Memorandum submitted by Green Spirit Fuels
OVERVIEW
There can be no doubt that biofuels, improperly
or inappropriately developed, have the potential to produce negative
impacts. They can also bring very significant benefits, and it
will be the job of the EAC to evaluate these impacts and set the
result of their deliberations against future world demand for
fuels and the ability of existing fossil resources to fulfil that
demand, as well as to decide whether, overall, they view biofuels
as being positive or negative.
GREEN SPIRIT
FUELS LTD
This respondent is a UK based developer of projects
designed to produce bioethanol, currently from starch-based feedstocks,
and our comments will therefore focus chiefly on that area of
biofuels. It should be noted that "biofuels" encompasses
a very broad range of feedstocks and fuels, and that considerations
applicable to one fuel from one source may not necessarily apply
to other biofuels. In addition, the impacts of a particular fuel
type will vary both with geographical distribution and with the
feedstock used. For example, the impact of ethanol in Brazil,
using sugar cane as a feedstock, will be entirely different to
the UK wheat-based industry.
RESPONSE TO
EAC QUESTIONS
1. What are the possible positive and negative
social, environmental and economic consequences of biofuels?
UK ethanol
— Social impact positive: maintains
and enhances existing rural structure and creates additional employment.
— Environmental impact positive: reduces
fossil fuel use, carbon neutral.
— Economic impact positive: reduces
dependence on imported energy.
— Food v Fuel: the co-product from
a wheat based bioethanol plant is a high protein, non GM animal
feed. The feed will reduce/replace imported protein feeds such
as soya and (we currently import 4M tonnes/yr).
— Utilises current 2-3.5M tonne annual
UK wheat surplus.
— If set-aside land is used to expand
production (560,000 ha) this could potentially increase production
by around two million tonnes—based on 50% of this land growing
wheat.
Global
— Broadly similar to above, but if
rain forest clearance is driven by sugar/ethanol land needs, environmental
impact negative.
— Europe wide there is also extensive
set-aside land (4.5 million hectares) that can be used to expand
production. This could potentially increase production by some
12.4 million tonnes (based on 50% uptake).
— Eastern Europe—yields across
eastern Europe are considerably lower than the average yields
in western Europe. If yields are increased through better husbandry
then a further £x million tonnes per annum will be produced.
How might trade-offs between climate benefits
and environmental and social impacts be made?
All biofuel development should be able to demonstrate
its sustainability to agreed standards.
Is there a need to develop a new biofuel strategy
for the UK or EU, to balance the environmental, social, economic
and climate impacts of biofuels?
There is a need for an agreed, co-ordinated
approach to the introduction and expansion of biofuels, but such
a strategy can only be implemented once the EU (and preferably
the world) has decided how rapidly it wants to move and where
it wants to get to. Such a strategy will need the flexibility
to adapt to changing requirements; for example, to accommodate
the introduction of second generation biofuels in the future.
2. Should biofuels be regulated to minimise
the negative environmental and social impacts, and in what way?
How might regulation fit in with international trade agreements
and rules? Should there be regulation of the entire carbon cycle
of biofuels?
The question assumes that all biofuels will
have negative impacts. This is not the case. Nonetheless, regulation
will be necessary, based on national and internationally agreed
standards for sustainability, pollution prevention and control,
and best practice, such standards to be rigorously and evenly
applied across the industry. This MUST however ensure a level
playing field otherwise we will not see investment in UK and European
plants and will end up relying on imported biofuels and as such
will not meet the targets set. Carbon cycle assessment is a knotty
problem; a more general assessment of "best practice"
is probably the best we can hope for.
3. How successful are existing international
structures, such as the Round Table on Sustainable Palm Oil, at
ensuring that imports of biofuels can be obtained from sustainable
sources? To what extent is it currently possible to identify the
provenance and production standards of imported biofuels?
They are not seen as very successful. Whilst
it is possible to identify "green" biofuels, it is not
often formally done, and can only be satisfactorily accomplished
with the assistance of businesses and regulatory authorities within
the producing country. Even where the importing country knows
that the material is suspect, it allows the importation anyway.
Palm oil is a classic case in point.
4. At what stage is biofuel technology?
So called "1st generation" technology
continues to improve its efficiency, and there is still considerable
scope for development. Beyond that, several different approaches
are being examined, but they all remain many years away from full
commercialisation, if indeed some of them ever reach that stage.
Is there enough support for the development of
biofuel technology?
No. Both first and subsequent generation technologies
need far more development funding than they currently attract.
These are relatively new technologies (or old ones needing specific
development for new purposes) and require rapid, sound development
if they are to make a significant contribution to the world's
energy needs.
Are current policies promoting the development
and deployment of a range of biofuel technologies?
In part, yes. But there is a lack of focus and
at times a lack of understanding of commercial realities. The
legislation must be finalised and implemented sooner and give
longer term certainty to this developing industry.
How successful have EU strategies and directives
been in stimulating biofuel usage?
More successful than UK initiatives. They have
set targets that, when set, were achievable, albeit they have
been compromised by slow uptake by individual nations and by not
being mandatory from the word go. They have forced national governments,
including the UK, to take action (even if that action has been
half hearted). There is a lot of talk and expectation but the
reality is that the industry is still in its infancy. With the
current high grain prices, low ethanol prices and the uncertainties
of dealing in commodities that are not linked and cannot be hedged,
coupled with the tightening of the debt markets many if not all
of the plants publicized may well not reach fruition.
Will the 2010 biofuel target be reached?
No. See above.
How effective are the Government's fiscal arrangements
for biofuels?
The 20p/litre derogation on fuel duty was always
inadequate, and known to be so. The effectiveness of the RTFO
will depend entirely on the way it is implemented and how it interacts
with the derogation.
5. What proportion of UK domestic transport
and energy generation could be fuelled by UK-produced biofuels?
Energy is a separate matter, and is more relevantly
discussed with reference to biomass supplies as opposed to agriculturally
based feedstocks such as wheat. With regard to transport biofuels,
given the current surplus annual wheat production, the UK is capable
of producing the 5% 2010 target quantity of ethanol to go into
petrol. Rotational and yield/ha considerations make this much
more of a challenge for biodiesel from oilseed rape, our only
viable diesel replacement in the UK.
Beyond the 2010 target, and assuming that 50%
of current set-aside land grew wheat at 7.5 tonnes/ha, this would
generate an additional 600,000 tonnes/yr of ethanol, another 3%,
without impacting on human food supplies or on land usage patterns
(other than the removal of set-aside, which will happen anyway).
It should be noted that farmers have always
grown crops that showed a good return. If wheat and rape are profitable,
then there will be a gradual increase in their acreages, but again,
rotational considerations will prevent mono-cropping.
Is it possible for biofuels to entirely replace
oil for transport purposes?
No, not at current usage rates. We should be
using the time that biofuels buy for us to develop more efficient
means of combustion to give us better miles per gallon. Much of
this technology already exists, as patents bought up over the
years by parties with an interest in the status quo, and left
to languish on shelves. In addition, there is no doubt that the
population will need to become accustomed to restrictions on their
driving—either in terms of mileage limits or engine size/economy.
Is there a role for public procurement or public
transport?
Yes. The Swedish example shows that clean public
transport reduces pollution in town centres, and procurement policies
can have the same impact, as well as giving a good example to
the local community. Somerset County Council's use of E85, backed
up by the police, EA and others, is one of the few UK examples.
Will biofuels improve fuel security?
To the degree that they replace fossil fuels
currently imported, yes. This assumes they are made from home-grown
feedstocks.
How secure are biofuel crops from unexpected events
such as drought or disease?
No more secure than any other crop, because
they are the same as other crops—it is all wheat/rape/etc.
In wheat terms, there have been significant and increasing annual
surpluses of grain for the last 25 years. This indicates a level
of security that is probably better than that of imported crude
oil or rapidly diminishing North Sea resource.
6. What impact would an expansion of UK production
of biofuels have on the ability of the UK to produce its own food?
This has been addressed in 5 above, and it has
been assumed that biofuels would not develop beyond a point at
which it impacts food production in the UK. However, should a
cheap and sustainably produced source of imported feedstock occur,
then the industry should take advantage of it.
How might this impact on greenhouse gas emissions
from international trade patterns?
Assuming no need to import additional food (see
above), then the impact would be to reduce GHGs through use of
biofuels and reduced transport/refining of fossil fuels.
What impact might the expansion of biofuels have
on international food security and prices?
There is no doubt that food prices will rise,
but not to the degree claimed by scare mongerers. A recent report
from AGPB (France) suggests that grain represents 4.1% of the
cost of a baguette, and 6.6% of the price of a kilo of pork. The
removal of set-aside will result, Europe wide, in the production
of 10% more crops, further reducing the pressure on land use,
while European estimates show that only 5% of crops will be used
for biofuels in 2007-08, demonstrating that the market is over-reacting
to what is largely at present a predicted impact rather than an
actual one.
7. How might farm viability in both developed
and developing countries change with an expansion of biofuels?
In simple economic terms, an additional market
for any product will tend to raise its value. Growers will react
to improved prices, increasing supply, which depresses price and
may reduce plantings, prices rise again, and so on.
What implications are there for poverty in developing
countries?
Increasing demand should make crop production
more attractive and may (if prices rise sufficiently) make it
worthwhile to bring additional land into cultivation, or to install
irrigation (this is already occurring in Peru for sugar production
as a result of ethanol demand). Provided that a realistic price
is paid for the resulting crop, then this would reduce poverty.
Should we be concerned about large monopolies
forming in the biofuel sector?
Yes. Biofuels are ideally suited to development
from the ground up, and will act as a check on the oil companies,
provided that they are not financially dependent on oil for their
development.
In addition to the questions addressed above,
it is worth noting that agricultural land will also be called
on in the future to provide land for the production of crops for
heat generation. This can be seen as putting the whole question
of biofuels from lignocellulosic sources in doubt, since this
means of producing ethanol is energy intensive and has significant
waste stream issues. Common sense would suggest that, if you have
a woody feedstock, then it is simpler and more effective to burn
it for heat generation than to go through a complex process to
convert it into a liquid fuel.
2 October 2007
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