Page 32 - Biofuels for a More Sustainable Future

26 Biofuels for a More Sustainable Future

geographically widespread, and new power plants have to be constructed for
their treatment, the production of biofuels can potentially create new
employment opportunities, increase income, and supply local goods and ser-
vices (Demirbas, 2017). In addition, economic benefits of biofuels produc-
tion range from value added to feedstock and market opportunities for
exceeding crops, to investments in new plants and equipment, new jobs
and income opportunities for rural communities, and reduced dependence
of local and national economy from conventional fuels imports.
In spite of these advantages (in terms of environmental sustainability), the
current demand for biofuels relies heavily on policy support, such as oblig-
atory quotas (Horvat et al., 2017; further explained in Section 4), due to their
low competitiveness (with respect to conventional fuels) related mainly to
production and processing costs, and technological infrastructures for sec-
ond and third generation biofuels.
Biofuels production costs are determined by several factors including the
type of feedstock, agricultural practices in terms of land and labor costs, pro-
cessing technologies, and plant size. The latter is particularly important with
regard to economies of scale; due to uncertain availability of biomass
resources, power plants are typically built for small-scale operations. More-
over, biofuels have low energy density and high costs of collection and trans-
portation of biomass.
Overall, the costs of producing biofuels in OECD countries are three
times higher than conventional fuels; unlike developing countries, where
the production costs of biofuels are close to those of conventional fuels
(Demirbas, 2017) due to the large availability of domestic biomass, low levels
of per capita consumption, and low cost of labor (Gomiero, 2018).
To reach the 6% reduction target for GHG emissions for fuels and
expand the market for biofuels, fuel-blending obligations and subsidies have
been introduced. However, the maximum percentage of biofuel content in
petrol and diesel compatible with engines and vehicles is 10% (COM, 2017,
284 final). For higher blends and other marketing options, new vehicle
standards, adaptation of engines and vehicles, and new fuel distribution
infrastructures are needed.
In the United States, biofuels are not competitive even when a barrel of
oil costs more than US$100 (Gomiero, 2018). Additionally, conventional
fuels price fluctuations strongly influence the development and marketabil-
ity of biofuels (Morone and Cottoni, 2016). Therefore economic subsidies
and environmental obligations remain fundamental supporters for biofuels
development. All in all, the demand for biofuels is expected to increase
up to 37% by 2040 ( Joshi et al., 2017; IEA, 2014).