agugliaro et al. 2012). In the search of more economical nourishment, it is important to select insects that are able to consume waste both to produce oil and for recycling purposes. Therefore, the insect Hermetia illucens, also known as black soldier fly (BSF), has been investigated as a source of oil for biodiesel production (Li et al. 2011b; Zheng et al. 2012a) and also for its capability for waste manage­ment (St-Hilaire et al. 2007). Li et al. (2011b) used BSF larvae for the bioconver­sion of diary manure on biodiesel and sugar. Results showed a consumption of 78 % of the initial value of manure (1,248.6 g of fresh manure) in 21 days. They produced 15.8 g of biodiesel and 96.2 g of sugar from 70.8 g dry BSF larvae. Other wastes, i. e., lignocellulosic materials, have been tested. Zheng et al. (2012a) analyzed different mixtures of restaurant solid waste (RSW), rice straw, and Rid-X (bacteria that facilitate the breakdown of the solid organic wastes). Considering a ratio of 7:3 (RSW/rice straw) plus 0.35 % v/v Rid-X, they achieved 35.6 % of biodiesel per dry insect biomass. Animal waste is another residue that may cause health hazards and environmental pollution. From this group, cattle, pig, and chicken manure have been used to grow BSF larvae (Li et al. 2011a). The highest BSF larvae growth (327.6 g) resulted in 98.5 g of crude fat and 91.4 g of biodiesel.

In another study, Chrysomya megacephaly, a necrophagous blowfly, during its larvae development, was fed with restaurant garbage for 5 days and achieved an oil content in a range from 24.40 to 26.29 % (Li et al. 2012). But the most impor­tant finding is the oil acid value, lower than that of most insects and close to that of vegetable oils (Table 2).

Regarding the production of fatty acid methyl esters (FAME) from insect oil, a two-step process has been implemented in most cases: acid esterification (due to the high acidity of the oil) followed by basic transesterification. Reaction param­eters including temperature, amount of catalyst, time, and methanol-to-oil molar ratio were optimized (Table 3). Results showed that insect oil-based biodiesel properties fulfilled the ASTM D6751 and EN 14214 standards in terms of cetane number, density, flash point, water content, (Table 4), although only a few met the European standard methyl esters content (>96.5 %), kinematic viscosity, alcohol content, and both the acid number value and the oxidation stability required by both standards.