Bioenergy: promises and challenges

High oil prices and concerns about the environmental effects of fossil fuels have stimulated interest in bioenergy – renewable biofuels such as bioethanol, biodiesel, and biomass. Can bionergy fulfill the promise claimed by its advocates? Can it become an environmentally sustainable, economically viable, pro-poor source of energy?

A set of policy briefs from the International Food Policy Research Institute examines the potential opportunities and risks bioenergy may create for poor people and farmers in developing countries.

Total global energy consumption is expected to grow 50 percent by 2025. Most of the increase will occur in developing countries. Finite supply of fossil fuels, and political instability in oil-exporting countries are set to force oil prices up further. Bioenergy is an attractive alternative because many countries could grow their own and it is a renewable energy source that has the potential to significantly reduce or at least slow growth in carbon emissions

Bioenergy already accounts for 10 percent of world energy supplies – 33 percent of energy use in developing countries but only 3-4 percent in industrialised countries. Brazil and the United States are the largest producers of ethanol for transport, accounting for about 90 percent of world production. Ethanol has displaced 40 percent of gasoline use in Brazil. The European Union, especially France and Germany, is the largest producer of biodiesel.

Bioenergy’s potential will increase as second-generation technologies become available, enabling more efficient conversion of cellulose-rich biomass. This should help bioenergy compete in price with fossil fuels and also expand the range of what can be used, some of which (like fast-growing grasses and trees) can thrive in less fertile and more drought-prone regions and are less competitive with food than current crops like sugarcane, maize and rapeseed.

Bioenergy does have drawbacks:

• Although in principle a carbon-neutral source of energy, fossil fuels are needed for growing, transporting, and processing the raw materials and for refining and distributing biofuel. Ethanol and biodiesel production in Europe and the USA today uses almost as much fossil fuel as is saved.
• Bioenergy uses resources (land, water and labour) that compete with food and feed production: if major food-exporters like the USA and Brazil significantly divert agricultural resources to bioenergy production, higher global food prices would particularly hit poor people.
• Excessive removal of biomass can mean less organic matter returns to the soil, leading to nutrient mining and land degradation.

Trade in biofuels still faces major barriers that are not on the current agenda of the World Trade Organization. Domestic biofuel industries being nurtured in the USA and Europe may not be sustainable without trade protection. Leaving bioenergy development entirely to the private sector will lead to production processes that fail to achieve the best environmental and social outcomes. National and international action is needed to encourage the bioenergy sector in countries with a comparative advantage – often developing countries with tropical climates.

It will be important to:

• offer tax rebates on biofuels, investment incentives and funding for research and development
• organise smallholders so that they can grow and market biomass crops to large processing firms
• develop biomass crops that yield higher amounts of energy per hectare or unit of water, thereby reducing the resource needs of bioenergy crops
• promote food crops that generate by-products that can be used for bioenergy
• promote cultivation of biofuel crops in less-favoured areas, rather than on prime agricultural land
• encourage international exchange of information on pro-poor biofuels.

Source(s):
‘Bioenergy and Agriculture Promises and Challenges’, Focus 14, International Food Policy Research Institute, edited by Peter Hazell and R. K. Pachauri, November 2006 (PDF) Full document.
Individual policy briefs examining the potential opportunities and risks of bioenergy for poor people and farmers in developing countries Full document.

id21 Research Highlight: 14 August 2007

Further Information:
Peter Hazell
Centre for Environmental Policy
Imperial College London
London SW7 2AZ
UK

Tel: +44 (0)20 75942806
Fax: +44 (0)1233 812138
Contact the contributor: p.hazell@imperial.ac.uk

Centre for Environmental Policy, Imperial College London, UK

Rajendra K. Pachauri
The Energy and Resources Institute (TERI)
Darbari Seth Block, IHC Complex
Lodhi Road
New Delhi - 110 003
India

Tel: +91 1124682100 and 41504900
Fax: +91 1124682144 and 2468214544
Contact the contributor: pachauri@teri.res.in

The Energy and Resources Institute (TERI), India

Other related links:
'Can biofuels benefit both the environment and poor people?'

'Biofuels, climate change and GM crops – who is really benefiting?'