Biomass Energy Development 1
Biofuels:
Opportunities and Constraints
To Community Energy Generation
Briefing Paper Three of
Black, Brown and Green
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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
