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 InternationalFood Policy Research Institute examines the potential opportunities andrisks bioenergy may create for poor people andfarmers in developing countries.

Total global energy consumption is expected togrow 50 percent by 2025. Most of the increase will occur in developingcountries. Finite supply of fossil fuels, andpolitical instability in oil-exporting countries are set to force oil prices upfurther. Bioenergy is an attractive alternative becausemany countries could grow their own and it is a renewable energy source thathas the potential to significantly reduce or at least slow growth in carbonemissions

Bioenergy already accounts for 10 percent of world energy supplies – 33 percent ofenergy use in developing countries but only 3-4 percent in industrialisedcountries. Brazil and the UnitedStates arethe largest producers of ethanol for transport, accounting for about 90 percentof world production. Ethanol has displaced 40 percent of gasoline use in Brazil. TheEuropean Union, especially France and Germany, isthe largest producer of biodiesel.

Bioenergy’s potential will increase as second-generation technologies becomeavailable, enabling more efficient conversion of cellulose-rich biomass. Thisshould help bioenergy compete in price with fossilfuels and also expand the range of what can be used, some of which (likefast-growing grasses and trees) can thrive in less fertile and moredrought-prone regions and are less competitive with food than current cropslike sugarcane, maize and rapeseed.

Bioenergy does have drawbacks:

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

Trade in biofuels still faces major barriersthat are not on the current agenda of the World Trade Organization. Domestic biofuel industries being nurtured in the USA and Europe may not be sustainablewithout trade protection. Leavingbioenergy development entirely to the private sectorwill lead to production processes that fail to achieve the best environmentaland social outcomes. National and international action is needed toencourage the bioenergy sector in countries with acomparative advantage – often developing countries with tropical climates.

It will beimportant to:

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