Bioethanol was introduced into the transportation fuel supply chain as early as the 1970s with the introduction of the PROALCOOL program by the Brazil­ian government in an original effort to stabilize the international price of sugarcane, which was highly sensitive to subsidies by other domestic produc­ers. In 1979, the Brazilian government strengthened the program by spon­soring development of a fleet of ethanol-fueled vehicles [42]. Although the history of bioethanol in Brazil is quite tumultuous with significant govern­ment sponsorship, tax incentives, and subsidies, Brazil has emerged as the second largest producer of bioethanol (4.3 billion gallons/year in 2005) re­quiring 25% ethanol blends in transportation fuel, and has become energy self-sufficient by supplementing internal petroleum supplies and refining cap­acity with bioethanol production [43]. In 2005, total Brazilian petroleum production was estimated at 2 million bbl/day with consumption estimated at 1.6 million bbl/day, in contrast to the USA which produced 7.6 billion bbl/day, yet consumed 20 billion bbl/day [35].

Bioethanol may serve both as an additive or complete replacement for petroleum-derived transportation fuels, particularly gasoline in spark igni­tion (SI) engines. The volumetric energy fraction of ethanol is approximately 66% that of gasoline, suggesting a one-third reduction in the total kilometers per volume of ethanol consumed. However, review of the comparative phys­ical chemistry data provides insight into why ethanol combustion results in a 15% higher efficiency [44]. Ethanol (C2H5OH, 34.7 wt % oxygen) is a par­tially oxidized fuel compared to gasoline (C4-C12, 0 wt % oxygen), resulting in a lower stoichiometric air-to-fuel ratio. Therefore, a larger mass or volume of ethanol compared to gasoline is required to yield the same caloric output from combustion. However, ethanol also has a higher octane number, per­mitting the fuel to be burned at a higher compression ratio (defined as the ratio of the volume between the piston and cylinder head before and after a compression stroke). A higher compression ratio results in higher power output, efficiency, and consequently favorable fuel economy [45]. Compared to gasoline, there is only a 20-25% reduction in kilometer efficiency [44]. Fur­thermore, as a result of the significantly higher latent heat of vaporization for ethanol (1177 kJ/kg compared to 348 kJ/kg at 60 °C) there is an effective engine cooling and leaner operation. This leads to significant reductions in CO(g) and NOx,(g) emissions, with 85% ethanol blends of gasoline (referred to as E-85) yielding NOx,(g) emission reductions of 20% compared to pure gasoline. However, the emission of reactive aldehydes, including acetalde­hyde and formaldehyde, is increased [46,47]. Several studies on the effect of ethanol-gasoline blends (up to 60% ethanol) on engine performance and exhaust emissions have suggested that proper fine tuning of engine parame­ters can lead to excellent performance with significantly reduced hydrocarbon and CO(g) emissions [46-48].

In 1990 the USA enacted the Clear Air Act Amendments, mandating that oxygenated additives (methyl-tertiary-butyl ether, MTBE; ethyl-tertiary-butyl ester, ETBE; or ethanol) be included at 2 wt % oxygen to decrease hazardous emissions. In 1999, 21 million tons of MTBE were produced globally, primar­ily in the USA, although Europe produced approximately 3.3 million tons.

In the USA, it is among the most frequently found groundwater contami­nants with over 400 000 underground storage tanks identified to be leaking by the US Environmental Protection Agency (EPA) since 1988 [49]. Although there is still debate in the public health community as to the toxicity level and health risk that MTBE human consumption poses, a number of US states have banned the use of MTBE as a fuel additive. Furthermore, many European nations, including the UK, Germany, and Switzerland have identified MTBE — contaminated sites and are transitioning to ethanol enrichment [50,51]. As a result, ethanol has been the favored fuel additive for increasing oxygenation.

In August 2005, the Energy Policy Act (EPACT) was enacted into US law creating the national Renewable Fuels Standard (RFS). The RFS calls for

15.1 billion L of renewable fuels (primarily ethanol but may include alterna­tive fuels such as biodiesel) to be used by 2006, increasing by 2.6 billion L/year until 2011 when a final volume of 28.4 billion L will be called for in 2012 [43].

The USA is neither alone nor first with actively passing legislation that requires and promotes the integration of biofuels into the transportation economy. As previously discussed, Brazil presently requires a 25% ethanol blend of all gasoline, and continues to provide preferential tax treatment for ethanol producers and consumers. Argentina is requiring a 5% ethanol blend over the next 5 years. Thailand requires that all gasoline sold in Bangkok must be composed of 10% ethanol. India is requiring 5% ethanol gasoline blends. Canada has provided tax benefits for ethanol producers and consumers since 1992 [43].

The European Union (EU) has also taken an aggressive stance in reshap­ing its transportation fuel and energy supply chain, in addition to promoting industrial biotechnology as a sustainable and cost-effective alternative to petrochemical processes. In December 2005, the EU adopted the Biomass and Biofuels Action Plan. This plan encompasses more then 20 specific ac­tion items, including creation of the Biofuels Technology Platform with the explicit purpose of advancing research into the use of forestry, agricultural, and woody crops for energy purposes. In February 2006, the EU adopted the Strategy for Biofuels, which set out three objectives: (1) to promote biofuels in both the EU and developing countries, (2) to prepare for large-scale use of biofuels by improving their cost-competitiveness and increasing research into second-generation fuels, and (3) to support developing countries where biofuel production could stimulate sustainable economic growth [52].

Furthermore, the EU has established quantitative targets for incorporation of biofuels into a broader and emerging bio-based economy. The EU trans­port sector accounts for more than 30% of the total energy consumption, with a 98% dependency on fossil fuels. There is also significant pressure for the EU to comply with the Kyoto Protocol, an agreement under the United Nations Framework Convention on Climate Change, ratified by 160 countries to sig­nificantly reduce greenhouse gas emissions, specifically CO2,(g). The EU has failed to meet the Kyoto targets with 90% of the increases in CO2,(g) emissions between 1990 and 2010 attributable to transportation fuel usage. Therefore, significant reform in transportation fuel usage is required. There are three specific legislative actions in place [53]:

• Promotion of renewable energy-based electricity generation from 14% in 1997 to 21% by 2010 for the EU 25 (22.1% for EU 15) (Directive 2001/77/EC)

• Promotion of biofuels for transport applications by replacing diesel and petrol to the level of 5.75% by 2010 (Directive 2003/30 EC) accompanied by detaxation of biofuels

• Promotion of cogeneration of heat and electricity (Directive 2004/8/EC)

It is clear, however, that the EU is not meeting the objectives set forth. Spe­cifically, the current production of liquid biofuels in the EU is 2 million tons of oil equivalent (Mtoe), less than 1% of the market. The EU policy target for 2010 was 18 Mtoe in the transportation sector alone. Although it is un­likely the target will be met, it should be noted that between 4 and 13% of the total agricultural land in the EU would be required to meet the above target. Therefore, through the creation of the various plans and platforms highlighted before, the EU has established, “An ambitious and realistic vi­sion for 2030 is that up to one-fourth of the EU’s transport fuel needs could be meet by clean and CO2-efficient biofuels” [53]. Although it remains to be seen whether the appropriate resources will be allocated to meet this goal, it is certainly clear that industrial biotechnology, in particular the concept of a bio-based economy with biorefineries at its core, has taken center stage in the EU meeting its energy needs and environmental targets.

2.3