Sustainable Biofuels: The Brazilian Experience and Opportunities Ahead

The Program on America and the Global Economy (PAGE) has sponsored, in partnership with the Wilson Center on the Hill and the Brazil Institute, a series of conferences over the growing importance and role of biofuels in the international market.  The conference, “Biofuels: Food, Fuel, and the Future?” was held in July to discuss the impact of ethanol production and development.  Following the conference, a subsequent publication of the same name was released, and in September, the event Classifying Biofuels Subsidies” focused on the global trade impact of ethanol production.

The following summary is from the Brazil Institute’s event on sustainable biofuels held on November 10th.  The video archive of this event, and the presentations discussed therein, can be viewed here.

On Nov. 10, the Brazil Institute hosted a seminar on biofuels, energy demands, and their implications for global climate change viewed from a Brazilian perspective.  Ambassador André Amado, undersecretary-general for energy and technology with the Ministry of External Relations, discussed the benefits of biofuels, most specifically sugarcane ethanol.

Biofuels have stimulated economic growth in rural areas, as sugarcane production has increased– creating 835,000 jobs, 95 percent of which are in the formal sector.  This expansion has also had substantial labor input, improving the standard of living for many rural laborers.  Also, ethanol production has proven not to require subsidies and can fill gaps created by other renewable energy sources.  Most importantly, increased production of ethanol has occurred alongside a substantial increase in food production, allaying fears that food production would be displaced the biofuels expansion.  To further prevent this, Brazil recently passed agro-ecological zoning laws, which vastly restrict the amount of land that can be used for sugarcane production.

Ambassador Amado pointed out that the potential benefits to be gained from increased use in biofuels are an environmental incentive: the use of sugarcane ethanol over the past 30 years has saved 850 tones of carbon from being emitted.  As demand for energy increases due to economic development, more renewable resources will be needed to meet this demand in a responsible manner.  The current world energy matrix is less than 10 percent renewable, whereas in Brazil it is closer to 50 percent.  Politically, the bulk of the world’s petroleum resources are controlled by a small number of countries, giving them an enormous amount of leverage over world energy prices – a potentially dangerous situation.  Since sugarcane can be grown in so many parts of the world (over 100 countries), increasing the number of producers would be geostrategically advantageous.  In conclusion, he pointed out the remaining barriers to bioethanol becoming a world commodity– chiefly, the lack of international cooperation and the threat to vested business interests that this new industry represents, namely the oil, food, and car industries.

Read more of this post

Advertisements

“Biofuels: Food, Fuel, and the Future?”

The Program on America and the Global Economy (PAGE) and its Global Energy Initiative together with the Brazil Institute, have held a series of conferences that have focused in whole or in part on various developments in the field of biofuels.  In the July 23, 2010 conference, PAGE turned to two scholars, C. Ford Runge and Robbin S. Johnson, both with ties to the University of Minnesota, to provide the current state of play in the development of biofuels, particularly in the United States.  A second panel moderated by the Brazil Institute’s Paulo Sotero focused on biofuels in an international context.

The conference proceedings, as well as the policy brief by C. Ford Runge and Robbin S. Johnson, can be found in our recent report entitled “Biofuels: Food, Fuel, and the Future?”

Posted by: PAGE Staff



Algae Fuel Takes Off

While America still relies heavily on traditional sources of energy like coal and oil, the Obama administration has begun to look to algae to cut down on the eighteen million barrels of crude oil per day that the country consumes.   Still considered an experimental source of renewable energy, algae has been shown to emit less carbon than fossil fuels, and can be refined in traditional oil refineries.  Also, because algae may be grown domestically, it has the potential to make America less dependent on foreign sources of energy.  Attempting to capitalize on this potential, the Energy and Agriculture Departments have given over $100 million to private companies like Sapphire Energy to develop and research algae energy.

The military is also taking steps to reduce its dependence on fossil fuels.  The Navy this past September teamed with California-based Solazyme to manufacture bioengineered algae to power its air and ship fleets.  The algae oil produced by the company has proven to reduce carbon emissions by more then 85 percent compared to regular fuel sources.  The Navy hopes that by 2020 half of its fleet will be running on a mixture of renewable fuels and nuclear energy.

Last month, Agriculture Secretary Tim Vilsack announced that in order for the Obama administration to meet its goal of producing 36 billion gallons of renewable fuel every year by 2022, it may start blending algae and grass with gasoline.  “It is our belief that in order for this industry to really become rooted…that all of the benefits that we’ve talked about accrue to all parts of the county, you’re looking at using a wide variety of feedstock, depending upon the strength and area that you’re talking about.”

However, the prices of feedstock (crops or products such as algae used for bioenergy) often rise drastically as a result of government subsidies.  At a Wilson Center event in September, Randy Schnepf, a specialist in agricultural policy with the Congressional Research Service, spoke of the difficulties in scaling biofuels usage, especially given the cheap prices of natural energy sources like petroleum.  Nevertheless, Schnepf did note that although the U.S. in 2009 only, “produced eleven billion gallons of biofuels,” contributing to about five percent of the transportation fuel system, he argued that biofuels are having “a very significant policy impact in many other markets.”

Posted by: Wesley Milillo and Michael Darden

Sources: msnbc, nytimes, cbsnews, Associated Press

Photo credit: Algae courtesy of flickr user lovelydead.

Classifying Biofuel Subsidies

With biofuels increasingly becoming part of the conversation about alternative sources of energy, the issue of subsidies for the biofuels industry is pushing the discussion from energy and agriculture, to trade policy.  On Tuesday, September 14th, Wilson Center on the Hill and the Program on America and the Global Economy (PAGE) co-sponsored an event with The International Food & Agricultural Trade Policy Council (IPC) to explore biofuels subsidies and their related trade implications.

The debate about biofuels subsidies currently centers on whether or not they should be classified as agricultural subsidies. As part of the Doha round of trade negotiations, some products that are used in biofuels production are considered “energy products” and others are considered “agricultural products.”  The discrepancy is due to a lack of transparency and communication between member-states and the World Trade Organization.  Because different rules apply to the different classifications, the issue will have ever more important implications throughout the developed and developing world as the market for biofuels increases. Read more of this post

Biofuels, Subsidies, and Jobs

Like most everything else in our current political climate, biofuels have emerged as a contentious issue for all those concerned.  Farmers argue that the needs of local owners are paramount.  Politicians argue that extending biofuels subsidies will help produce much needed jobs.  Economists, meanwhile, argue that these subsidies preclude greater investment in green technology, increase farmland use- raising the cost of food, and eschew energy independence.

At the Wilson Center earlier this year, C. Ford Runge, Distinguished McKnight Director of the Center for International Food and Agricultural Policy at the University of Minnesota, spoke of America’s biofuels subsidies.  He noted the current inefficiencies of biofuels  and stated that “to fill the tank of an SUV with ethanol will require enough corn to feed a poor family in a developing country for a year.”  At a later event, Randy Schnepf, an agricultural policy specialist at the Congressional Research Service, explained that ethanol in the U.S. represents 97 percent of all biofuels production.  He also noted the market-distorting effects on food prices due to biofuels subsidies.

Despite these criticisms, the Obama administration remains stalwart in supporting biofuels as a means to achieve energy independence.  According to Agriculture Secretary Tom Vilsack, “Advancing biomass and biofuel production holds the potential to create green jobs, which is one of the many ways the Obama Administration is working to rebuild and revitalize rural America.”

Posted by: Wesley Milillo

Sources: Environmental Protection Agency, The Mountain Mail, The New York Times, Washington Monthly,

Photo credit: Corn of the Children courtesy of flickr user Whatknot.

Classifying Biofuel Subsidies: Farm Bill and WTO Considerations

Agenda

September 14, 2010

Presented by The Woodrow Wilson Center’s Wilson Center on the Hill and Program on America and the Global Economy and The International Food & Agricultural Trade Policy Council

Tuesday, September 14
12:00-1:15 p.m.
B-340 Rayburn House Office Building

Governments use a number of measures to support the production and use of biofuels; in the United States biofuels subsidies totaled nearly $6 billion in 2009. Corn use for ethanol in the United States has expanded corn demand by nearly 30%, driving corn prices, along with prices of other commodities, higher. Panelists will discuss whether such support should be considered as agricultural subsidies and about whether and how such support is being notified to the WTO.

Speakers:

RANDY SCHNEPF
Specialist in Agricultural Policy, Congressional Research Service

TIM JOSLING
Sr. Fellow and Professor Emeritus, Institute for International Studies, Stanford University

Moderated by:

CHAROLETTE HEBEBRAND
Chief Executive, IPC

Chair: KENT H. HUGHES
Director, Program on American and Global Economy, Woodrow Wilson International Center for Scholars

Unemployment Bill Impacts U.S. Biofuels

On July 22, 2010 President Obama signed into law H.R. 4213 – The Unemployment Compensation Extension Act of 2010.  However, to the frustration of biofuels supporters the final bill did not include the biodiesel tax credits provision of the American Jobs and Closing Tax Loopholes Act of 2010 which would have reinstated the $1.00 per gallon tax credit that expired at the end of 2009 through the end of 2010 sparking a debate as to what should and what should not qualify for renewable energy incentives.

In Massachusetts for example, the Department of Energy Resources  instructed to draft stricter rules.  Speaking at a PAGE event on July 23, C. Ford Runge commented that,  “excessive and indefensible subsidies to the biofuels sector… are the most expensive way to reduce greenhouse gas emissions.”  In light of these state and federal legislative developments, there could be far-reaching implications for biofuels developers, as well as for states trying to meet renewable energy production targets.

Posted by: Matthew Robinson

Sources: The Massachusetts Office of Energy and Environmental Affairs, The National Biodiesel Board, The New York Times

Photo credit: Biodiesel in Demming WA by flickr user skidrd