All over the world, countries, including the United States, Brazil, India, and Indonesia, had established biofuel policies, hoping to promote the use of an alternative source of energy that may achieve objectives, such as generating employment and renewable energy. So, what is biofuel, and why do so many countries set their sights on this fuel?
Essentially, biofuel is any fuel derived from biomass materials, which may include ethanol and biodiesel. Since crops and organic matter like corn and sugarcane are sources of biofuel, they take up CO2 as they grow; when biofuel is burned, the CO2 released cancels out the carbon sequestered by the crops. Thus, biofuel is considered to be more climate-friendly compared to normal fuel as, theoretically, they produce zero net carbon emissions.
The economic benefits of using biofuel
Aside from being a more sustainable fuel option, biofuel also has other benefits. For instance, biofuel helps produce jobs, boost the economy, and ensure economic security. As of 2020, approximately 40% of corn crops in the U.S. are refined into ethanol; the substantial size of this market suggests that demand for workers is high. In 2015 alone, 1.9 billion U.S. dollars were paid out as wages to American workers in just the biodiesel industry since for every 100 million gallons of biodiesel produced, approximately 3,200 jobs were supported. Naturally, if the people prosper, the economy would as well since those wages would contribute to the economic activities in the country. In addition to that, the possibility of producing domestic fuel saves countries without large oil reserves from the need to import large amounts of fossil fuel, decreasing their dependency on export countries.
But is this all just talk?
Unfortunately, the production of biofuel comes with expensive costs. Although the direct fuel-cycle greenhouse gas emissions from biofuels are significantly lower than their gasoline counterparts, their indirect emissions may potentially emit more greenhouse gases.
Even before the production process, it takes significant amounts of land and water to grow the crops that would be refined into biofuel. Furthermore, as the industry grows and the biofuel business becomes lucrative, farmers would be incentivized to increase production, clearing more land to farm crops. The carbon debt created from the deforestation of an area negates the concept that biofuels are carbon neutral already. In addition to land use, growing the crops would also require the utilization of pesticides and fertilizers, which would, later on, contribute to agricultural pollution. Not to mention, the production of biofuel is a source of industrial pollution itself.
It is true that the biofuel industry has created jobs and helped ensure economic security. However, they aren’t as sustainable in practice as they are theoretically. As the demand for biofuel increases, so does the demand for the crops that they are made from, such as corn or sugarcane. Consequently, the increased demand results in increased prices. Taking corn as an example, if the prices have increased for corn, then not only corn-based products are affected; products that rely on corn, like livestock, would also become relatively more expensive. All in all, households would have to spend more to obtain certain products.
The use of biofuel around the world
Currently, countries all across the world have biofuel policies, with varying intentions behind these policies. In the U.S., the guiding principle of their biofuel policies has been to reduce the U.S.'s dependence on oil, especially foreign oil. These policies focus on the ethanol industry as an alternative to gasoline; now, the U.S. is the largest producer of bioethanol. In Brazil, their biofuel program is the most developed and focuses on the production of ethanol from cane sugar. Since 1985, 96% of automobiles sold in Brazil were powered by ethanol.
In 2008, Indonesia was introduced to mandatory levels of biofuel consumption. During that time, oil companies, like Pertamina, suffered losses due to the high costs of blending oil, but fortunately, these companies were subsidized and provided with financial aid from the government. It is predicted by the IESR that by 2050, “demand for biofuel in Indonesia will increase to 190 million metric tons”, assuming that the EV market share remains the same. Despite pushing for the development of EVs, the Indonesian government is also promoting domestic biofuel production, which is primarily focused on palm oil . Their biofuel program is currently at a B30 stage, where diesel is blended with 30% palm oil; in 2025, it is expected to arrive at stage B50.
The future of biofuel
Although the biofuel industry is currently ineffective and an energy negative process, the future for biofuel is not completely bleak. In fact, there is hope that biofuel can become more effective and sustainable. For instance, instead of using crops, biodiesel may be produced from used cooking oils; even algae can produce biofuels. It has been proven that vehicles running on biofuel actually release less emissions when burnt as emissions are reduced by over 20% just by having 20% of biofuel in normal diesel. If the process of biofuel production is made more affordable and efficient, then there might be a chance for biofuel and biodiesel to produce cleaner energy to help the environment.
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