A new report from Bloomberg New Energy Finance – launched during World Economic Forum at Davos – estimates the socioeconomic prospects of deploying advanced biofuels in eight of the highest agricultural-producing regions in the world, i.e. Argentina, Australia, Brazil, China, EU-27, India, Mexico and the USA.
The report was commissioned by the Danish company Novozymes (where I work) and we are excited that Michael Liebreich, CEO of Bloomberg New Energy Finance is discussing the prospects if the world starts producing transport fuel from food waste at Davos along with leaders from e.g. Shell, DuPont, ADM, DSM, and IUCN (International Union for Conservation of Nature).
According to the report “Moving towards a next-generation ethanol economy” a huge global resource of agricultural residues can be harvested sustainably every year without altering current land use patterns.
An estimated 17.5 percent of the agricultural residue produced could be available today as feedstock for advanced biofuels. With this amount, enough advanced biofuels could be produced to replace over 50 percent of the forecasted 2030 gasoline demand. The world has a unique opportunity to develop a next-generation bioproduct industry based on agricultural residues by 2030.
The socioeconomic prospects of deploying advanced biofuels go well beyond energy security. The report shows that the eight regions analyzed have the potential to diversify farmers’ income, generate revenues ranging from $1 trillion to $4.4 trillion between today and 2050 and create millions of jobs.
For example, advanced biofuels could create up to 2.9 million jobs in China, 1.4 million jobs in the USA, and around 1 million in Brazil. The impact on climate change would also be reduced considering advanced biofuels emit 80 percent less greenhouse gas than ethanol.
During the session at Davos where the study was launched, Novozymes’ CEO pointed out that at a time when everyone is striving to create jobs to secure our economic future aand finding a sustainable way to produce energy, this study shows the benefits of a transition towards sustainable biofuels and bioproducts based on agricultural residues. It also strongly signals that policy incentives will result in great payback to society.
Towards the bio-based economy
The technology exists today to produce advanced biofuels from agricultural residues, and the first commercial-scale facilities will start production this year. Moreover in the coming decades a variety of other advanced bioproducts such as chemicals and plastics could also be produced based on the same feedstock and pave the way towards a bio-based economy, independent from fossil fuel.
Making it happen
While the potential is high, broad deployment of advanced biofuels is not a given. The report highlights a series of barriers in terms of feedstock supply, insufficient infrastructure and high capital costs that can prevent the industry from unlocking the value of this agricultural residue resource.
It will depend on policy makers to put solid incentives into place that actively encourage the necessary investments, including long-term mandates for advanced biofuels, incentives for the collection of farming residues and tax breaks for investments.
Full disclusure: The author is a Senior Public Affairs Manager at Novozymes.