India announced a few days ago at the G20 summit meeting in New Delhi the launch of a global biofuels alliance to promote the use of clean fuels, which includes the United States and Brazil as founders, along with India. This global alliance is expected to help accelerate efforts to achieve net-zero emissions targets by facilitating trade in biofuels.

Biofuels are a type of fuel derived from organic sources, such as plants, grasses, straw and other organic waste, and can be used as an alternative to fossil fuels (oil, gas and coal).

Biofuels are part of a clean and sustainable energy ecosystem. Organic biomass is processed to produce multiple types of fuels in solid, liquid and gaseous forms, the most important of which are biodiesel and biogasoline, which are used to power car and bus engines and generate electricity.

Among the most important agricultural crops producing liquid biofuels are those crops containing sugars or starches such as corn, wheat and sugar cane, and some other crops that contain oils are used, such as soybeans, sun and others.

Biodiesel and biogasoline

Biodiesel is made from some vegetable oils such as rapeseed oil, palm oil, mustard and soybean, which is widely used as a main source of production due to the rapid growth of this plant, and the importance of biodiesel is that it can be used as a direct alternative to traditional diesel without any additives.

While bioethanol or biobenzene is made from several organic materials such as corn, wheat, sugar cane, seaweed and cellulose, the main component of many plant parts, which is obtained from agricultural waste and paper processing residues, but the best source for the manufacture of ethanol is sugar cane, because it contains sugars that are fermented into alcohol.

However, biogasoline is not a direct substitute for regular gasoline and is rarely used alone as fuel, as it requires substantial modifications to gasoline engines, or mixing it with conventional gasoline for use in engines in specific proportions and marked with the letter "E" followed by a number indicating the ratio of bio-gasoline to conventional gasoline in the package.

Biofuel Industry Generations

The biofuel industry has witnessed technical developments over the past decades and its sources of production have diversified to form 4 generations:

  • The first generation: in which the seeds and grains of plants were used to produce biofuels such as corn, wheat, soybeans, sugar cane, turnips, barley and others. The use of agricultural crops for fuel production has been met with global protests and widespread objections, as its production is at the expense of the global food basket, and has caused the conversion of many agricultural lands allocated for food production into biofuel crops, causing a significant rise in the prices of grains and vegetable oils in those countries.
  • The second generation: plant residues were used such as wheat stalks, corn, sawdust, hay, etc., and although the use of agricultural residues to produce fuel is better than the use of agricultural food crops, it deprives livestock of fodder, and agricultural soil from plant residues that act as organic fertilizer fertilizes them.
  • Third generation: Algae are used to produce biofuels, and global interest in third-generation biofuels produced from algae has increased because they do not compete with vegetable oils and agricultural crops intended for human consumption. In addition, algae cultivation will not be at the expense of agricultural land, nor does it affect freshwater sources, as it is grown using seawater or treated water.
  • Fourth generation: The latest global trend in biofuel production, which relies on changing the genes of a type of bacteria so that they are able to produce fuel from carbon dioxide.

Economic Benefits of Biofuels

Biofuels are alternative sources of oil and its derivatives and therefore effective in reducing greenhouse gas emissions, and growing crops to produce biofuels increases farmers' income, and through rational and balanced production can contribute to achieving food security. As well as job opportunities created by the biofuel industry in the fields of research and development, engineering and agriculture.

However, the current state of industry constitutes a limited contribution to meeting the world's energy needs, as for example, in 2021, global oil production was 90.3 million barrels per day, while global production of biofuels of all kinds was 2.23 million barrels of oil equivalent per day, or only 2.43%.

The United States leads global production of biofuels, followed by Brazil and Indonesia, while India, the initiator of the Biofuels Alliance, ranks seventh among the world's largest producers of biofuels.

Currently, about 80 countries have legislation to mix liquid biofuels with conventional fuels, as the decline in oil prices in 2020 and the change in government priorities due to the Corona pandemic, led to an increase in interest in biofuels, despite the doubling of their prices since 2020, which occurred as a result of the high cost of raw materials and energy costs as a result of the Russian war on Ukraine and other disruptions in global crop production.

During the first half of 2022, the price of first- and second-generation biofuels (accounting for 90% of all biofuels) averaged $270 per barrel of oil equivalent, which was about $70 per barrel higher than the average price of conventional gasoline at gas stations in the United States during the same period, according to the International Energy Agency. Prices of third- and fourth-generation biofuels have increased by 70 percent since 2020, averaging so far between $350 and $400 per barrel of oil equivalent.

Key challenges

Perhaps the biggest challenge for expanding biofuel production is to threaten food security or reduce revenues if those crops are produced for export, as happened in the early Brazilian experiment. As well as the transformation of agricultural land from producing food crops to fields for the production of biofuel inputs, thus causing an imbalance in the global agricultural diversity, and the eradication of many forests and nature reserves due to the need for large areas of land.

The high cost of production that exceeds that of alternative energy sources such as solar and wind also hinders the biofuel industry and makes it very difficult to compete with traditional energy alternatives. For example, in the coming years, India seeks to increase its production capacity by building and operating 12 facilities to produce second-generation biofuels from plant residues, and according to the official website of the Indian Ministry of Oil and Natural Gas, the cost of building these facilities alone amounts to 140 billion rupees ($1.6 billion) in addition to input and operating costs.

In Brazil and the United States, the comparison between biodiesel and conventional diesel in terms of the cost of production per liter in dollars shows the preference for conventional diesel as shown in the following figure:

Future Directions

In the forecasts of the International Energy Agency's World Energy Report last year, the contribution of biofuels of all kinds in 2050 will reach about 5.3 million barrels of oil equivalent per day, which is a small contribution that does not threaten the throne of traditional fuels, especially with the increasing trend towards greater use of electric cars, and in terms of electric power generation, the opportunity is still greater. For the prosperity of sustainable alternative industries such as solar energy, wind turbines, and others.

It remains to be announced what the International Biofuels Alliance will provide in terms of government subsidies, tax facilities and incentives or protectionist measures that may bring biofuels a greater contribution to the global energy market, without which it will not be able to compete with conventional fuels on a large scale due to the high cost of production, especially in the third and fourth generations.