September 24, 2023

Dangerous Renewed Thrust on Biofuels


AS one of the outcomes of the recently concluded G20 Summit in New Delhi, a new Biofuels Alliance was announced, with India, Brazil, the US and other countries taking the lead towards a programme of action aiming to increase the uptake of sustainable biofuels especially in the transport sector.  Here in India, much has been made of this initiative as another triumph showcasing the growing global leadership of the present government, and also as a step towards a big push to India’s already sizeable and ambitious biofuels programme.  The impression is that this new global alliance would work towards a transition from “first generation” or 1G biofuels to 2G biofuels. Unfortunately, the reality is very different.

The use of biofuels, both ethanol and bio-diesel, especially in transportation, is often portrayed as a major measure to move away from fossil-fuel based transport, reduce greenhouse gas (GHG) emissions, and form an important intermediate step towards complete decarbonisation and renewable energy (RE). According to this view, biofuels have many advantages: they are derived from a renewable resource, mainly crops such as corn, sugarcane and palm oil; they use the same internal combustion engines as current automotive vehicles, so do not call for major shifts in manufacturing or infrastructure; and have lower emissions than petroleum-based fuels.

Biofuels can be made in both major engine fuel variants, that is Ethanol as a substitute for petrol or gasoline used in internal combustion engines, and bio-diesel as a substitute for diesel used in compression-ignition engines, and can be used in various proportions of blends with their petroleum-based counterparts. Both bio-ethanol and bio-diesel can be used either by themselves or blended with petrol and diesel respectively in various proportions. Normally, ethanol blended petrol (EBP) with upto 10 per cent ethanol can be used in internal combustion engines without any modifications, whereas  EBP20 or higher, that is blends with 20 per cent or more ethanol, will require modifications or re-tuning of engines, with higher ethanol blends require specially designed “flexi-fuel” engines, calling for major investments in infrastructure.

Many analysts, including this writer, have questioned from the very outset both the very idea and efficacy of these biofuels, classed as “first generation” or 1G biofuels. Critical voices have now grown much louder, including in mainstream policy circles. Criticism has been centred chiefly on the negative impact on food security due to use of food crops for producing automotive fuel (mostly for personal vehicles), diversion of forest land and other land-use changes away from food production, minimal if any cost advantage over petroleum-based fuels, and only marginal or even negative reduction of greenhouse gas (GHG) emissions.

Over the years, evidence of these negative aspects have mounted, yet the push for biofuels continues, driven by continued policy support, industrial interests especially in specific applications, and hope that technological or other developments would reverse the above trends.

There is overwhelming evidence that 1G biofuels do not bring environmental benefits over their life-cycle. One of the major factors is changes in land-use in producing the feedstock as demand grows. Either forest land is cleared, as with palm oil in south-east Asia, or fresh land is converted or brought under cultivation for such feedstock, such as for sugarcane in Brazil, elsewhere in South America and Africa. These land-use changes release stored carbon in the soil and pre-existing biomass, leading to a net negative in the carbon balance. The use of nitrogenous fertilizers lead to release of nitrous oxide (N2O), a GHG with 300 times the global warming potential (GWP) of carbon dioxide. Then there is the energy used for transporting the feedstock and for processing it into biofuel.

Estimates by the International Council for Clean Transportation show that in passenger vehicles, only 2 per cent reduction of GHG emissions were observed with petrol blended with 5 per cent (EBP 5), whereas biodiesel blends resulted in 3 times the emissions! All calculations were over the full life-cycle.

All these and other experiences from different parts of the world had resulted in a raging “food vs fuel” controversy. Argument was that, if at all crops were to be grown on cultivable land, or new lands were to be brought into cultivation, then food should be grown rather than crops that yielded fuel. This led to the slogan “land for food, not for fuel,” especially for energy-guzzling personal vehicles rather than any public good. Yet, driven by market forces and a misplaced  ideology that prioritised (supposedly) lower emissions over all socio-economic objectives such as food security, environmental sustainability, and land use for the common good, demand for 1G biofuels has continued to grow, benefiting the land mafia and the often subsidised biofuels industry.

Given the above negative factors, considerable attention is therefore now being paid to what are known as second generation biofuels or 2G biofuels. These are differentiated from 1G biofuels both by the types of materials used and by the technologies used to produce them. As against 1G biofuels based mostly on food crops, 2G biofuels are mostly made from non-food ligno-cellulosic materials such as agricultural wastes or residues such as wheat or rice straw, sugarcane tops, corn cobs, wood chips and so on, or even from grasses and other such produce normally regarded as weeds or useless, and which could be grown on degraded or otherwise uncultivated lands. Materials whose food value has already been exhausted, such as municipal solid wastes or used cooking oils, are also used to make 2G biofuels.

Technologies for production of 2G biofuels have achieved commercial scale only within the past decade or so, with mixed results. Large subsidy programmes have not taken root in the US, EU or other developed countries, and price fluctuations in ethanol, weak or loose mandates for biofuels, in establishing sound supply chains for feedstock such as corn cobs etc, have all contributed to slow uptake of 2G biofuels production. The steady decline in diesel automobiles, and the moves by numerous countries to phase out diesel-powered vehicles, has left bio-ethanol as the main player in the game. Global trends of 2G Ethanol production are fluctuating, and at present 2G Ethanol production is only around 2 per cent of global production of biofuels, mostly in the US, EU and partially in Brazil.

Efforts have also been made over the years to lay down standards for sustainable biofuels using various criteria such as renewability, non-interference with food security, significantly lower emissions, no diversion of forest or food-crop lands, social justice and fair incomes to growers and producers etc.

In India, the government has given a major push to 2G bio-ethanol. Strategy here has been to initiate a 2G bio-ethanol programme through a special scheme for 12 new commercial scale plants and 10 demonstration scale plants run by public sector undertakings (PSUs) along with, if they choose, private players with competence in similar industries. This is being implemented under the new scheme with the unpronounceable and incomprehensible name of the Pradhan Mantri JI-VAN (Jaiv Indhan-Vatavaran-Anukool Fasal Awashesh Nivaran) Yojana! Most of these plants will be located in areas with generation of large quantities of agri-wastes such as rice and wheat straw, such as in Punjab, Haryana, western UP and Uttarakhand, thus also tackling some of the severe air pollution caused in winter months by stubble burning. The Sscheme involves substantial “viability gap funding” or subsidy to the tune of about Rs 2000 crore.

It is clear that the government has put the onus for such projects on PSUs, which it otherwise does not support, because the plants are not profitable enough to attract private investment despite this support. In fact, even the PSUs seem to be having second thoughts and, after the first few plants, have decided to go slow on starting new ones and set up 1G plants instead at about one-tenth of the cost. An influential international study has also shown the non-viability of these plants, and has also pointed out that in any case, 2G ethanol thus produced would only meet around 1 per cent of the target for 2030. 

Dangerously, the one plant that seems to be doing reasonably well is the PSU Numaligarh Refinery in Assam which uses virgin bamboo as feedstock harvested from nearby land, supposedly outside the forest area. The obvious dangers of creeping diversion of forest lands, once again causing more carbon debt that even many years or decades of ethanol production can repay, as has happened in numerous other such projects in the north-East, are clearly being ignored.  

One way or another, land-use change for production of biofuels is not environmentally sustainable.       

Notwithstanding these hesitant experiments on diversification to 2G biofuels, the government has decided to double down on 1G biofuels, and has even raised the target to achieve EBP20 or 20% per cent ethanol-blended petrol nationwide by 2025 instead of the earlier target of 2030.

India has come close to meeting the earlier mandated target of 10 per cent Ethanol blending, albeit with great difficulty and with many changes of strategy. Use of molasses, a by-product of sugar manufacturing from sugarcane, to make Ethanol was amended to allow direct use of cane juice, citing surplus production of sugar exceeding domestic consumption. Yet, the government, mindful of sugar prices and inflation, has maintained close control over sugar exports which have been only around 7 million tons against production of around 32 million tons of sugar from about 330 million tons of sugarcane. Sugarcane production is also sensitive to changes in rainfall and temperature variations, both impacted by climate change, and quantity of surplus is always marginal. Sugarcane cultivation is also highly water-intensive and has had to be restricted in several districts. Besides, there is considerable competition from industries for potable alcohol and other chemicals, which make India a net importer of ethanol.

Despite all these difficulties, the government has further increased its bio-ethanol ambitions, has enlarged its target and further diversified feedstock to include not just sugar but foodgrain such as rice and maize as well, with loan interest subvention schemes extended to grain-based distilleries as well! The new biofuels policy goes much further than even its ambitious 2018 policy.

In the first place, we should note that the programme to achieve 5 per cent blending of bio-diesel has virtually been abandoned since production has not even reached 1 per cent as predicted by numerous analysts right at the outset!

The new Expert Committee on Roadmap for Ethanol Blending has a new 2025 target of 13.5 billion litres of bio-ethanol, roughly 6.7 billion litres from sugarcane and food grains, up from 2.7 billion litres produced in 2021. It is estimated that this will require 17 million tonnes of food grain, compared to a mere 78,000 tonnes released in 2020-21. With the Food Corporation of India required to maintain a buffer stock of about 13 million tones, and current stock being about 23 million tonnes which can fluctuate considerably, the margin is almost non-existent. Can a country ranked 101 out of 116 in the World Hunger Index really talk about a “surplus” that it can use for making biofuels?

Other studies have also questioned the logic of pushing for such a high biofuels target when weighed against all other costs and negative impacts. The above targets will call for bringing an additional about 6 million hectares of land under sugarcane, and around 5 million ha under maize! These studies have said this makes no sense from an energy balance viewpoint, since around 180 ha of maize-derived Ethanol would be required to annually charge an EV, which could obtain the same from a 1ha solar power plant! And all this will achieve only 5 per cent reduction in emissions, not counting life-cycle emissions!

Clearly, the renewed push for biofuels is yet another false solution to the problem of climate change, and constitutes a needless diversion away from other accelerated efforts towards renewable energy, except perhaps for a very few niche areas where shifting away from petroleum will be extremely difficult, such as large aircraft and long-range diesel trucks. For the rest, one does not need to go beyond 5 per cent ethanol blending. If India does go down the road called for by the government, it will pay a high price in agricultural disruption, food prices and worsening inequality. Contrary to some pro-biofuel advocates, the food versus fuel debate continues to be relevant.