Economic potential of second-generation biofuels

Oil palm plantation is the most productive crops for biofuel materials. However this productivity must be tradded off with environmental impacts such biodiversity losses –if the plantations established from forests clearing.

Palm oil also becomes the significant material for food security. High biofuel demand from europan countries has been linked with the food price increase some years ago.  A dispute over greenhouse gas reduction rises along the growing production of crop-based biofuels.

A review study highlightes a sense of urgency around the development of biofuels produced from non-food biomass or called second-generation biofuels. It reviews the economic potential and environmental implications of production of second-generation biofuels from a variety of various feedstocks.

What the study says?

Miguel Carriquiry, Xiaodong Du and Govinda Timilsina in their study found that although second-generation biofuels could significantly contribute to the future energy supply mix, cost is a major barrier to increasing commercial production in the near to medium term.

The study reveals that the cost of second-generation (cellulosic) ethanol can be two to three times as high as the current price of gasoline on an energy equivalent basis. It is noted that the cost is depending on various factors.

The working paper titled Second-generation biofuels: economics and policies, it is revealed that the cost of biodiesel produced from microalgae, a prospective feedstock, is many times higher than the current price of diesel. The authors’ recommed policy instruments for increasing biofuels use, such as fiscal incentives, should be based on the relative merits of different types of biofuels.