Advanced biofuels for Europe

When it comes to forecasting future global energy needs, there seems to be a growing consensus emerging among experts and commentators. Simply put, we have a tremendous challenge in front of us. At BP, our own analysis, the recently-published BP Outlook 2030, describes a close to 40% increase in primary energy use over the next twenty years – the vast majority of which will come from non-OECD countries. Others, such as the International Energy Agency, have come to similar conclusions. That by itself should give us pause for thought, notwithstanding the needs to improve energy security, reduce man-made carbon emissions and keep energy affordable – all at the same time.

Transport, specifically, accounts today for approximately 20 per cent of man-made GHG emissions, and a number of countries are implementing reduction targets – the Renewable Fuels Standard II in the USA and the Renewable Energy Directive in Europe being two salient examples. It is in this context that we see biofuels, and in particular advanced biofuels, as an important part of the solution. There is out there a diversity of new, renewable, low carbon sources of energy – solar, wind, geothermal as well as biomass to name a few, However, while power production is blessed with a variety of choices, when it comes to creating the “portable” forms of energy that one can densify sufficiently to carry along in a car, plane or truck, the choices become fewer. As we all know, liquid forms of energy such as fossil fuels and biofuels hold an advantage thanks to the combination of energy density, easy handling and affordability that they offer. Combine this with the relatively high compatibility of biofuels with our existing fuelling infrastructure and cars, and you have - on paper - a very strong candidate for substitution of fossil fuels. The BP Outlook 2030 model projects that biofuels will grow to represent 9 per cent of global transport fuels by 2030, and contribute 40 per cent of the required growth in liquid fuels post 2020.

Of course biofuels in Europe are already a reality. At approximately 4 per cent penetration, they currently come almost exclusively from conventional, oft-called “first generation” feedstocks and technologies; namely, the fermentation of sugar or starch to produce ethanol, and the esterification of vegetable oils to produce “FAME” (fatty acid methyl esters).

While these conventional routes have played and are still playing a useful role, creating a market and taking a material first step on the journey to decarbonize transport, there is a growing realization – on both sides of the Atlantic – that more advanced technologies are needed if the potential of biofuels is to be exploited in a sustainable manner. Much controversy has surrounded the use of feedstocks such as palm oil, US corn or low-yielding rapeseed to produce conventional biofuels, and the concept of distinctive “Biofuels Done Well” is gaining ground.

To a large extent, this refers to biofuels which respect the essence of sustainability, the use of finite resources – land, water, ecosystem services - within our planet’s ability to replenish those. It plays into the wider and all-important topic of how to use land most efficiently, to ensure that there is enough land for food, fibre, biodiversity, energy as well as all the other uses of land.

Getting to 9 per cent of transport fuels consumption will require harnessing the power of science with boldness and vision. We can see three distinct themes for research and innovation, each one critical:

1. Feedstocks – or how to make the most of the land we have available to use for the production of energy.
2. Conversion – or how to produce, in a cheaper, larger-scale or less carbon-intensive way, the biofuels of the future. Also, crucially, how to unlock new types of biomass, such as cellulosic material, for the production of fuels.
3. Products – or how to make better quality molecules, carrying more energy or offering greater compatibility with the combustion engines of today and of the future.

Needless to say, there is a great deal of interplay between those three themes. Simultaneously developing high yielding, low-input cellulosic biomass and creating the bio-chemical conversion pathways to transform these more challenging sources of carbohydrates into high quality fuels, in a way which is economically competitive with fossil fuels, epitomizes the concept of advanced biofuels. A case of “walk, sing and chew gum”? Possibly, but something on which we are making great progress in our biofuels R&D facilities in the USA, Brazil and the UK.

A notable issue here is to produce biodiesel at scale. While sugarcane ethanol (today) and cellulosic ethanol (within this decade) are confidently seen as competitive with fossil gasoline, based on the track record of fuel pool penetration to date, ways to produce competitive bio-products for the diesel market appear significantly more challenged. As for the jet market, stringent quality requirements – making hydrocarbon molecules the only realistic option for bio-jet – add another layer of difficulty. The Holy Grail of bio-jet at $2 per gallon or even $3 per gallon appears to be very far off.

So if advanced biofuels is the goal, how do we get there? And what is the specific role of policy-makers and regulators in helping us get there?

At BP, we believe that research and development are a means to an end. Business performance is what, ultimately, we are driving at. When it comes to biofuels, this speaks to cost of course, but also to sustainability – efficient use of land and water, low carbon emissions – and importantly to scale. Now, biofuels don’t need to be technologically revolutionary in order to be high-performing – cue ethanol from sugarcane in Brazil, which passes all these performance criteria. However, since Europe – and indeed most of the world – is not blessed with the available land and tropical weather of Brazil, it is essential over here to promote the development of types of biomass and conversion technologies which best optimize the complex interplay and trade-offs of land, resources, cost, and other performance factors; and this is where the role of policy and regulation is key.

Rather than attempting to pick winners, it is about setting the metrics, setting the criteria for advanced biofuels, and about providing sufficient financial support to technology developers based on achieving these criteria. In our view, a major criterion should always be that biofuels have the clear and demonstrated potential to be competitive with crude oil – if not today, at least somewhere along their likely technology development curve. Consequently, we think of regulatory incentives as a transitory measure, designed to help carry the winning new technologies to self-sufficiency. Not only is this good fiscal policy, it is also the way to let the best solutions come to the fore.

The challenge in front of us is enormous – both technologically and economically. By way of comparison, the US ambition for advanced biofuels – specifically cellulosic biofuels – is to have 16 billion gallons of annual domestic consumption by 2022. The capital cost of building the production capacity for this will amount to tens of billions of US$. Even replicating a fraction of this American vision in Europe will take many years and cost billions of Euros, and can only be achieved with a strong and unerring political will. Has the time come for Europe to take a stance on the efficient use of its available land, and advanced biofuels in this context?