April 26, 2017
In the last decade, environment safety norms and regulations have been implemented for industrial and commercial activities. Environment safety has become an important aspect as far as industrial and commercial activities are concerned. The fuel and gas industry have also stepped up their efforts to manufacture efficient fuel alternatives in the last decade. The demand for second generation biofuels is one the rise for their energy efficient output in comparison with the conventional fossil fuels. Further, the governments in North America and Europe have shown active interest in the development of second generation biofuels and have also funded these projects. Commercialization of second generation biofuels will boost the prospects of the industry worldwide. Biofuels such as biodiesel is in the nascent stages of commercialization whereas biobutanol and BioDME are in the laboratory/pilot production phase.
Biodiesels are forecasted to occupy a large chunk of the market owing to its environment-friendly properties, high yield of feedstock, and its ability to reduce GHG emissions. A recent report published by Allied Market Research offers useful insights related to the second-generation biofuels market such as the market share, size and growth. Further, the current trends and the growth opportunities within the industry is highlighted in the report. Industry players operating in the market are setting up manufacturing plants to seize the numerous lucrative opportunities that are emerging as R&D activities have stepped up to boost the biofuels market.
Biofuel policies in the EU
The EU has expressed its desire and agenda to reduce the emission of greenhouse gases. The EU stated that GHG emission must be monitored and regulated in the next 30-40 years. The transportation sector contributes around one fifth of the total emissions worldwide and has sent an alarming signal to several countries in the European region. Countries in the EU have supported the different schemes that need to be implemented to reduce harmful emissions. In 2008, The Climate and Energy Package was adopted by the EU that includes a 10 % binding target to make use of renewable sources of energy in the transportation sector by 2020. Renewable energy directive ensures that second generation biofuels are commercially available in Europe.
The biofuels market in the region is dominated by diesel. However, Sweden is active in the ethanol sector for quite some time now. The policy measures include the promotion of high-blend or pure biofuels and low blends that are compatible with the current distribution infrastructure and engines, and investment in technology, research and development. Sweden produces ethanol and imports it from Brazil. The aim of the nation is to use first generation biofuels as a bridge to second generation ethanol. Biofuel obligations and tax exemptions that are implemented require fuel suppliers to include a specific level of biofuel in fuel and has been adopted by multiple EU Member States. The EU commission encourages that these obligations can eventually reduce the cost of promoting biofuel. Several Member states have introduced excise tax exemptions for the biofuels that are produced in the European region at different levels up to 100%. Germany is one of the few countries in the region with privileges for excise tax for second generation biofuels. In 2008, there were around 170,000 flexible-fuel vehicles in the EU out of which 70 % were in Sweden. The focus of Sweden’s research includes the use of renewable fuels in the transport sector and seeking innovative and novel techniques to do so. The other countries that are involved in the production of ethanol in the EU include Spain and France. In Spain, the national governments offer subsidies for plant construction and have also exempted the alcohol that is used for biofuel from taxation. In addition, France has implemented tax treatment and blending quotas to boost the development of biofuel production and consumption.
The EU Member States are actively working on the promotion, production and applications of second generation biofuels. The European region will remain an important market for the second generation biofuel industry.
Second generation biofuels – Cost-effective and efficient
In the last decade, environment-safety regulations have urged manufacturers to produce cost-effective, energy-efficient and greener biofuels. Several manufacturers are turning to streamlining their production activities that focus on production of cleaner and efficient biofuels. Moreover, R&D activities also focus on the development of biofuels that are environment-friendly.
A study presented by the researchers at the Brazilian Bioethanol Science and Technology Laboratory revealed that investment in ethanol production from waste biomass could potentially have tremendous environment advantages. The group of researchers discovered that ethanol that is produced by utilizing waste biomass such as a dying tree or a dead tree is cost-effective and could have added advantages in the long run compared to the conventional practices followed to produce ethanol. According to the research team, by making use of waste biomass to produce ethanol instead of gasoline, it is possible to reduce greenhouse gas emissions by around 80%. This comes as a boost to the commitment of the Brazilian government that is actively working to increase the regions use of sustainable biofuels to decrease greenhouse gas emissions. Traditionally, first generation (1G) process that uses sugarcane and corn is used to produce ethanol. However, the trend is gradually changing as more production plants are coming up that make use of the second-generation biofuels or processes. The research team compared the two processes and found out that the greenhouse gases emitted by the first-generation biofuel is higher compared to the second-generation process. Several manufacturers are gradually making use of second generation biofuels to produce ethanol in an efficient manner.
Second-generation biofuels likely to reduce emission
Perennial grasses, Miscanthus and switchgrass are second-generation biofuel crops that can reduce emission without displacing land that is used for food production. A group of researchers at the University of Illinois revealed the same in their study termed as “Nature Energy”. Around 16 billion gallons of second-generation biofuel-fuels that are derived from plant stems and leaves and 15 billion from ethanol by 2022 is the annual production goal of the U.S. Environmental Protection Agency’s Renewable Fuel Standard. The new goals set by the organization is likely to reduce the transportation emission by around seven percent in the U.S. A study author said, “Greenhouse gas savings from bioenergy have come under varying levels of attack, and this paper goes a long way to showing that contrary to what some are saying, these savings can be potentially large if cellulosic biofuels from dedicated energy crops meet a large share of the mandate. This is a viable path forward to energy security, reducing greenhouse gases and providing a diversified crop portfolio for farmers in the U.S. According to the researchers, second generation biofuels could potentially reduce the emission of greenhouse gases that are emitted when corn is used for the same. Approximately the emission of greenhouse gases will be reduced by around 7 to 12 percent.
The second-generation biofuels market will witness a significant growth in the future. They are cleaner and cost-effective compared to first generation biofuels. Research and development would create several opportunities in the long run making it an exciting and lucrative industry for investors, market players and individuals involved with second generation biofuels.Blogactiv Team