Clarifying the Potential of


Cliff Spencer

World Biofuels Markets 2011

24 March 2011

Rotterdam, Netherlands

United Nations Foundation

• A public charity, created in 1998 by entrepreneur and philanthropist Ted

Turner, connecting people, ideas, and resources to help the UN solve global problems. We help the UN take its best work and ideas to scale— through advocacy, partnerships, community-building, and fundraising.

Global Biotechnology Transfer Foundation

• Assists in the transition from fossil fuel-based economic development to sustainable bio-based economies, which will offer opportunities for long-term economic growth through enhanced use of renewable, sustainable resources.

Options for 2030?

• Globally, we will invest US$16 Trillion in energy between now and 2030.

• Without changes in policies, investment structure and innovation, fossil fuels will continue to dominate the global energy sector.

• An estimated 2 billion people will still lack access to modern energy services.

• We need a broad mix of energy options to change this picture – and bioenergy must be among them.

Biomass’s Potential

In IEA scenarios, biomass is expected to play an increasingly important role in the energy sector.

• According to the World Energy Outlook 2009

450 Scenario, biomass is projected to provide

13.6% of TPES in 2030 .

Source: IEA, Information Paper, “Sustainable Production of Second-Generation Biofuels: Potential and perspectives in major economies and developing countries”

Realizing the Promise

• Food price volatility impacts public perceptions of biofuels

– e.g. if 40% of the US corn crop is going to ethanol now – it must be the problem.

• Deforestation in Indonesia is correlated with EU biodiesel mandates.

• NGOs have done a good job highlighting some facts but not all.

• Second generation feedstocks are not in production.

• Structure of energy markets, input costs, and global economic crisis have all slowed any shift to modern bioenergy.

Politics of Mandates

• The US and EU focus on transport fuels reflects reality that there are no substitutes for some level of oil-based fuels, given existing transport technology.

• The mandates also target important political constituencies

(farmers, processors).

• Mandates are symptomatic of larger policy distortions in both the agriculture and energy sectors – and the broader economy.

Bioenergy Industry Stands Ready

• Boosts job creation and economic development, particularly in rural areas.

• More than 50 countries worldwide have put in place targets and/or mandates for bioenergy production.

– The U.S. EPA RFS requires 36 billion gallons of renewable fuel production by 2022.

– EU Renewable Energy Directive (RED) mandates

20% share of renewable energy sources in energy consumption by 2020 and 10% binding minimum target for biofuels in transport sector.

U.S. EPA RFS Mandate

The EU, National overall targets

Energy Markets and Mandates

• EU mandates create markets for ethanol and biodiesel –

EU agricultural land is limited.

• US mandate is domestic; but Brazil could supply product more cheaply – if market wasn’t restricted.

• Global energy market accounts for 52% of world trade; developing countries saw export opportunities.

• With limited access to modern energy services, exporting biofuels makes little sense.

• Debate should focus on all bioenergy potential rather than transport fuels.

Biofuels: Myth v. Reality

• Public believes biofuels from corn, cane and palm oil repurpose food production.

• Public perceptions need to change.

• This is critical because biomass, in many forms, is an important part of bioenergy – and will continue to be so.

• Biofuels may yet be a significant element in global transport, but bioenergy (in many forms) could play a significant role in our energy future – with the right policies and investment.

Liquid Biofuels

• Improve energy mix

• Reduce dependence on imported oil

• Create jobs; raise rural incomes

• May improve air quality in right blends

• May create trade opportunities

• In developing world, power is priority

• Available technology doesn’t permit use

• Diesel dominates transport

• Ethanol used in POVs

• Biodiesel lower volumes per hectare

• Cost constraints – growing obstacle

Food Facts

• Most food is grown and consumed locally, especially in the developing world.

• African yields per hectare are low; production increases locally would improve availability.

• Grains and edible oils, comprise the bulk of global food trade – less than 10% of world trade (by value).

• Global markets govern prices – and import-dependent developing countries are most vulnerable to these shifts.

• US corn is primarily used and exported for animal feed; less than 10% is actually consumed as food.

• Corn and wheat, however, have some substitutability.

• Extreme weather events (Russia’s fires, Australian floods and drought) have contributed to lower global stocks.

In the US

More Facts

• Agriculture in Africa needs energy and energy-based inputs to improve productivity and encourage full agricultural development.

• Diversified agriculture strategies that depend on a range of crops can contribute to both agricultural productivity and energy availability e.g. multi-cropping, intercropping, relay cropping (undersowing), cascade management etc.

• To feed a world population of 9 billion people food production will have to increase by between 70 and 100%



• Land and watershed management will be a key component of this effort e.g. biofertiliser production, soil maintenance and improvement, efficient water preservation and utilisation etc. – perennial bioenergy crops that also fix nitrogen offer a high potential for improving soils, productivity and energy access.

1. Connor, Steve, “2.4 billion extra people, no more land: how will we feed the world in 2050?”

The world produces enough food to feed everyone

World agriculture produces 17% more calories per person today than it did 30 years ago – despite a 70% population increase.

Factors contributing to hunger:

• Lack of sufficient income to purchase enough food

• Political instability

• Extreme weather events that damage crops

• High price of oil – according to the Executive Director of the

UN World Food Programme, the price of oil has a direct impact on the amount of hunger in the world. High oil prices drive up the entire value chain of food production—from fertilizer, to diesel for tilling, planting and harvesting, to storage and shipping.

Sources:; 25 x ‘25

Bioenergy – it’s not just about cars

• Nearly three billion people rely on traditional biomass for their cooking/heating needs.

• 1.6 billion people do not have access to electricity.

• While biomass provides 12.7% of global total primary energy supply, in Africa and South Asia it provides as much as 70% of energy supply.

• Much of the biomass is wood or agriculture waste – and actively promotes deforestation.

• Our current use of biomass is unsustainable; but biomass will remain in global energy mix.

Sustainable Use of Bioenergy

• Could improve energy access in underserved areas – urban poor, rural off-grid communities.

• Improve countries ability to reduce impacts of climate change.

• Contribute to climate change mitigation.

• Increase employment in rural and peri-urban areas.

• To succeed, bioenergy must be included in an integrated development strategy that involves all sectors (energy, transport, agriculture, etc.) and stakeholders (farmers, consumers, and processors).

NGOs are hostage to the moment

Biofuels – especially from palm oil – have been a target. Why?

Because they have very narrow mandates – not sustainable development – but defense of the


NGOs oppose biofuels so companies won’t put in palm plantations, but with no strategy to improve livelihoods forests are cut down anyway.

Biofuels & Developing Countries

• Brazil, China, Thailand, and India are among the developing countries that have already successfully developed a firstgeneration biofuel industry.

• A few developing countries are undertaking RD&D in secondgeneration biofuels.

– A pilot plant has been set up in Brazil.

– China has two pilot plants in operation.

– In Thailand, research is currently underway in several universities.

• Trade opportunities of second-generation biofuels with the EU and the US are likely to grow – as production in these regions is expected to fall short of domestic demand.

Source: IEA, Information Paper, “Sustainable Production of Second-Generation Biofuels: Potential and perspectives in major economies and developing countries.”

Engaging Stakeholders

• Bioenergy can support economic development, particularly in rural areas.

• NGOs play an important role in ensuring bioenergy policies and projects support human development and empower local communities.

• NGOs participate in sustainability initiatives such as Roundtable on Sustainable Biofuels, Roundtable on Sustainable Palm Oil,

Roundtable on Responsible Soy, Better Sugarcane Initiative and

Forest Stewardship Council.

Sustainability is good for communities, the environment &


Business & Sustainability

• Cargill – set goal to buy 60% of its total crude palm oil from Roundtable on Sustainable Palm Oil (RSPO) members by the end of 2010.

• Unilever – pledged to purchase all of its soy beans from sustainable sources by 2014.

• Home Depot – sells more Forest Stewardship Council

(FSC) certified wood than any retailer in America.

• Roundtable on Sustainable Biofuels (RSB) will soon begin offering certification for sustainable biofuels.

UNF efforts in support of sustainable bioenergy production and use

• Assessment of bioenergy potential in eight West African countries

• Co-developed a BioEnergy Evaluation Tool (BEET) that helps policymakers quickly perform analyses of economic, environmental, agricultural and energy impacts of bioenergy policy options

• Member of the Global Bioenergy Partnership (GBEP), which is working to develop sustainability indicators

• Founding member of the Roundtable on Sustainable Biofuels (RSB)

• 25 x ’25 & Solutions from the Land Initiatives

• Energy access campaign in support of the UN resolution declaring

2012 the “International Year for Sustainable Energy for All”

• Launched the Global Alliance for Clean Cookstoves in 2010

Thank You!

Cliff Spencer