Related Articles
Forward article link
Share PDF with colleagues

Biofuels are the best way to cut transport emissions

Increased biofuels use is the best way to cut emissions from the transport sector says Shell

THE environmental credentials of biofuels have long been under debate, but Shell says they are the most effective way to reduce greenhouse-gas (GHG) emissions from road transport.

Shell launched its Raízen biofuels project, which produces ethanol from Brazilian sugarcane, in São Paulo state, Brazil, earlier this year. It claims using ethanol instead of conventional petroleum products in road vehicles could cut carbon dioxide (CO2) emissions by 70-90%. Raízen says 1 litre of ethanol produces 70-90% less CO2 than traditional gasoline on a full cycle basis: from the sugarcane field to the gasoline station.

"Biofuels represent the best way to take CO2 out of fuel supply," said Mark Williams, Shell’s downstream director. "It became clear to us several years ago that biofuels would become a larger part of the world’s fuel use, driven by energy security and environmental concerns."

Raízen, which is a joint venture between Shell and Brazilian company Cosan, aims to more than double its ethanol production, from 2.2 billion litres – around 1.6 million tonnes, or 38,000 barrels a day (b/d) – this year to 5 billion litres by the 2016-17 harvest. It wants to secure a 20% share of Brazil’s ethanol-production industry within seven to eight years. If Raízen achieves its target, it would become the world’s largest manufacturer of sugarcane-ethanol.

"We aim to transform ethanol into an international commodity," said Luis Osorio, Raízen’s vice-president of sustainable development. "To do this, our customers need to have the surety that the supply side will continue to grow. We need to enhance our production very fast."

Raízen says there is huge potential to increase sugarcane-ethanol production in Brazil. The company wants to increase its sugarcane crushing capacity to 100 million tonnes a year (t/y) in the next five years, up from around 65 million t/y now; and to increase its sugarcane plantation acreage to 1.4 million hectares up from 860,000 hectares.

Raízen has a production facility in Maracaí, in the eastern state of São Paulo, which also produces 4.4 million t/y of sugar and generates over 160 gigawatt hours (GWh) of electricity. More than half of this (90 GWh) is surplus to requirements and sold to the national grid.

Internationally, the company has big expansion plans, too. Osorio claimed there is huge ethanol demand in the US, California in particular, to reduce CO2 emissions in the transport sector and using ethanol could be the way to achieve this. He added that Europe is the "second-largest target market in the world", suggesting trans-Atlantic ethanol exports are part of Raízen’s long-term strategy.


Yet during the economic downturn it is uncertain whether global energy demand will support the levels of production Raízen wants to achieve. The International Energy Agency (IEA) and Opec have also both cut their global oil-demand forecasts for 2011, based on weak economic data in Europe and the US. Both have revised down demand predictions for this year, by 200,000 b/d and 150,000 b/d respectively.

And during the first five months of 2011, US fuel ethanol production increased by only 59,000 b/d, or 6.9%, compared with the same period in 2010, according to the US department of energy (DOE). This represents a slower rate of growth compared with last year, when production during the first five months was 29.7% higher than in 2009.

The DOE said slowing growth in US ethanol production is partly a result of "sluggish domestic demand", which grew by only 23,000 b/d, or 2.8%, during the same period. The DOE blamed lower gasoline consumption, which was down by 161,000 b/d, or 1.8%, in May 2011, compared with the same month a year earlier, reducing the amount of ethanol needed for gasoline blending.

Vehicle and infrastructure issues could also limit fuel ethanol sales growth. The number of road vehicles that can burn this type of fuel, usually a blend of 90% conventional gasoline with 10% ethanol, and the limited availability of ethanol refuelling stations will limit demand.

But by 2035 it could be a very different supply picture, according to the US Energy Information Administration (EIA). The EIA estimates oil sands production in Canada and biofuels production, mostly from the US and Brazil, will be "the most important components" of the world’s unconventional energy resources, comprising nearly 70% of the projected increase in global energy supply between 2009 and 2035. Biodiesel and ethanol will make up 54% of the growth in liquid-fuel consumption from 2009 to 2035, the EIA said.

But despite these forecasts, and Shell’s GHG-busting claims, biofuels have a poor reputation for environmental sustainability. First-generation biofuels were initially hailed as a new low-carbon form of energy, until a range of social and economic issues became apparent. Production is very land intensive and critics of the process say areas that could be used for growing food crops are usurped by biofuels crops, pushing food prices up.

Other issues include CO2 produced from burning the cane – a process that must be carried out when the crop is cut by hand – and concerns over deforestation, soil erosion and land-rights disputes with displaced indigenous communities.

Yet the IEA maintains that biofuels production can be sustainable. In a 2011 report, Biofuels for Transport, the agency said global biofuels consumption could be increased in a sustainable way using next-generation technologies to account for 27% of global transport fuels by 2050, compared with just 2% now. That would mean boosting supply to 750 million t/y from 55 million t/y today.

To achieve that target, between $11 trillion and $13 trillion must be invested in the sector over the next 40 years, the IEA claimed, adding that, with such large-scale investment, the cost of biofuel technologies could draw close to, or even fall below those for fossil fuels.

Some environmental campaigners remain unconvinced. Friends of the Earth says large-scale agrofuels production in Latin America is "totally unsustainable" and does much more harm than good. Some critics argue that, despite biofuels producing fewer GHG’s when they are burnt in vehicles, CO2 emissions generated in the growing and processing of crops, and the transport of the finished product counteract the benefits.

Shell’s Williams distinguishes between what he calls "good and bad biofuels" and claims Raízen’s project can provide a positive contribution to global energy supplies. "You have to penetrate a little deeper into the fog around biofuels to get to the story and to understand the difference between good and bad biofuels," he said.

Second Generation

"Many traditional biofuels are not particularly environmentally friendly, but Brazilian sugarcane-ethanol is a leading contender for lowering CO2," he claimed. "We have spent years trying to develop second-generation biofuels that don’t compete with food sources. The problem is scaling them up." Raizen has been producing second-generation biofuels from sugarcane in one of its laboratories, but said the cost of production remains too high to make it commercially viable.

Raízen president Vasco Diaz claimed Brazil’s deforestation problems are "nothing to do with sugarcane production" and maintained that illegal wood trading is the true cause. Raízen’s ethanol production uses only 2% of Brazil’s arable land, he added. "There are a lot of people who live in the Amazon in a destructive rather than a constructive way."

"There is huge demand for ethanol from sugarcane. Customers want to make sure they can rely on supply from Brazil," said Raízen’s Osorio. "It’s much more a supply demand problem than proving its environmentally friendly."

Also in this section
Kosmos sheds frontier portfolio
22 September 2020
Explorer divests non-core assets to cut costs and focus attention on proven basins
Latest licensing rounds
22 September 2020
The industry's most comprehensive list of current and recent rounds for onshore and offshore licences
Petrobras pulls back spending
18 September 2020
Spotlight falls on pre-salt production as Latin American NOC dials down capex