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Biofuels: Opportunities and Constraints To Community ... ... The most common biofuels are ethanol and biodiesel. Biodiesel is manufactured from plant oils (soybean oil, cottonseed

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  • Biomass Energy Development 1

    Biofuels:

    Opportunities and Constraints

    To Community Energy Generation Briefing Paper Three of

    Black, Brown and Green

    65 Broadway, Suite 1800, New York NY 10006 | (212) 248-2785 www.centerforsocialinclusion.org

    FOR IMMEDIATE RELEASE

    For more information, contact:

    Mr. Denis Rhoden Jr. M.B.A, AICP The Center for Social Inclusion New York, NY 10006 [email protected] 646.442.1457

    Ms. Jeanne Baron The Center for Social Inclusion New York, NY 10006 [email protected] 646.442.1454

    October 2009

    http://www.centerforsocialinclusion.org/

  • Biofuel Energy Development 2

    Table of Contents Renewable Energy is Black Brown and Green ............................................................................. 3

    Technology Prospects .................................................................................................................. 5

    Why Distributed Generation Works for Communities ................................................................ 6

    Biofuels as a Distributed Generation Source ............................................................................... 8

    Opportunities ............................................................................................................................. 10

    How Policy can Help Communities ............................................................................................ 11

    Suitability ................................................................................................................................... 12

    Entry Risks .................................................................................................................................. 13

    Build Out Costs ........................................................................................................................... 15

    Hurdles ....................................................................................................................................... 16

    Longer Term Look Ahead ........................................................................................................... 18

  • Biofuel Energy Development 3

    Renewable Energy is Black Brown and Green Black, Brown and Green, a program of the Center for Social Inclusion, explores the

    economic opportunities and hurdles facing green business models serving

    communities of color. Black Brown and Green will offer resources to help

    communities and companies identify their needs and develop a strategy to enter

    the Green Energy Sector.

    Policy makers, investors and stake holders need a firm grasp of business structures that

    protect community control. They also need strategies for raising the right type and levels of

    capital, and knowledge of accessible technology. Promoting control and ownership of the

    green energy supply by communities of color enables these communities to share in the

    tremendous economic potential of the green energy market and adds depth to the broader

    economy.

    Businesses and communities must lay a foundation for success, one that expands and

    strengthens individual and community prospects today. The third paper in our series,

    Biofuels: Opportunities and Constraints To Community Energy Generation, explores the

    environmental, economics, technology and policies shaping the process of converting crops

    and waste feedstock into energy. The briefing paper examines outlines the forces enabling

    community commercialization as well as the hurdles to participation in the biofuels segment

    of the Green Energy sector.

    About CSI The Center for Social Inclusion is a national policy advocacy organization with the goal of

    building opportunity for all by dismantling structural racism. We perform applied research,

    conduct trainings, support the development of multi-racial alliances and networks, and

    develop transformative policy models.

    Policy makers,

    investors and stake

    holders need a firm

    grasp of business

    structures that protect

    community control

  • Biofuel Energy Development 4

    Environmental Overview What is biofuel? The most common biofuels are ethanol and biodiesel. Biodiesel is

    manufactured from plant oils (soybean oil, cottonseed oil, canola oil), recycled cooking

    greases or oils (e.g., yellow grease), or animal fats (beef tallow, pork lard). Biofuel energy

    derived as ethanol is primarily made from corn (in the United States). Biofuels offer the

    following environmental advantages: 1

     It is renewable.

     It is energy efficient.

     It displaces petroleum-derived diesel fuel.

     It can reduce global warming gas emissions.

     It can reduce tailpipe emissions, including air toxics.

     It is nontoxic, biodegradable, and suitable for sensitive environments.

    Replacing fossil fuels with biofuels can result in a much cleaner fuel supply chain and a better

    protected environment. For instance, biofuels based on soybean oil as the raw material, also

    known as a feedstock, produces 71% fewer life-cycle emissions per gallon compared to a

    gallon of petroleum diesel. When the indirect land impacts are included, soybean-based

    biodiesel would reduce greenhouse gas (GHG) emissions by 34 percent%.2

    Using animal fats and recycled greases instead of agricultural crops results in greater GHG

    reductions than crop feedstocks, such as soy, because energy inputs (e.g., fertilizers and

    farming equipment) are not directly needed to grow feedstock. They also have the added

    benefit of recycling waste products. Feedstocks used in biodiesel production vary by region.

    Canola oil is generally used in Europe, soy oil in North and Latin America and palm oil in

    Southeast Asia. Biodiesel can also be produced from numerous other feedstocks including

    1 National Renewable Energy Laboratory, Biodiesel Use and Handling Guide 4

    th Edition 2009

    2 California Air Resources Board (CARB). “Detailed California-Modified GREET Pathway for Biodiesel (Esterified

    Soyoil) from Midwest Soybeans,” 2008.

  • Biofuel Energy Development 5

    vegetable oils, tallow and animal fats, restaurant waste (“yellow grease”), and restaurant trap

    grease (“brown grease”).

    Biofuels can be categorized in three major groups:

     Conventional (Primarily ethanol and biodiesel)–Conventional fuels are produced from

    mature technologies with decades of commercial production history in the US, Brazil,

    and Europe. Biodiesel production is small–and growing–and located in Europe.

     Renewable diesel–Produced by hydrotreating vegetable oil or animal fat within a

    conventional refinery. Renewable diesel is chemically distinct from conventional

    biodiesel. Neste Oy, Petrobas, ConocoPhillips, BP, and Eni are in the process of

    developing this technology for commercial production.

     Next generation–Biobutanol (more energy dense ethanol substitute that can work in

    today’s gasoline powered engines), cellulosic ethanol produced from non-edible plant

    feedstock, and synthetic diesel produced from biomass. Large scale Federal and

    venture capital investment is fueling innovation in this group.

    Technology Prospects In comparison to technology used to generate fuel from other renewable energy sources the

    technology used to produce biodiesel is relatively simple and well-developed. To produce

    biodiesel the feedstock is chemically treated in a process called transesterification (see

    graphic on page 6), in which the oils or fats are combined with an alcohol (usually methanol)

    and a catalyst to produce fatty acid methyl esters. Virtually all biofuels produced today are

    based upon conventional, mature technology.

    Biodiesel is similar to conventional petroleum-based diesel fuel and can be used in

    compression-ignition (CI) engines with little to no modification. While it can be used alone as

    pure biodiesel (“B100”), it is often blended with petroleum-based diesel fuel.

  • Biofuel Energy Development 6

    Why Distributed Generation Works for Communities Today’s energy supply is often generated in large facilities and flows in one direction, from

    central power stations to transmission and distribution facilities and then to consumers (see

    graphic on page 7). Changes in technology, consumer preferences and recently regulation are

    changing this structure. Distributed generation is a well developed cooperative concept, but

    in energy terms, it refers to the option for energy consumers to use and sell the energy they

    generate to other consumers. This approach to harnessing and distributing energy from many

    small energy sources is fueling new market opportunities and enhanced industrial

    competitiveness.3 This model raises an exciting question, “how can consumers also act as fuel

    producers? “ There is more than one answer to this question, and each raises the prospect of

    new economic relationships that have the pot

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