One of the renewable energy sources that's attracted a lot of attention is biodiesel, obtained by converting the fats and oils in agricultural products into a burnable diesel fuel. At the moment, a lot of biodiesel production occurs in small-scale pilot programs, but a report completed by the University of Wisconsin's Center for Sustainability and the Global Environment (SAGE) indicates its global potential is enormous: over 400 billion liters annually, well more than double the amount of diesel the US burns every year. The report also provides a detailed look into what may be more significant questions: can this potential be realized and, if so, how?
The report lays out a compelling rationale for a focus on biodiesel. The fuel can be refined from existing sources of lipids using a process that operates at normal atmospheric pressures and temperatures, and can work across a range of scales from local to industrial. Production works with plants that grow on marginal lands, and research is underway to develop lipid sources from algae that live in salt water.
The report, however, focuses on existing fuel crops, primarily soybeans and palm oil. Even here, biodiesel has some significant advantages over other alternative fuels, including the ability to work in existing engines and the infrastructure of the petroleum economy. The efficiency of converting existing crops to biodiesel dwarfs that of some of the alternatives; the report claims that "soybean-biodiesel produces a 93 percent energy gain vs. 25 percent for corn-ethanol."
To delve into biodiesel economics, the authors obtained volume and pricing information on large volume commodity trading of crops and fats from the United Nations Statistics Division. Operating under the assumption that any volume exported was in excesses of domestic needs for the material as food, they calculated the cost of refining it to biofuels, and compared that with European market prices, which are roughly $0.88 per liter.
Black and blue are good: countries with the best potential for economic biofuels
Credit: University of Wisconsin, Madison
Their calculations suggest that the potential biodiesel production globally amounts to 51 billion liters annually, an increase of over twenty-fold compared to current levels. The top-five potential producers, Malaysia, Indonesia, Argentina, the United States, and Brazil, account for over 80 percent of that total, suggesting the possibility of major economies of scale in these nations. Perhaps more significantly, over 47 billion gallons of that could be solid profitably at current European market prices. The one risk to developing this market, however, would be a sudden drop in oil prices—if they were to fall by more than half, the vast majority of biodiesel production would become unprofitable.
The study also examined the potential of biodiesel in developing economies, where it could have a significant impact on their course of development. Unfortunately, many of these countries suffer from instability, corruption, and extensive debt, factors that would inhibit outside investment in biodiesel infrastructure. When all of these factors are considered, the authors identify five countries—Malaysia, Thailand, Columbia, Uruguay, and Ghana—as having the best potential for development. Malaysia in particular has an impressive biodiesel capacity; were it to join the European Climate Exchange, full biodiesel production would produce carbon offsets that, under this cap-and-trade system, would be worth $58 million before it was even used as fuel.
The report also considers the potential for a focus on biodiesel production to increase the efficiency of the underlying agriculture. Using figures that are a bit less than two-thirds of the ideal yields for a crop, they estimate biodiesel production could improve the underlying agricultural efficiency enough to raise production to 417 billion liters, even after subtracting nearly 200 billion liters for increased food use. Malaysia and Indonesia account for 75 percent of this increase, so the authors suggest that some of the improved efficiency might instead go towards reducing problems with deforestation in those nations.
The report has to perform a number of estimates to produce its figures, so there is certainly a lot of potential for these numbers to not survive the reality of implementation. Still, the clear advantages of biodiesel, along with its largely untapped potential, suggest that it might make a big difference as we transition away from nonrenewable fuels. And if development in other areas goes well, the infrastructure may be in place by the time that lipid-rich saltwater algae are.