Friday, May 15, 2009

$400+ Billion in Subsidies for Biofuels

Biofuels Slated to Receive More than $400 Billion in Federal Subsidies

Thursday, May 7, 2009


New report from Friends of the Earth documents how biofuels industry gains at taxpayers’ and environment’s expense

WASHINGTON, D.C.—Friends of the Earth released a report today that examines the extent to which the biofuels industry is subsidized by federal tax credits and a federal renewable fuels mandate. The report finds that between 2008 and 2022, biofuels will receive more than $400 billion in subsidies.

The report also shows that, rather than promoting the production of less harmful biofuels, many of these subsidies are supporting the most environmentally damaging ones, such as corn ethanol.

“The size of these subsidies is extraordinary, particularly given how poorly we screen the environmental impacts produced by their recipients. The subsidies are accelerating environmental damage,” said Doug Koplow of Earth Track, who authored the report. “There are far better ways to spend this money.”

“What we’ve found is that not only is the biofuels industry harming the environment, but that the government is paying it to do so,” said Kate McMahon, biofuels campaigner at Friends of the Earth. “President Obama released a $3.5 trillion budget proposal today. If he’s looking for a place to make some cuts, these giveaways to the biofuels industry would be a great place to start.”

The report can be viewed at

A one-page document summarizing the report’s findings can be found at:

More information about Friends of the Earth’s work to roll back environmentally harmful biofuels subsidies can be found at


Nick Berning, 202-222-0748
Kate McMahon, 202-222-0715

Biofuels: The past, present and future

By Justin Smith



The world of biofuels is as diverse as it is controversial. From being hailed as a great savior from the perils of using fossil fuels, to being a pariah that is leading to less food to go around, biofuels have, at best, a mixed reputation.

That said, not all biofuels are created equally and many different types exist, each with their own sets of pros and cons. As such, many of the negative stereotypes should not be applied to all types of biofuels.

A long history

A biofuel is defined as any fuel that is derived from raw or recently living biological material, as compared to fossil fuels, which also come from biological material, but from organisms that have been dead for a very long time. Technically biofuels have been used for millennia in the form of wood fueled fires, and in terms of liquid biofuels for transportation, those have actually been around since the inception of the automobile.

According to biofuels information Web site, Rudolf Diesel, the German inventor of the diesel engine, designed his engine to run on peanut oil. "Later Henry Ford designed the Model T car, which was produced from 1903 to 1926. This car was completely designed to use hemp derived biofuel as fuel," the Web site says. However, when large supplies of crude oil were discovered in Texas and Pennsylvania, the more efficient and plentiful petroleum became the cheaper fuel of choice for auto makers.

Fuel shortages in World War II led both German and British scientists to develop biofuel/gasoline blends. explains, "In this period, Germany was one of the countries that underwent a serious shortage of fuel. It was during this period that various other inventions took place like the use of gasoline along with alcohol that was derived from potatoes. Britain was the second country [that] came up with the concept of grain alcohol mixed with petrol."

The United States' Environmental Protection Agency (EPA) created the Energy Policy Act (EPAct) in 1992 and revised it in 2005. The U.S. Department of Energy (DOE) says the act was "passed to reduce our nation's reliance on foreign petroleum, and improve air quality."

The DOE states, "Several parts of [the] EPAct were designed to encourage [the] use of alternative fuels, which are not derived from petroleum, that could help reduce dependence on imported oil in transportation. Titles III and V employ regulatory approaches for encouraging the fundamental changes necessary to building a self-sustaining alternative fuel market."

The EPAct gave biofuels a greater platform on which to build demand. That fact, coupled with the sky-high oil prices last summer, has led to increased interest in biofuels as both a cleaner and potentially cheaper and safer supply of energy. However, the cleanliness and price of biofuels varies by what type of plant is being cultivated and converted to fuel.

Ethanol and biodiesel

The first generation of biofuels is, by far, the most common type, and they are also what incite the most passionate debates on the subject. That said, they are, in all likelihood, not the future of the biofuel industry. Ethanol and biodiesel are the most popular of this type of biofuels.

First generation biofuels are primarily derived from two types of sources: crops that have a high sugar or starch content, or using the oils of various plants. Energy giant Shell, which has a division dedicated to finding viable fuel source, states, "When choosing raw material for biofuels, people have looked first to plants that can be grown regularly in large quantities.

"Today's most widespread biofuel, ethanol, is commonly made from crops of sugar cane, corn or wheat. The second most widespread type of biofuel is often made from rapeseed, palm oil or soy beans and is known as FAME (fatty acid methyl esters)."

One downside to such fuels is that they do not provide as much power as gasoline, so more must be used to generate an equivalent amount of power. For this reason, Shell says, "today's standard vehicle engines can only use fuel with small amounts of ethanol or FAME blended in (5-10 percent)."

Engines do exist that can use much higher concentrations of ethanol. Known as flex-fuel engines, vehicles with this type of power plant can use up to 100 percent ethanol, although in the United States automobiles are currently only allowed to use up to 85 percent blends. However, some countries, such as Brazil, permit people to run vehicles on pure ethanol.

Another type of first generation biofuel, biodiesel, is quite different from ethanol. Biodiesel, as described by the National Biodiesel Board, is "made through a chemical process called transesterification whereby the glycerin is separated from the fat or vegetable oil. The process leaves behind two products -- methyl esters (the chemical name for biodiesel) and glycerin (a valuable byproduct usually sold to be used in soaps and other products)."

Biodiesel can be blended with petroleum, but diesel-powered vehicles can also run on 100 percent biodiesel, often with no modifications to their engines, especially newer versions. It is possible to use straight vegetable oil in an engine, but as it is so viscous, it must be thinned by heat so it can be atomized by the fuel injectors, according to Ghent Bio-Energy Valley, a Ghent, Belgium-based partnership focused on developing sustainable bio-energy.

The other first generation biofuels

While biodiesel may be the most common form of biofuel, there are less familiar varieties that still play a role in the industry. Biogas, syngas and solid biofuels are each other types of first generation biofuels. One upside to these fuels is that they do not always require food crops to be made.

Biogas is produced through the process anaerobic digestion, which is the break down of organic materials, including waste, by microorganisms in the absence of oxygen. According to, "The biogas produced is very rich in methane, which can be easily recovered through the use of mechanical biological treatment systems."

Biogas is often naturally produced in landfills and can be captured, but this method has the potential do harm as it is a greenhouse gas. "A less clean form of biogas is the landfill gas which is produced by the use of naturally occurring anaerobic digesters, but the main threat is that these gases can be a severe threat if escapes into the atmosphere," explains.

Syngas, which is short for synthesis gas, has a mixture of carbon monoxide and hydrogen in varying amounts. The gas is created through a combination of gasification, combustion and pyrolysis, which is a way to decompose something through the application of heat, of organic material. Having about half the energy of natural gas, syngas is useful when split into its constituent parts to perform a range of tasks, from being a fertilizer to powering up a fuel cell.

Finally, since the category includes fuels like firewood, solid biofuels are the oldest form of biofuels. A wide variety of biomass types are useful as a solid biofuel, including sawdust, dried waste and grass. To improve efficiency, solid fuel is formed into pellets and burned, however burning raw biomass releases a number of unhealthy pollutants, and it still is not very efficient. Ghent Bio-Energy Valley says, "This is not a very efficient way of using biomass and what is more it has a number of documented ill effects for the health of the people using it, such as respiratory diseases because of soot emission and negative effects of CO-emission for pregnant women."

Cellulosic ethanol, the second generation biofuel

The second generation of biofuels comes in the form of cellulosic ethanol. This form of fuel is derived from a substance called lignocellulose, which makes up the bulk of the material in plants. As such, the vast majority of plants on Earth are capable of being a source for cellulosic ethanol.

Solid biofuels and cellulosic ethanol both have similarly huge ranges of sources, but while solid biofuels are basically just burned in a raw or near-raw state, plants are refined considerably to make cellulosic ethanol. Also, first generation ethanol is produced from the parts of plants like wheat, sugar cane and corn that people use for food; however, cellulosic ethanol is made from the remaining, more fibrous plant parts that have no value as food, such as stems, leaves and wood.

It requires a lot of work to remove the sugars from lignocellulose to make cellulosic ethanol, but the resulting fuel still has more energy than is required to make it. Currently two methods are used to make the fuel, one of which strives to separate the sugars, which are then fermented into alcohol, while the other method uses heat to break down plants then uses a different fermentation process to create the fuel.

The first method, known as cellulolysis, involves pretreating the plant material with chemicals or enzymes that begin to break down the plant through hydrolysis. Once the sugars are removed, they are fermented to create alcohol using varieties of yeast, but due to the complexity of the sugars, it can take a lot of yeast to get the job done. However, new yeasts are being created that more efficiently ferment the sugars, even ones that can perform hydrolysis and fermentation at the same time.

The other method to create cellulosic ethanol is called gasification. Instead of using a pretreatment to cause hydrolysis to separate the sugars that are then fermented, gasification uses heat to break down the plant into hydrogen, carbon monoxide and carbon dioxide. After, the gas is fermented using microbes that convert it to ethanol and water. Finally, the water is removed using distillation, leaving the ethanol.

While corn and wheat and other food crops can be used to create cellulosic ethanol, just about any other non-food plant can be used. Even though the use of non-food plants does not directly take food off people's plates, it does have to contend with food crops for arable land. One possible way to help solve this problem is using hardier plants that can grow in areas where food crops cannot, thus not competing with them. One such plant that is gaining in popularity is switchgrass, but to be truly useful as a fuel, a lot of it must be grown, which still requires a lot of land.

Competing with food crops for land is arguably cellulosic ethanol's biggest challenge, but not the only one. It also is still very expensive to process the plants. The microbes and enzymes it takes to break down the plants are not yet cheap to produce, and it takes a fair number of them to get the job done.

The DOE says, "To bring down costs, continued progress is needed in the development of energy crops dedicated to biofuel production, biomass-collection technologies, pretreatment methods that minimize the release of inhibitory by-products, and more efficient enzymes and microbes robust enough to withstand the stresses of industrial processing."

Also, the process of making the biofuel can have a negative impact on the environment. The chemicals that are used to pretreat plants can be harmful, and the heat used to break down plants through gasification is often generated through the use of hydrocarbons, primarily natural gas.

Biofuels: The Next Generation - Algae

The third generation of biofuels comes in the form of the water-based plants known as algae. The ability to transform algae into a biofuel is a burgeoning science, and could hold the future of the biofuel industry, although not without some hurdles to leap over first.

The DOE division of Energy Efficiency and Renewable Energy (EERE) explains, "Microalgae are single-cell, photosynthetic organisms known for their rapid growth and high energy content. Some algal strains are capable of doubling their mass several times per day. In some cases, more than half of that mass consists of lipids or triacylglycerides--the same material found in vegetable oils. These bio-oils can be used to produce such advanced biofuels as biodiesel, green diesel, green gasoline and green jet fuel."

Once algae are grown and cultivated, there are three primary methods of extracting their oil. The first and simplest method is in the form of the oil press or expeller. Algae biofuel experts at Oilgae explain, "When algae is dried it retains its oil content, which then can be 'pressed' out with an oil press. (…) While more efficient processes are emerging, a simple process is to use a press to extract a large percentage (70-75 percent) of the oils out of algae."

The second extraction technique is the hexane solvent method, which can produce up to 95 percent of the oil in algae. Oilge says, "After the oil has been extracted using an expeller, the remaining pulp can be mixed with cyclohexane to extract the remaining oil content. The oil dissolves in the cyclohexane, and the pulp is filtered out from the solution. The oil and cyclohexane are separated by means of distillation."

The algae oil specialists say that the hexane solvent method requires the use of chemicals, such as hexane, benzene and ether. The downsides to using these solvents include the hazard of an explosion, as well as the risk that benzene is classified as a carcinogen.

Finally, the supercritical fluid extraction method can draw out up to nearly 100 percent of the oils. In this process, CO2 is pressurized and heated until it is both a gas and a liquid, at which point it is mixed with algae, removing the oil. The fact that this method requires additional complex machinery to create the pressure has detracted from its popularity.

Algae have a number of upsides over other biofuels. According to EERE, microalgae can potentially produce 100 times more oil per acre of land than soybeans or any other oil-producing crop. In addition, algae do not have to compete for land with food crops as it can be cultivated in large open ponds or closed photobioreactors, which can be sited in deserts and other non-arable areas.

Another plus is that algae are not picky and EERE says, "Many species of algae thrive in seawater, water from saline aquifers, or even wastewater from treatment plants." Also, the production of algae can actually mitigate carbon dioxide. EERE clarifies, "During photosynthesis, algae use solar energy to fix carbon dioxide (CO2) into biomass, so the water used to cultivate algae must be enriched with CO2. This requirement offers an opportunity to make productive use of the CO2 from power plants, biofuel facilities, and other sources."

The primary downside to using algal biofuels is that they are not economical to produce, at least not with current technology. EERE says, "Based on conservative estimates, algal biofuels produced in large volumes with current technology would cost more than US$8 per gallon (in contrast to US$4 per gallon for soybean oil today)."

According to EERE, to lower the cost of production, research must focus on a number of sectors, including controlled mass cultivation, algae for wastewater treatment, and harvesting and oil extraction technologies. The group says, "Particular attention must be paid to the engineering of sustainable microalgal systems and to the regulatory and environmental landscape."


Chemist says he has way to turn algae, other waste into diesel inexpensively

By Neal St. Anthony | McClatchy/Tribune News

April 26, 2009


MINNEAPOLIS -- A Minnesota biofuels company that has attracted visits from financiers, scientists, customers and the federal government has produced a clean diesel fuel from algae harvested from a pond next door to its plant.

The development could prove big for the alternative-fuels business and the Midwestern economy.

Clayton McNeff, a chemist and veteran industrialist, said his family-owned SarTec Corp. has perfected a 3-year-old "continuous flow" process and produces about 1,000 gallons of diesel weekly for $1.25 to $1.75 per gallon from a variety of sources, from restaurant and ethanol-plant waste oils to non-edible crops and plain old pond scum.

"We see this as revolutionary technology, and we're not trying to keep it a secret," said McNeff, 40, who recently published a peer-reviewed scientific paper.

"You can deploy this technology using small mobile units, so you don't need to send feedstocks hundreds of miles," McNeff said. "You just use local crop waste, or ethanol waste oil or algae."

McNeff has raised about $7 million from family and friends to construct a "two-reactor" pilot plant in Isanti, Minn., which will open in June.

His Ever Cat Fuels expects to produce 4 million gallons of clean diesel annually from a variety of feedstocks.

"This technology has the potential to help with energy security and climate change," Peter Agre, a Nobel Prize-winning chemist who directs the John Hopkins Bloomberg School of Public Health, said in a recent letter of support to federal officials. "These are two of the most important issues we face in terms of our country's economic and environmental future."

The technology is rooted in a 2006 research project by then-Augsburg College student Brian Krohn and chemistry professor Arlen Gyberg, who turned to McNeff, also an Augsburg-trained chemist.

The U.S. consumes about 140 billion gallons of gasoline and 60 billion gallons of diesel per year, distilled mostly from imported oil, to fuel vehicles, trains and ships. Last year, in response to soaring fuel prices, national security and global warming concerns, President George W. Bush signed into law legislation that mandates increasing amounts of homegrown fuels from renewable sources.

National demand for biodiesel has grown to 450 million gallons this year from 25 million gallons in 2004, according to the Agricultural Utilization Research Institute.

"There are some really good business opportunities that make use of waste oils such as technology that Clayton is developing," said Doug Cameron, chief scientific adviser at investment bank Piper Jaffray & Co. "There is a big opportunity with algae. It is unproven at this point. But the research and use of algae at waste treatment plants, which also cleans up the phosphorus and other pollutants, and the use of carbon dioxide at power plants is encouraging."

The promise of Ever Cat's "Mcgyan Process" is that it can convert a variety of domestic non-food feedstocks through a low-energy, no-waste process that also could potentially employ hundreds throughout the Midwest.

In an interview, McNeff said SarTec, a 25-person company, and the Mcgyan Process have solved a vexing algae problem that should speed development of the promising feedstock.


Europe's Overseas Push into Biofuels

Companies are buying tracts of land in Africa, Russia, and Ukraine to produce biofuels in a move that could harm farmers in developing economies

By Leigh Phillips


Massive tracts of land in Africa, Russia and Ukraine are being bought up or leased by richer countries to ensure access to food and for production of biofuels—a development that could result in unrest as locals begin to lose access over their territory.

An area roughly the same size as the amount of farmland in Germany is in play and at a cost of tens of billions of euros.

This phenomenon, a product of the twin food and fuel crises of last year, is threatening local communities whose traditional use of such lands is being undermined by the food and energy security needs of others.

This all comes from a warning issued on Monday (11 May) by the US-based International Food Policy Research Institute (IFPRI), an agricultural research centre funded by an alliance of 64 governments around the world.

A year after the global food crisis that saw food riots and protests spread throughout the developing world—and even to some rich countries—a number of nations have learnt their lesson.

These countries—largely emerging nations such as China, India and the Gulf states—feel they must ensure food security for their people, even at the cost of the food security of other countries.

At the same time, exacerbating the problem is the scramble by mainly European firms for so-called idle or marginal lands on which to grow biofuels.

Stung by the criticism of scientists last year that using farmland for such crops can actually boost carbon emissions and increase food prices, biofuels firms have been scouting about for cheap ‘wasteland'.

"EU policies is certainly contributing to Western biofuels investment," Ruth Meinzen-Dick, one of the report's two authors, told EUobserver,

"When you hear the word ‘wasteland' or ‘unused', it usually does have some use, just not uses that are officially recognised," she added, "whether as a village common or as pastureland, gathering nuts, honey, or for rattan."

The danger is, her report warns, that these companies risk setting off unrest as communities react to the loss of their lands.
Jatropha, palm oil

Details about the deals, the size of land purchased or leased, and the amount invested are often murky and shrouded in secrecy, according to IFPRI, but they highlight a number of agreements.

UK-based Sun Biofuels has secured land in Ethiopia and Mozambique for the cultivation of biofuels produced from jatropha, as well as some 5,500 hectares in Tanzania for the same purpose. Britain's CAMS Group has also purchased 45,000 hectares for jatropha biofuels in Tanzania. The researchers found that another 10,000 hectares have been secured in Nigeria by Trans4mation Agric-tech, also of the UK.

Ethiopia is home to 13,000 hectares secured under a contract farming agreement with Germany's Flora EcoPower for biofuel crop cultivation.

Sweden's Skebab has secured 100,000 hectares in Mozambique for biofuels as well.

Meanwhile in the east, Denmark's Trigon has secured 100,000 hectares from Russia. Sweden's Alpcot Agro has secured 128,000 hectares and Black Earth Farming 331,000 hectares in the country. Landkom, a UK firm, has leased 100,000 hectares in Ukraine.

Food production meanwhile is usually the focus of the land acquisition by emerging economies. The UAE has secured some 378,000 hectares to grow corn, alfalfa, wheat, potatoes and beans, while Saudi Arabia is in the process of gaining access to 500,000 hectares in Tanzania.

Some emerging economies as well are also getting in on the biofuels bonanza. China has secured a whopping 2.8 million hectares in the Democratic Republic of Congo for oil palm and is hoping to access another 2 million hectares in Zambia for jatropha.

All told, the acreage secured through lease or purchase by Asian and European private and public investors amounts to 15-20 million hectares, at a cost of €15-20 billion ($20-30 bn).

By comparison, annual net official development aid by OECD countries amounted to around €90 billion ($120bn) in 2008, €50 billion of which came from the EU.

Jobs, infrastructure

"Additional investments in agriculture in developing countries should be welcome in principle," the report says.

These land acquisitions could inject much-needed investment into agriculture and rural areas in poor developing countries, with the monies potentially creating farm jobs, improving rural infrastructure and aiding technology transfer.

But, avers the report, "the scale, the terms, and the speed of land acquisition have provoked opposition in some target countries" as local people lose access to and control over land on which they depend.

Often the agreements are not made on equal terms between the investors and local communities, resulting in smallholders who cannot effectively negotiate with these big players being displaced from their land and unable to seek redress in the event of foreign investors failing to live up to agreements.

Elsewhere, people may not have formal title to the land on which they depend, but instead use it under customary tenure arrangements. As a result, they are frequently pushed off the plot so that the official ‘owner' of the land can profit from the sale or lease to the investor.

According to IRIN, the UN's humanitarian information news service, the lease of coastal wetlands in Kenya by Qatar threatens to displace thousands of locals who use the region for produce and livestock farming. Local councillors have said they will go to court to prevent the government from leasing the property.

In Madagascar meanwhile, the IFPRI researchers write, negotiations with South Korea's Daewoo Logistics Corporation to lease 1.3 million hectares for maize and oil palm played a role in the political conflicts that led to the overthrow of the government in 2009.
Code of conduct

"It is possible to have win-win scenarios," said Ms Meinzen-Dick, "but it requires making sure that local people will at least be no worse off and hopefully derive some share of the benefits from the investment."

To this end, IFPRI has recommended a code of conduct for foreign land acquisition and is developing guidelines on negotiations with investors in tandem with the African Union. The researchers want to see transparency in negotiations so that existing landholders are informed and involved in any land deal negotiations.

There should also be respect for existing land rights, including customary and common property rights.

And when national food security is at risk, they say, domestic supplies should have priority and foreign investors should not have a right to export during an acute national food crisis.

The IFPRI-African-Union guidelines are to be presented to the continent's leaders at their July summit.

Provided by EUobserver—For the latest EU related news

Jatropha: Biofuel Wonder Plant Fails to Deliver

by Kay Sexton

May 7th, 2009


Back in 2004/2005 a lot of publicity was given to Jatropha curcas. The ugly, dwarfish little tree with toxic seeds was proclaimed as the answer to the biofuel problem, because:
(a) it could be grown in marginal agricultural conditions and
(b) there was no other use for it, except firewood, so there weren’t competing claims on it as a resource.

All this added up to a wonder scenario: grow jatropha on the world’s drought-ridden impoverished soils so that it didn’t take up space otherwise used for corn and soya which both have dual use as food/biofuel resources, lock up carbon as the trees grew and then use their seeds to meet the global demand for fuel. Sounded too good to be true …and it was.
Local use good – global trading market bad

The central American tree does indeed grow in marginal lands, but when planted in poor soil, it produces poor seed crops, and that means that without agricultural inputs, the outputs are nothing like anybody had hoped. Despite the fact that China, Brazil, Burma and Malaysia have all invested in jatropha plantations in their poorer agricultural reasons, the return on their investment is looking highly limited.

Part of the problem is that the assessment made of the productivity of the tree necessarily used trees that had survived to maturity, rather than new plantation trees. This means that the inputs to the tree (fertiliser, rain or other water, mulch or other nutrients) may have varied over time and the trees that were measured may have been given much more support, whether by farmers or by nature, than was originally factored in to the equation. Much of the world’s drought-land has become highly impoverished over the past two or three decades but may have been richer in food and water for plants in the past.

This discovery leads to the same dilemma that emerges with all other biofuels – it becomes a food versus fuel debate about whether scarce resources should be used to support food crops or crops that can be sold to produce energy.
Burma fails to deliver on biofuel initiative

In Burma, the military junta ordered the population to plant jatropha, and as a result, plantations, rice paddies and even home gardens were dug up and turned over to jatropha, in part out of fear that failure to carry out the edict could lead to fines or maybe even imprisonment. But because there is no international market, nor an established infrastructure to mill and store the oil, much of the crop grown in Burma simply rots.

However, in India, a different approach might lead to a partial answer to the dilemma. Following the example of Mali, the Indian government intends to turn 27 million acres of marginal agricultural land over to jatropha, which will then be milled locally to make lamp oil and fuel for cooking stoves, as well as providing an easily portable fertiliser made from the remnants of the crushed seed, which can be used to enrich croplands as the toxicity inherent in the tree can be broken down by micro-organisms in the soil.

Researchers are trying to improve the yield of the crop, and because jatropha has a higher energy content per gallon than other biofuels, this could be part of the answer too. But both partial answers: community use and agricultural improvement, are long-term projects: jatropha, despite the hype, will not be a contributor to fuel security on the planet in the near, or even the middle future.