The two most often asked questions with respect to biofuels revolve around their costs as compared to fossil fuels, and their impact on food. The cost of biofuels varies greatly depending on a number of factors. Given that the majority of biofuels’ production costs are dependent on the price of the feedstock used to make the biofuels, the increases and decreases we see are specifically tied to the prices of these feedstock commodities and the efficiency with which the technology processes these feedstocks. As new biofuels like sustainable aviation fuels, renewable diesel, and even cellulosic ethanol replace the traditional biodiesel and ethanol, we do note that global biofuels production is increasing in all major producing regions. The increases are slower than were seen in the previous decades, but that is likely due to far greater amounts now being produced. Demand is very strong with governmental policies, subsidies, taxes, and mandates continuing to play a strong role.
Initially, it was a general rule of thumb that biofuels would be competitive with oil prices around $70/bbl. New technologies and the movement to alternative feedstocks have many producers of next-generation biofuels saying that they want to be competitive with crude oil even at around $45 a barrel to ensure long-term viability in the market. As we have seen spikes in oil prices to $120/bbl, we have concurrently seen consumers frustrated at the pump clamor for more biofuels. Historically, however, as the price of oil went down to make gasoline and diesel fuels affordable at the pump, consumer interest would wane. This historic “up and down” oil pricing made entry into the biofuels markets a more difficult proposition for investors. However, as we have now realized, pricing alone never told the full story.
As we have seen more focused attention on climate change and global warming, the entry into biofuels is becoming more mainstream now. No matter how some twist the figures, biofuels are cleaner and more environment-friendly than petroleum. There is less carbon monoxide emission, and less particulate matter and unburned hydrocarbons. Biofuel contains little sulfur content, so they don’t pollute or contribute to things such as acid rain. Given the energy security and environmental impact provided by biofuels, the world continues to embrace that biofuels are not only beneficial in environmental impact and reduction of greenhouse gases, but also in the consumption of waste materials that might otherwise be discarded. Given the energy security and the reduction of greenhouse gas emissions provided by biofuels, the world biofuels market has seen good growth and should continue to provide excellent opportunities, and as we continue to discuss biofuels costs and prices, it is critical that we see the true, long term picture.
Large renewable energy and biochemical consulting firms certainly have experts in biofuels and biotechnologies, as well as the more common areas like bio and renewable fuels, biomass and biomass power, feedstocks, biomaterials, and biochemicals. These larger groups will also have expertise in other technologies like agitation systems, anaerobic digestion, beverage fermentation, bio-oil extraction, bioreactors, carbon capture, carbon storage, carbonization, catalysis, cellulosic ethanol, cleantech, combined heat and power, direct combustion, enzyme technologies, fermentation, Fischer-Tropsch, gasification, genetic engineering, hydrothermal, nanotechnology, organosynthesis, power generation, pyrolysis, renewable technology due diligence, synthetic biology, thermochemical conversion, torrefaction, water treatment, and waste management.
With over 150 consultants worldwide, Lee Enterprises Consulting has the diverse experts and geographical reach to assist in virtually any bioeconomy project. Our highly qualified teams bring a unique integration of technical, scientific, regulatory and hands-on experience to any project. Look at our experts and the services we provide. Most of our experts are also available to advise and serve as expert witnesses in bioeconomy litigation matters. For the larger projects, we specialize in putting together full service, interdisciplinary teams with one point of contact. See video about LEC here. Call us at 1+ (501) 833-8511 or email us for more information.
See also: Food v. Fuel argument with respect to biofuels here.