High oil prices, energy supply security concerns, limited spare refinery capacity and targets for GHG emissions reductions have led to a surge in biofuel activity. Ethanol and Biodiesel output worldwide grew by 14% and 80% respectively in 2005 and supplied about 2% of the world’s gasoline and 0.2% of the world’s diesel markets.

According to the International Energy Agency , over the period from 2005 through 2008, the largest volumetric increase in biofuel supplies will come from established ethanol producers in Brazil and the US. Outside the US and Brazil, the largest growth in biofuels will come from the EU, dominated by biodiesel. Other countries, such as Malaysia, the Phillipines and Thailand are targeting Europe and US as potential new export markets for both ethanol and biodiesel.

well-to-wheels
While a range of estimates exists, most recent studies find both ethanol and biodiesel provide significant reductions in greenhouse gas emissions when compared with gasoline and diesel on a ‘well-to-wheels’ basis. (See: Biofuels for Transport – International Perspective, IEA, 2005). ‘Well-to-wheels’ refers to the complete chain of fuel production and use, including feedstock production, transport to the refinery, conversion to final fuel, transport to refueling stations, and final vehicle tailpipe emissions).

economics
The present costs of biofuels vary with feedstock and location. Commercial bioethanol production costs currently range from $0.25/litre ($0.94/US Gallon) of gasoline equivalent (lge) (sugarcane, Brazil), to $0.80/lge ($3.0/US Gallon) (sugar beet/UK) with corn ethanol around $0.60/lge ($2.27/US Gallon) (USA), and lingo-cellulosic ethanol from pilot scale plants claimed at $0.80/lge to $1.00/lge ($3.0 - $3.8/US gallon). Biodiesel costs range from $0.42/l ($1.6/US Gallon) (animal fats) to $0.90/lge ($3.4/US gallon) (oilseed rape, Europe; soybean, US; palm, Malaysia).