The next step: Mixing biofuels with fossil fuels

1. What new themes emerged this year in the field of biofuel research?

Zilberman: Three new themes emerged this year:  The discovery of new and abundant natural gas resources on the future of biofuel. In particular, it was suggested that it may be useful to use natural gas for methanol and then methanol and ethanol can be combined as an alternative fuel. If this were to happen, then the government needs to develop incentives to adopt flex fuel vehicles.

Possibilities to address some of the food/fuel conflict associated with second-generation by increased reliance on double-cropping in the US. Double-cropping has been important in the production of grains in Brazil and Argentina which suggests that increased demand for agricultural products that is associated with biofuel, increases productivity which is beneficial in the long-run.

While it is clear that the second-generation has great potential, the timing and specifications of viable second-generation technologies are still uncertain. There have been already major breakthroughs that reduce the cost of the technology and at the same time there are several novel feedstocks to be considered.

2. What new topics do you expect to emerge as dominant questions over the next five years?

Zilberman: I think that co-evolution of biofuel with natural gas will be an important topic. Natural gas will play an important role in fueling vehicles and it may slow the spread of biotechnology [fuels] but I think that we will see a nice process of co-evolution of the two types of fuel.

This will [be] part of a bigger topic which is identifying a portfolio of fuels. We are going through a transition where we will mix various fossil fuels with biofuels. There will be a lot of experimentation that will depend on a lot of policies. The creativity in the biofuel field, both in terms of research and policies is to mix different sources of fuel in a way that will be economically efficient that will not be cumbersome to the consumer and will be environmentally sustainable. To some extent, we operate under some uncertainty and therefore research, creativity and entrepreneurship is very important.

A third topic is the future of biofuel policies, to what extent second-generation will be subsidized and to what extent will the government keep its biofuel targets. The value of subsidizing second-generation will be an important area of research.

A related topic is the environmental regulation of biofuel. To what extent will people use renewable fuel standards, a low-carbon fuel standard? Will they be integrated with a more general GHG [greenhouse gas] policy? I think the future of GHG policy will determine the details of biofuel policy.

3. What have we learned about the issues surrounding the economics of biofuels over this period. For example, is there anything that was once debatable now pretty well established or was something that was established now looked at quite differently?

Zilberman: First-generation [biofuels] (using corn in the U.S. and sugarcane in Brazil) has become economically viable due to increased productivity and learning by doing. At the same time, biodiesel in Europe (soybean, rapeseed) and development of economically viable biodiesel is a challenge.

At least in the U.S., the biofuel policies worked in producing a viable first-generation industry. Continuing the mandates is important while subsidies for first-generation should stop (now that it is competitive) but a mandate and a subsidy for second-generation are needed.

Today the U.S. capacity to absorb new biofuel is limited by the blending walls as well as the limitations of the vehicle fleet. Revamping the blend wall and introducing policies to encourage flex fuel vehicles are needed. 

Indirect land use effect of biofuel is positive but much less significant than earlier. It is much less for corn than for soybean. They are also very uncertain. There are also other types of indirect effect. Introducing indirect effect of biofuel regulation is questionable and will be subject to continuous debate.

4. Anything you wish to add?

Zilberman: Policies and regulations have been the largest constraint for the development of biofuels. With smart policies, biofuel can reduce our dependence on fossil fuels, improve environmental quality, and be a mechanism to improve the well being of the farm sector as well as developing countries. First-generation, especially sugar cane is far from reaching its limits and I am encouraged by what I’m seeing of second-generation as we move for sustainable and renewable fuels.

The interview is an edited version of an interview published following the 2012 Berkeley Bioeconomy Conference, sponsored by the Energy Biosciences Institute. The full version can be found following the link below: http://www.energybiosciencesinstitute.org/news/2012-ebi-bioeconomy-conference-q-and-david-zilberman

The Energy Biosciences Institute (EBI) was formed in 2007 by BP at the University of California, Berkeley campus, in partnership with the Lawrence Berkeley National Laboratory and the University of Illinois at Urbana-Champaign. The Institute received $500 million in funding for a 10-year research effort focused on the development of cellulosic fuels (derived from non-food plants) and fossil fuel microbiology.