The controversy surrounding first generation biofuels has not deterred three international companies – BP, DuPont and AB Sugar - from investing in a new plant to convert wheat into bioethanol, a renewable transport fuel added to petrol at the pump. A profitable by-product will be 500,000 tonnes of high-protein animal feed annually, enough to feed a fifth of the UK's dairy herd.
“The start-up of the plant is important to the UK, environmentally, socially and economically”, said Phillip New, vice president for alternative energy at BP. “Vivergo is one of Europe’s most sophisticated ethanol plants – and it is a great example of today’s biofuel technology.”
BP has invested more than $2bn in biofuels research, development and operations since 2006, said Olivier Macé, head of strategy and external affairs at BP Biofuels. In addition to Vivergo, BP has mills in Brazil producing ethanol and renewable electricity from sugarcane as well as another joint venture with DuPont to produce biobutanol. It also funds a flagship biofuels technology centre, the Energy Biosciences Institute at the University of California, Berkeley, where bio-scientists and engineers focus on commercialising cellulosic biofuels.
Vivergo will produce bioethanol from 'feed' grade wheat, widely grown in the UK for animal feed. Sixty per cent of the wheat is starch, which can be fermented into alcohol for bioethanol production, and the remaining forty per cent is converted into animal feed.
BP estimates that Vivergo’s ethanol will reduce greenhouse gas emissions by over fifty per cent versus fossil fuels, said Macé.
At 420 million litres per annum, Vivergo will become the largest bioethanol producer in the UK and one of the largest in Europe. The plant offers each of its co-founders access to new expertise and markets, such as BP's fuels technology knowledge and access to major fuel markets, AB Sugar's experience in the agricultural value chain and links to feedstock supply and animal feed expertise, and DuPont's biotechnology and bio manufacturing capabilities, said Macé.
Use of bioethanol in transport
The EU has set a target that ten percent of all transportation fuels should come from renewable sources by 2020. To achieve this, the UK has implemented the Renewable Transport Fuel Obligation (RTFO), requiring fossil fuel suppliers to provide evidence that a percentage of fuels for road transport come from sustainable renewable sources.
Despite a growing array of other forms of transport energy such as electric vehicles, plug-in hybrids and compressed natural gas, Vivergo says, “it is widely accepted that these alternatives will not make a material difference until at least 2030. Demand for liquid fuel will continue to soar globally, largely due to our reliance on the internal combustion engine”. Vivergo sees biofuels, already accounting for approximately four per cent of transport fuels, as the “main vehicle” for achieving the 2020 target. “At 420 million litres per annum, Vivergo's production capacity will represent around a third of the UK's 2012/13 requirements under the RTFO”, said the company.
Vivergo estimates the bioethanol industry could be worth at least £1bn per annum to the UK economy by 2020. The size of this market, however, could be affected by a crucial vote in the European Parliament’s Environment, Public Health and Food Safety Committee this week on a proposal to limit the share of first-generation biofuels to EU transport energy to five per cent. Policy makers have switched their focus to second-generation fuels made from non-food sources, such as waste material, agricultural residues, grasses or algae.
The proposal stems from fears that first-generation biofuels, which are derived from food-based sources such as starch, sugar, and vegetable oil, have displaced food production into new areas, leading to deforestation, increased greenhouse gas emissions and food shortages. Macé seeks to allay fears, saying only two per cent of the land available to grow crops globally is used in biofuel production, and the use of wheat for bioethanol production in the EU equates to only 0.6 per cent of global wheat production. “Recent findings by the World Bank in May 2013 suggest that high oil prices are the most important driver of the increase in global food prices,” he said.
The Commission has also responded to concerns about greenhouse gases released indirectly as a result of uncultivated land coming into production for biofuels – a phenomenon known as indirect land use change (ILUC). The institution has thus proposed to introduce “ILUC factors” into the EU greenhouse gas calculations to take account of emissions released during deforestation, draining of peatlands and other land clearance for biofuels.
While environmental interest groups have lobbied strongly for this, BP is concerned by the lack of certainty for investors, said Macé. “We believe that any outcome using indirect land use change factors as a regulatory mechanism would be based on disputed modelling and immature science, which is inappropriate and potentially very damaging to our industry.”
Clare Wenner, head of renewable transport at the UK Renewable Energy Association (REA), said "No other land-using industry is being forced to account for ILUC, and biofuels, which are the only viable way of significantly reducing greenhouse gas emissions from our transport, should not be used as a guinea pig for ILUC accounting. Singling out crop-based biofuels would ultimately be counter-productive, as the biofuels market has been a great stimulus for investment in agriculture, which is critical if the world is to feed a growing population."
Promising news for BP and Vivergo, however, is a recent vote in the European Parliament’s Industry, Research and Energy Committee (ITRE), in favour of a specific 2020 advanced biofuels target and a six point five per cent crop-based biofuels cap, and against the incorporation of ‘ILUC factors’.