Biofuels – the next big thing?

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An average bushel of corn makes 2.7 gallons of ethanol. By 2012 US ethanol production may exceed 5 billion gallons a year. (Scott Olson/Getty Images)

This year, biofuels are storming up the global agenda as a potentially important - some would say revolutionary - renewable energy resource. In his State of the Union speech last January, US President Bush said his country should aim to boost production of renewable fuels to 35 billion gallons by 2017, reducing dependence on imported oil by 20% over a ten year period. In Iowa, the US agricultural heartland, farmers are excited about the use of maize for the production of ethanol, and the growing popularity of E85, an 85% petrol: 15% ethanol mix now being sold in some of the country's service stations.

In Brazil there is a long history of ethanol production and the government supports the country's plans to become a major ethanol exporter. Japanese giants Mitsui and Mitsubishi are already investing heavily in Brazilian ethanol. On a visit to Brazil in May Toshikatsu Matsuoka, Japan's agriculture minister, said Tokyo is considering making its voluntary 2% ethanol petrol blend mandatory, and perhaps even raising the ethanol component to 10% by 2030.

The European Union meanwhile has set itself the target of lifting biofuels usage to 5.75% of all road fuels by 2010. In Indonesia and Malaysia, the talk is about the use of local palm oil crops for biofuels.

But is ethanol and similar fuels the way of the future its supporters claim, or just hype? A provisional answer is a bit of both. A report by UN Energy (a grouping of 20 UN energy agencies and programmes) Sustainable Bioenergy: A Framework for Decision Makers, published in April, notes that bio-energy has gone from being the specialised interest of ‘marginal innovators' to ‘a multi-billion dollar business - transforming economies - thanks to rising attention and support from governments and the public'. At the same time, however, it notes that ‘nothing human or ecological is straightforward'.

There are indeed big questions to be answered. One is whether ethanol production and use is technically as energy-efficient as the production and use of oil or other fuels. Another is whether biofuels are viable and sustainable in economic terms. And then there are even bigger questions about what ethanol expansion would do to food supplies and the environment.

Washington view

Sitting in Washington, the attraction of ethanol and other biofuels is fairly immediate. President Bush was open about what he saw as his country's need to reduce its dependence on price-volatile Middle East oil supplies. With the 2008 US presidential elections looming on the horizon, both the Republicans and opposition Democrats are eager to support alternative fuels.

A raft of different legislative initiatives proposed by both sides are now expected to come together in a new energy bill, updating legislation passed in 2005. It is expected to raise the mandate for biofuels, together with the associated subsidies for ethanol production, vote new funds for research into so-called ‘second generation biofuels' and boost energy efficiency.

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