Wednesday, January 25, 2012

The Problem With Biodiesel

I have mentioned before on this blog that for the largest American culprit of the biofuels-oriented "food-fuel substitution" argument, corn ethanol, I don't think the argument is as watertight as I once did. However, one point I feel that I did not emphasize enough is that in many cases - most outside of the United States - there is a clear and observable food-fuel substitution going on. One of the most obvious culprits is biodiesel.

Over the weekend, Michael Pollan (of The Omivore's Dilemma fame) posted "The problem with ethanol." on his twitter account. I don't use twitter and don't know if anyone's replied to him, but regardless I feel I must point out the colossal error that Pollan commits: the SciAm pictures concern palm plantations and land expropriation for biofuels, but not for ethanol. Palm plantations produce palm oil, and palm oil for biofuels is, one way or another, turned into biodiesel, for which virtually the only export market is Europe. It's only one negative aspect of the knock-on effects of biodiesel standards in the EU - and digging deeper, there are many others as well.

As part of its renewable fuels standards, Europe now demands prodigious quantities of biodiesel (since diesel is the dominant form of fuel in Europe), the feedstock for which can be used oil and rendered fat or virgin vegetable oils. Using the former as a feedstock is an excellent way to recover energy streams that would otherwise be discarded. Using the latter quite literally takes food products out of the mouths of people. With few exceptions (jatropha and castor oil among them), virgin oils used to make biodiesel are diverted from human consumption.

Europe does not make enough of its own oil, so it imports it from other places - places like Indonesia and Guatemala, where large agribusinesses are burning rainforests and taking over arable land currently used for subsistence farming to plant palm oil plantations. Actions like these spit in the face of any effort to mitigate climate change, and cause direct harm to those least able to tolerate it.

I used to work in biodiesel research; in that light, it's weird for me to increasingly see myself coming out against any reliance on biodiesel as a major future fuel. It really comes down to the quantity of resources available. Biodiesel is a useful way to recover the energy in used vegetable oils, yellow grease, and rendered animal fats. Beyond these resources, which are conveniently concentrated in heavily populated areas, natural oils are a vanishingly small fraction of total agricultural productivity, and have a correspondingly low yield. Producing them for fuel is both inefficient and exploitative. Algae might provide the answer as they produce prodigious quantities of oil, but I have already come out as an algae bear.

I have no idea of the relative rate of utilization of used oils in Europe for biodiesel. It may seem like a no-brainer from a resource perspective, but from a capital investment perspective building a plant that can handle waste fats and oils costs substantially more than one that can handle only virgin oil. In the United States, the vast majority of plants constructed in the first-generation biofuels bonanza were virgin oil-based, but the vast increase in demand for oils put a feedstock crunch on many biodiesel manufacturers that put them out of business. Only those plants able to handle cheaper marginal fuels stayed in business.

Within Europe, however, no such pressures exist, as they rush to meet their 20% biofuels by 2020 target, which explains their huge demand for virgin oil. Because of this lack of economic pressure, I am also willing to bet that a substantial amount of used oil within Europe has yet to be exploited.

Europe has managed to also make things worse through naked protectionism. By imposing massive tariffs on imported biodiesel, it's managed to shrink the used oil resource base available to it from the United States and Canada, which by and large does not use its biodiesel because the American excise tax on fuels is too low to justify it. Never mind that used oil cannot be shipped long distances due to rapid oxidative degradation, never mind that the desperately poor countries that could also produce the oil could more cheaply produce the biodiesel, Europeans need to have jobs at the expense of everyone else on the planet.

This is food-fuel substitution at its most obvious and worst. Not only are they using crops that are, by and large, exclusively feeding humans and not animals, Europe doesn't have to worry about causing indirect land use change, it's got plenty of direct land use change to add to its tally of misguided environmental initiatives.

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