Why Biofuels

Biofuel is a category of renewable fuel that reduces greenhouse gas (GHG) emissions compared to diesel in the United States from around 50 percent for soy oil to more than 75 percent for yellow grease. Advanced biofuels that use wastes and biomass-to-liquids conversion can reach 120 percent reductions.^{1 2}

Renewable biodiesel and biodiesel blends of up to 20 percent can be used in diesel engines. Benefits also include reduction of some other types of emissions. However, it should be noted that biomass-based diesel alternatives can increase some emissions that cause air pollution, prices for fuel are currently higher than diesel, the fuels must be specced to local weather due to cold-flow properties, and supply and fueling infrastructure is not yet widely available.

Market Outlook

Biofuel growth is driven largely by regulated blending mandates that define quantities of biofuel that must be used in road-transport fuel. The federal Renewable Fuel Standard (RFS) mandated 1.28 billion gallons of biodiesel and 2.75 billion gallons of “advanced biofuels” that includes certain types of biodiesel and renewable diesel in 2013.³ California’s Low Carbon Fuel Standard (LCFS) also drives the market through credits and targets that many biofuel diesel alternatives are favorable in meeting.

In the United States, biodiesel contributed less than 5 percent of an estimated 4,500 trillion Btu’s total biomass energy consumed in 2013.⁴ Total annual U.S. production of biodiesel was estimated at 1.34 billion gallons in 2013, and imports comprised 525 million gallons.^{5 6} According to the International Energy Agency, by 2050, biofuels could provide 27 percent of total transport fuel.⁷

Average U.S. retail prices for 20 percent biodiesel (B20) blend of biodiesel and diesel were 3.8 percent higher than diesel in the five years since 2010, and 100 percent biodiesel (B100) biodiesel was 24.7 percent higher on an energy-cost basis.⁸ The price difference compared to diesel shrank by 1.9 percent for B20 and 2.7 percent for B100 compared to averages for the previous 10 years.^{9 10}

Vehicle Applications

Biofuel alternatives for diesel include biodiesel and renewable diesel. Biodiesel can be used in converted diesel engines or biodiesel engines and meets fuel specification requirements of ASTM D6751. Renewable diesel is a hydrocarbon “drop-in” fuel that meets the fuel specification requirements of ASTM D975.¹¹ Some Heavy Duty Vehicle (HDV) trucks use up to 20 percent biodiesel (B20) and there are around 300 fueling stations that offer B20 (excluding private stations) in the United States today, most of which are in the corn- and soy-farming region of the upper Midwest.¹²

Key Issues

Key Feedstock and Process Choices

Both biodiesel and renewable diesel can be produced from plant or animal oils, fats, and wastes. In the United States, soy oil made up 65 percent, corn oil was 7.5 percent, and yellow grease and white grease was less than 8 percent of production of 8,478 million pounds of feedstock inputs for biodiesel in 2013.¹³

Biodiesel is produced from a chemical conversion called transesterification to produce fatty acids (triglycerides). Oil-rich biomass or animal fats are reacted with alcohol with a catalyst to form methyl or ethyl esters and a glycerin byproduct.¹⁴ Blends of 5 percent biodiesel are common, but not universally available. Infrastructure for distribution and refueling of biodiesel remains a barrier. Additionally, cold-flow properties of biodiesel can cause blockage of fuel line filters if not specced to the right local weather conditions.¹⁵

Renewable diesel is produced through thermochemical transformation, the most common of which is called hydrotreating.¹⁶ Hydrogen replaces atoms of the biomass or animal fats with hydrocarbons that can then be used as a fully renewable diesel or blended with petroleum diesel.

Second-generation biodiesel can be produced in similar ways as first-generation fuels through thermochemical and biochemical routes.¹⁷ The Fischer-Tropsch process, more commonly used for coal to liquids and gas to liquids, can be used to convert biomass from crops or waste products to biodiesel. BioDME (dimethyl ether) can be produced via catalytic dehydration of methanol or directly from syngas.¹⁸

Key Sustainability Opportunities and Impacts

Opportunity: Climate Change

According to the latest published life-cycle analysis for various feedstocks and the feedstock mix reported by the Energy Information Administration and the U.S. EPA for 2013, the average GHG reduction for biomass-based diesel exceeds 80 percent.^{19 20 21} As such, certain types of biodiesel and renewable diesel generate favorable low-carbon credits under both the federal RPS and California’s LCFS. If biofuels provided just over a quarter of transport fuel in 2050, it would avoid an estimated 2.1 gigatons of GHG emissions per year when produced with best sustainability practices.^{22 23}

Opportunity: Renewable Fuels

Biofuels are among the few fuels for medium- and heavy-duty trucking that are renewable. Renewable fuels can be produced by the agricultural sector (planted crops and crop residues) and the non-agricultural sector (planted trees and tree residues, animal waste material and byproducts, slash and pre-commercial thinnings), according to the EPA.²⁴

Impact: Air Pollutants

Transportation related emissions are estimated to be responsible for about half of deaths from outdoor air pollution, which is now the biggest environmental cause of premature death, resulting in an estimated 110,292 deaths in the Unites States in 2010.²⁵ These impacts are largely the result of tailpipe emissions that include suspended particulate matter, nitrogen dioxide, benzene, and other pollutants.²⁶ Research suggests that biodiesel could produce higher NOx, hydrocarbon, acetaldehyde, and ethanol emissions and lower carbon monoxide, and benzene emissions compared to diesel from fossil fuels.^{27 28}

Impact: Biodiversity

Increased biofuel production can result in large impacts on biological diversity through land conversion, introduction of invasive species, and the soil and water impacts common to agriculture. Studies have shown that substantially increased biofuel production can result in habitat loss, increased invasive species, and nutrient pollution, especially if crop production replaces native forest.^{29 30} Biofuels from palm oil are of particular concern by some global environmental stakeholders.^{31 32}

Key Uncertainties and Unresolved Issues

Uncertainty: Direct and Indirect Land-Use Change (ILUC):

The science for characterizing impacts of emissions from land use is emergent, however recent advances in modeling and new standards and regulation have increased clarity on the issue. Advances in modeling have also enabled a likely range for impacts of indirect land use of 13.4-42.3 gCO₂e/MJ for soy biodiesel in a recent California Air Resources Board (CARB) analysis.³³ While increased use of lifecycle assessment improves our understanding of land-use change from biofuels, methodologies are not yet standardized, leaving this question still unresolved.

Uncertainty: Food and Commodity Competition

In the United States, study results of commodity competition for biofuel feedstocks vary. The question of biofuel’s impact on food illustrates the variation: Some studies claim that biofuels production increases food production from co-benefits and efficiencies, others show modest influence on food prices, still others claim that large-scale biofuel production would divert land from producing food needed to feed the world.^{34 35 36} Most studies show that impacts are minimal, and biofuels regulation addresses the issue, but more information is needed to resolve this entirely.

Uncertainty: Human Rights

Biofuel projects are at risk for the same human rights challenges faced by the agricultural sector broadly (e.g., treatment of labor and workers). Exploitation sometimes includes unlawful child labor and migrant workers. Additionally, land-use conflicts and tension with traditional livelihoods are other important factors that have the potential to produce human rights challenges.

Uncertainty: Water Availability

Certain biofuels consume more water than any type of fuel energy, though there are notable variations by feedstock type, fuel pathway, and irrigation patterns. The freshwater intensity of biofuels from soy and corn can be two orders of magnitude larger than average freshwater consumption for the oil-to-liquid fuels supply chain (primary recovery).^{37 38} Over 90 percent of biofuels’ water consumption impacts are related to farming crops. Yet the regions and crops that matter most to North American fuel users in the near term are mostly low- or no-irrigation crops.^{39 40 41}

Sustainability Potential

Best Case

Advanced biomass-to-liquids (BTL) conversion using non-food feedstocks or agricultural waste products and counting co-products reduces GHG emissions 120 percent compared to diesel. Biofuel approved under either the U.S. federal Renewable Fuel Standard (RFS) or the California Low-Carbon Fuel Standard (LCFS) would avoid direct land-use, biodiversity impacts, and much commodity competition and potentially indirect land-use. Biofuels produced from feedstocks in rain-fed agricultural regions of the United States would ensure minimal water availability impacts. Zero-emissions controls can eliminate other air pollution during vehicle operation.

Best Practices

Source Sustainable Biofuels

Fuels qualified for either the RFS or LCFS provide high assurance of sustainability and, in the case of LCFS, life-cycle emissions intensity from specific feedstocks and production pathways. The Natural Resources Defense Council produced a report on biofuel sustainability certifications that highlights Roundtable on Sustainable Biomaterials (RSB) as an exemplary market-based standard.⁴² All three avoid direct land use, consider indirect land use, and prevent use of unsustainable palm oil.

Prioritize Lowest-GHG Biofuels

Biofuels from plant and animal wastes such as tallow, cooking oil, and second-generation biomass-based diesel alternatives from biomass-to-liquids offer highest lifecycle GHG benefits. Fleet owners and OEM’s can take advantage of state and federal incentive programs to pilot new technology. Once fleet owners are satisfied with fuel availability regionally and vehicle technologies, they can roll out on small scale in those areas.

Apply Fleet Efficiency and Emissions-Control

Since the introduction of catalytic converters and improved fuels to enable them in the mid-1970s, there have been significant reductions in tailpipe emissions. Risks to human health from diesel exhaust in North America have been drastically reduced as a result. New telematics enable fleet efficiency, while numerous innovations in vehicle design have increased fuel economy, and built-in technologies help capture tailpipe emissions.

Make Off-Take Agreements

Companies may also consider creating off-take agreements for low-carbon biofuels as part of a program to develop reliable markets for biofuel suppliers. These options can help advance these industries in the early stages of commercialization.

Use Biofuel-Diesel Blends

Diesel blends that utilize up to 20 percent biodiesel (B20) are compatible with standard diesel engines. Fleets in the Midwest, especially, can benefit from the approximately 300 publicly available stations, and fleet owners in those regions can invest in private fueling infrastructure that takes advantage of the regional biodiesel processing and distribution system.

Support Policy that Builds Biofuels

The IEA projects all biofuel can offer a 50 percent GHG reduction from fossil fuel diesel with proper policy incentives. To realize these benefits, these policies must be designed to maximize GHG reductions and minimize other sustainability impacts, which the EPA’s Renewable Fuel Standard II and California’s Low Carbon Fuel Standard programs are intended to do.