AAAS Center for Science, Technology and Congress

AAAS Policy Brief: Biofuels

Issue Summary | Resources

In an era of rising energy insecurity and growing public concern over climate change, the United States and other world leaders are increasingly turning to biofuels as the alternative energy source to traditional fossil fuels. The Administration has made biofuels a central part of its Advanced Energy Initiative and Congress is addressing the subject through a number of legislative vehicles. Key areas under discussion include:

Recent News
Sources of Biofuels
Meeting the Demand
Food v. Fuel
Environmental Impacts
Infrastructure
The Economics
Policy Approaches and the State of R&D

Recent News

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Sources of Biofuels

Biofuels, derived from plant or animal materials ("biomass") such as corn, sugar cane, and perennial grasses, provide a stored source of solar energy that can be used as a transportation fuel. Though the term biofuels has recently become synonymous with ethanol, it also covers fuels such as biodiesel and biobutanol.

Currently, ethanol is blended into most conventional gasoline fuel because it enhances the octane level of gasoline, which improves air quality. Conventional vehicles are capable of running on E10, a 10 percent ethanol and 90 percent gasoline blend. Fuel mixes with significantly high levels of ethanol such as E85 (85 percent ethanol and 15 percent gasoline) require flex-fuel vehicles that are equipped with alcohol-tolerant parts such as stainless steel fuel tank and Teflon-lined fuel hoses.¹

First-generation ethanol biofuels are produced using sugar and starch biomass primarily from corn and sugarcane. According to the National Corn Growers Association, the overwhelming majority of ethanol produced in the United States is corn-based. The benefit of corn-derived ethanol is that the process of refining corn grain into fuel is available now and more biorefineries are coming online, even outside traditional corn growing states. In 2006 there were 110 biorefineries across 19 states producing 4.9 billion gallons of ethanol, with 73 biorefineries under construction that would add an estimated 6 billion gallons of new production power by 2009.²

Sugarcane, which also produces first generation ethanol, is a simple sugar that uses a process that is faster and less expensive to convert to ethanol than corn.³ Sugarcane is currently grown in over 100 countries⁴ and requires a tropical environment to thrive. Brazil, the world's second largest producer of ethanol, uses sugarcane ethanol.

Cellulosic ethanol, based on a complex carbohydrate material, is considered a second-generation fuel still under development. Cellulosic ethanol is derived from non-grain parts of plants including switch grass, prairie grasses, trees and forestry waste. Though industry's attitude toward cellulosic ethanol has grown increasingly optimistic, no commercial production plants currently exist and additional research and development (R&D) is required before it can enter the commercial marketplace.³ Nevertheless some industry leaders have stated that commercialization of cellulosic ethanol plants is not far off, as several demonstration biorefineries are already online. Recent government initiatives aiming to boost cellulosic ethanol may also add production capability.

Proponents of using trees as cellulosic feedstock have argued that it is one of the best biomass sources available because it is already supported by the fully matured lumber and pulp industry infrastructure systems. Proponents also note that trees and other cellulosic feedstock do not compete with food crops; however, the counterargument is that tree-based cellulosic ethanol could potentially compete with the pulp industry.

Biobutanol has been in existence longer, though its higher price has put it at a competitive disadvantage. It can be derived from either cellulose or conventional feedstock such as sugar and corn and differs from ethanol in the way the feedstock undergoes fermentation. The benefit to biobutanol is that it has a higher energy density (26.9-27.0 megajoules per liter) than ethanol (21.1-21.7 megajoules per liter), though still not as energy dense at gasoline (32.2 -32.9 megajoules per liter).⁵ Biobutanol's higher energy efficiency gives it an advantage over ethanol, which has been handicapped by its significantly lower energy content per gallon as compared to gasoline. Industry giants BP and DuPont formed a partnership in 2003 to develop and commercialize what they consider the next generation of biofuels in biobutanol.

Biodiesel, the alternative to petroleum diesel, is derived from palm oil, animal fats, and oilseed crops such as soybean. While the biodiesel industry is still relatively small in the United States, Europe imports large quantities of palm oil from Southeast Asia and is the world's leading producer of biodiesel.

Less common feedstock includes algae, waste vegetable oil and halophytes, or saltwater plants. For a variety of reasons including lack of efficient technology and sufficient supply, these feedstock have not been pursued at a large scale and are far from commercialization, though they continue to be researched.

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Meeting the Demand

According to the Renewable Fuel Association the United States consumes about 140 billion gallons of gas each year but currently produces only about 5 billion gallons of biofuels a year. In his 2007 State of the Union Address, President Bush unveiled a new energy policy initiative: Twenty In Ten: Strengthening America's Energy Security, a policy intended to reduce U.S. gas consumption by 20 percent in ten years. While President Bush has planned to meet this goal by increasing America's biofuel production to 35 billion gallons a year by 2017, some remain skeptical that this goal can be reached given America's agricultural capabilities and resources. Key agriculture and energy executives speaking at the USDA Agriculture Outlook Forum in early March expressed their skepticism about the ability of corn to achieve the Administration's goals while voicing concerns over the rising price of corn used for food due to ethanol production.

One study by the USDA suggests that the United States has enough forestland and agriculture acreage to produce the amount of biomass, 1.3 billion tons a year, required to meet 30 percent of the country's gasoline demand while still meeting food demands. The study notes that replacing grain crops such as corn with perennial crops would increase biomass production. It also suggests that negative environmental impacts such as land erosion are likely to occur with biomass production of this scale.

Industry leaders and academics suggest that the best strategy to optimize biofuels production is to manage a diverse portfolio of feedstock that include corn, perennial grasses, wood, and others that will utilize all available land. They also suggest that biorefineries designed to process assorted biomass, as opposed to a single source, will be most efficient in reaching these goals.

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Food v. Fuel

One of the central concerns for many is that biofuels made from food crops such as corn compete with food. The United States provides almost 40 percent of the world's total corn production, distributing food domestically as well as internationally, particularly in poorer countries. In addition, corn is the feedstock for much of the dairy, meat and poultry industries. Many experts fear that the high demand for corn in the biofuels industry is raising the price of corn, with resulting increases in the price of food in the U.S. and abroad. In March 2007, corn prices rose to $4.38 a bushel, the highest in ten years. As a result, the meat, poultry and hog industries are expected to produce less meat in the coming year in order to increase prices and offset industry costs. Considering soaring biofuels production worldwide, the International Food Policy Research Institute suggests that corn prices may increase 41 percent by 2020.

Some economists worry that the biofuels production may also inflate the price of other grains such as rice and wheat if farmers begin to replace these cheaper crops with highly-demanded corn. One example is cassava, sub-Saharan Africa's high starch staple food, which is being targeted for ethanol production. The price of cassava is predicted to swell by 33 percent by 2010 and escalate to higher prices in years to follow.⁶

On the other hand, proponents of corn-based ethanol refute these arguments as exaggerations. They argue that science and technology has evolved and will continue to improve the efficiency of growing corn, allowing corn growers to produce more corn on the same amount of acreage.

In addition to concerns about rising prices, some question the efficiency of using corn as a fuel rather than a food. According to Foreign Affairs, a 25-gallon tank full of 100 percent ethanol requires over 450 pounds of corn, which amounts to a year's worth of adequate caloric intake for one person. Individuals making a case for cellulosic ethanol have pointed out that switching to cellulosic ethanol production would enable the food and fuel industries to utilize different parts of the corn plant thereby reducing competition.

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Environmental Impacts

Biofuels have gained attention in recent years as a way to reduce fossil fuel emission that contribute to global climate change; however, the ability of corn-based ethanol to lower contributions of greenhouse gases is called into question. Biofuels discharge significantly less CO₂ when burned than conventional fossil fuels. However, CO₂ reductions are less substantial when the life cycle emissions of the biofuel, rather than just the CO₂ emitted from tailpipes, is taken into account. This would include the energy required to produce, harvest, and transport the fuel.

Corn-based ethanol requires high amounts of energy, water and fertilizer. In addition, corn-based ethanol stores only two thirds of the energy content of oil, meaning that more biofuels are needed to travel a comparable distance. Scientific studies have found that corn does indeed use more energy than other feedstock, producing only 25 percent more energy than it consumes.⁷

A recent study performed by the USDA suggests that corn-based ethanol reduces greenhouse gas emissions by 40 percent. Another study conducted by the University of California, Berkeley estimated less CO₂ reduction from corn ethanol, only 15 percent less than gasoline.⁸

In contrast, less water and energy intensive feedstock such as cellulose emit 82 to 85 percent less CO₂,⁹ reducing emissions by about 115 percent.¹⁰

Environmental advocacy groups have argued that biofuels production will only be sustainable if environmental aspects are taken into account when policies and production plans are made. As biofuels become widely accepted and produced, environmentalists fear that improper land use practices will lead to deforestation, groundwater pollution and devastation of protected parklands.

The use of fertilizer for corn has raised environmental concerns. Fertilizer contains heavy levels of nitrogen, which can lead to groundwater pollution and "dead zones," or areas of extremely low oxygen as found in the Gulf of Mexico.

Increasing scale of production raises environmental concerns about other types of biofuels. Biofuels feedstock production has increased across the globe, for example, tripling Indonesia's palm oil production in a single decade. Environmentalists are troubled by the vast deforestation occurring in Southeast Asia to make way for oil palm production. They argue that biodiesel made of palm oil produced on deforested land hurts rather than helps the struggle against global warming. Recent reports of protected forest lands in Uganda being sold to an ethanol company have also fueled serious alarm in the environmental community.¹¹

In a similar manner, the demand for biofuels could reduce currently-protected areas in the United States. A chief economist at the United States Department of Agriculture (USDA) said in his testimony¹² to the Senate Committee on Environment and Public Works in 2006 that the Conservation Reserve Program (CPR), which sets aside 36 million acres of land for conservation purposes, could be utilized for extra production in the future. 4.6 million acres of these CPR lands have already been taken out of the program and put into production this year.¹³ However, according to the USDA most of the acreage needed by corn producers will most likely come out of land devoted to soybean production rather than the CPR.¹⁴

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Infrastructure

In response, recent efforts have been made to encourage biofuels technology that is compatible with existing infrastructure. H.R. 547, The Advanced Fuels Infrastructure Research and Development Act passed by the House on February 8, 2007, aims to address infrastructure issues by directing the Environmental Protection Agency (EPA), Department of Energy (DOE), and National Institute of Standards and Technology (NIST) to initiate R&D in biofuels that are compatible with current infrastructure.

House Majority Leader Hoyer (D-MD) unveiled his bill, the PROGRESS Act (H.R. 1300) that would expand biofuels infrastructure and investment. Senators Tom Harkin (D-IA), Barack Obama (D-IL), and Richard Lugar (R-IN) have introduced the American Fuels Act of 2007 (S.23), meant to improve biofuels distribution systems, increase biofuel production, and promote biofuels-capable vehicles through tax credits .

In addition to issues transporting ethanol to gas stations, there are also issues surrounding the transport of the feedstock to the biorefinery. While corn is grown in the Mid-West, the fuel it produces is generally used in areas further away, increasing transportation costs. Cellulosic ethanol pants do not need to import their feedstock from long distances; therefore they can be located closer to their points of distribution.

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The Economics

Though there are many varieties of biofuels, the United States has invested most heavily in ethanol. A 51 cent per gallon ethanol blenders' tax credit established in 1978 and the 54 cent per gallon import tariff established in 1980¹⁵ were put in place to protect the domestic ethanol industry. In 2007 federal subsidies for ethanol blenders is expected to reach $4.4 billion.¹⁶

Many continue to argue corn-based ethanol independent of government subsidies and tariffs is not competitive in the energy market, though that could change in a carbon-constrained economy. Producing ethanol from sugarcane, as done in Brazil, is cheaper than corn-based ethanol production because it produces twice as much energy while utilizing the same amount of land and does not require expensive enzymes to break it down. The Administration has also formed an agreement with Brazil to increase ethanol production in the Caribbean and Central America, which may reduce costs as worldwide supply increases.

Some industry experts have noted that it is difficult for growers to produce biomass for cellulosic ethanol production instead of corn because government subsidies and a ready market provide too many incentives to grow corn. The cellulosic ethanol market is underdeveloped and technology has not yet produced a commercial plant, therefore experts say growers have few incentives to grow cellulosic biomass even though it may prove to be the crop of choice in the near future.

Despite suggestions that corn may not be the answer, many Members of Congress serving the Corn Belt states as well as many presidential hopefuls continue to protect and promote the corn-based ethanol industry. For example, removing tariffs on foreign ethanol is believed to undercut the American farmer. While some Members argue that removing tariffs and subsidies will hasten the use of biofuels in America by making the fuel more affordable, others claim that the tariffs and subsidies in place are vital for growing America's young biofuels market. They also point out that U.S. dollars should be invested in domestic energy production rather than abroad.

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Policy Approaches and the State of R&D

Industry leaders are stressing the need for more efficient production as well as the debut of second and third generation technologies. They are calling for more R&D into increasing crop yields and investing in research that will develop crops with favorable characteristics to facilitate the fuel conversion process.

Work on conversion technologies is also important for cellulosic ethanol, which depends on enzymes to convert cellulose into sugars. R&D in cellulosic ethanol is focused largely on reducing lignin and increasing cellulose, to make cellulosic biomass a more efficient feedstock. Experts say that one of the reasons cellulosic ethanol has not fully commercialized is because the conversion process is too costly and slow. Cellulosic biomass contains cellulose, the molecules that will be converted to ethanol, and lignin, the material that provides structural foundation of plants. Consequently lignin locks cellulose molecules firmly in place, making them difficult to break down for ethanol production. Work currently underway in some biomass companies includes modifying trees to exhibit more of the favorable characteristics naturally found in trees such as genes that hamper the growth of lignin, encourage faster germination and increase cellulosic content.

Congress and the Administration are responding to industry and expert recommendations with a variety of policy approaches. In February of 2007, the Department of Energy (DOE) announced it plans to invest $485 million in six cellulosic ethanol plants over the next four years in an effort to encourage commercialization of cellulosic ethanol.¹⁷ A month later, the DOE announced that it would invest another $23 million in five cellulosic ethanol conversion projects.¹⁸ The projects are intended to research ways to improve cellulosic conversion into fuel, making it a more cost effective process.

The Bush Administration's 2007 Farm Bill proposal provides an additional $1.6 billion for cellulosic ethanol energy research over the next 10 years and includes guaranteed loans for cellulosic projects. In addition, the President's FY2008 budget includes a 26 percent hike from the FY2007 level for the Advanced Energy Initiative, $179 million of which is allotted for the President's Biofuels Initiative which focuses overwhelmingly on ethanol. Senator Saxby Chambliss (R-GA) introduced the Cellulosic Ethanol Incentive Act of 2007 (S.386), which would require the Clean Air Act to include a higher cellulosic ethanol fuel standard by 2030. In addition Senators Bingaman (D-NM) and Domenici (R-NM) introduced the Biofuels for Energy Security and Transportation Act of 2007 (S.987) that would increased R&D funding by 50 percent between 2007 and 2009, and provide for several new bioenergy research centers throughout the country.

The private sector has also started investing in R&D; ConocoPhillips plans to establish an eight-year, $22.5 million research program at Iowa State University that will focus on conversion technology and improved crop production. BP is granting $500 million to University of California, Berkeley to establish The Energy Biosciences Institute. The Institute is intended to discover and develop biofuels technologies and improve crops.

Despite the noise generated by the environmental community in terms of environmental impacts of biofuels, environmental concerns have generally not shown up in legislation.

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Endnotes

¹ Renewable Fuels Association E85 Page
² Renewable Fuels Association Industry Outlook 2007
³ Science, 16 March 2007
⁴ WWF Better Sugarcane Initiative
⁵Biofuel Review, 20 April 2007
⁶Foreign Affairs, May/June 2007
⁷Science Daily, July 2006
⁸"Ethanol Can Contribute to Energy and Environmental Goals" Alexander E. Farrell, Richard J. Plevin, Brian T. Turner, Andrew D. Jones, Michael O'Hare, and Daniel M. Kammen
⁹Foreign Affairs, May/June 2007
¹⁰"Cellulosic and Grain Bioenergy Crops Reduce Net Greenhouse Gas Emissions Associated with Transportation Fuels" Paul R. Adler, Stephen J. Del Grosso and William J. Parton
¹¹ New Scientist.com News Service, April 2007
¹² Dr. Keith Collins, Chief Economistm U. S. Department of Agriculture. Senate Environment and Public Works Committee Testimony (6 September 2006)
¹³ National Journal, 14 March 2007
¹⁴ University of Arkansas Division of Agriculture News, March 2007
¹⁵ Renewable Fuels Association
¹⁶ National Journal, 14 March 2007
¹⁷ Department of Energy, 28 February 2007
¹⁸ Department of Energy, 27 March 2007

Updated January 6, 2009