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Biofuels: Environmental and Economical Impact of Using Renewable Energy Sources in Fossil Fuel Importing Countries

N.Burcu Parlak

University of Ankara, Faculty of Agriculture, Department of Soil Science 06110 Diskapi-ANKARA

Abstract

Biofuels are alcohols, ethers, esters, and other chemicals made from cellulosic biomass and a large portion of municipal solid and industrial waste. The biggest producer of ethanol in the world is Brazil followed by USA. On the other hand, the biggest producers of biodiesel are France, Italy, Germany, Austria, and Sweden. Producing and using biofuels for transportation offers alternatives to fossil fuels that can help provide solutions to many environmental problems caused by our dependence on fossil fuels in the transportation sector. Besides environmental benefits, there are many positive economical impact of using biofuels, for example, reducing dependency on foreign oil, preventing oil supply disruptions, encouraging technology development, helping local agriculture growth, and creating domestic jobs in plant construction and plant operation.

Introduction

Biofuels are alcohols, ethers, esters, and other chemicals made from cellulosic biomass such as herbaceous and woody plants, agricultural and forestry residues, and a large portion of municipal solid and industrial waste. Biofuels for transportation include bioethanol, biodiesel, biomethanol, and pyrolysis oil. The two most common types of biofuels that are being developed and used in developed countries are bioethanol and biodiesel. Bioethanol is an alcohol, and most of it is produced by using a process similar to brewing beer where starch crops are initially converted into sugars, then the sugars are fermented into ethanol, and finally the ethanol is distilled into its final form. Biodiesel unlike ethanol is composed of fatty acid alkyl esters. Raw materials for biodiesel are most vegetable oils, animal fats, and recycled greases. (ott.doe.gov/biofuels, 2001) Majority of ethanol in the world is used in transportation sector as either direct blend in gasoline or in Ethyltertiobuthylether (ETBE) as oxygenate. Biodiesel, on the other hand, can be blended in diesel fuel or used straight in place of fossil diesel in transportation vehicles. Oxygenated fuels tend to give a more complete combustion of its carbon-to-carbon dioxide (rather than monoxide) which leads to reduced air pollution from exhaust emissions. Oxygenates were developed in the 1970s as octane enhancers to replace toxic additives like benzene and other aromatic hydrocarbons which are dangerous to health because they are carcinogenic and which are dangerous to the environment because they form highly toxic compounds during combustion. (Licht, 2001).

Environmental Impacts
The transportation sector has a significant impact on environmental quality. Air pollution, global climate change, oil spillage, and toxic waste generation are all results of petroleum-based transportation fuel use and production. Urban air pollution is likely the most significant environmental impact of transportation fuels. Transportation accounts for most emissions of many air pollutants in the United States. EPA estimates that 67% of CO, 41% of the nitrogen oxides (NOX), 51% of the reactive organic gases, 23% of the particulate matter (PM) and 5% of the sulfur dioxide (SO2) emitted in the United States are from the direct use of petroleum-based transportation fuels, primarily from cars and trucks. These emissions occur during fuel transfer, storage, and end use (combustion). Reactive organic compounds such as benzene and 1,3-butadiene are the principal air emissions from fuel storage and transfer. Pollutants emitted from combustion include CO, NOX reactive organic compounds, and small quantities of PM and SO2. In addition to the conventional air pollutants mention above, the transportation sector is also responsible for almost 30% the domestic carbon dioxide (CO2) emissions; CO2 and other gases are believed to cause climate change.

Transportation sector has also caused significant adverse impacts to land and water resources with oil spills. An average of more than 9,000 spills occurred each year in the United States from 1970 to 1990; loses of more than $1 billion were incurred from the 1989 Exxon Valdez spill of more than 37.85 million liters alone. Pollution from petroleum-based transportation fuels has enormous negative economic, social, and environmental impacts on human health, agricultural productivity, buildings, visibility, and wildlife habitats. For example, the use of gasoline and diesel fuel may cause up to 30,000 premature deaths in the United States annually; the external cost of air pollution in the United States is estimated to range from $11 billion to $187 billion annually (Wyman, 1996).

Increasing industrial activity and population growth has resulted in a rising concentration of "green house" (GHG) in the atmosphere that contributes to the "Greenhouse Effect". These gases include carbon dioxide, methane, and nitrous oxide. One international environmental agreement, the Climate Convention, will likely have significant impacts on transportation fuel market in the World. Climate Convention was a voluntary agreement between nations to reduce the risks of global warming by limiting the greenhouse gases (GHG) to 1990 levels by the year 2002. This happened in Kyoto in 1997 at the third climate conference where representatives of more than 160 nations met to negotiate binding limits on GHG for developed countries. One of the most often used arguments to promote ethanol, as a "green" fuel is that it is renewable. One aspect of ethanol's renewable nature is the carbon cycle. This concept illustrates the fact that by burning bioethanol as transportation fuel the carbon dioxide thus released is absorbed by the plants from which the alternative fuel is produced. Therefore fuel ethanol consumption is considered CO2 neutral. But, GHG debits arise during the process of crop production to consumption as a biofuel in vehicles because of the use of agricultural chemicals, fuelling of farm machinery, transport of the crop, processing of the crop, drying of liquid wastes, and transport of the ethanol. All this involve the use of fossil fuels and hence GHG emissions. The problem resembles the one about the net energy value off ethanol. Results are very much depends on the nature of the feedstock and the source of power used for production process. Similarly, it may be analyzed through a full life-cycle analysis.

The use of ethanol-blended fuels as E-85 (85 per cent ethanol and 15 per cent unleaded gasoline) can reduce the net emissions of GHG by as much as 25 per cent. The reduction is attributable to carbon sequestration during corn farming, which more than offsets GHG emissions during corn farming and ethanol production. Ethanol-blended fuel as E-10 (10 per cent ethanol and 90 per cent gasoline) can reduce GHG up to 3.9 per cent. Agricultural grain production for ethanol may generate a slight increase in nitrous oxide (N2O) emissions resulting from heavy fertilizer use. N2O has a high global warming-potential - a measure to enable different GHGs to be compared to each other and expressed in CO2 equivalents. However, research and advances in agricultural technology in grain production are resulting in a reduction of these emissions, often to levels below other common crops. The net effect of ethanol use still results in an overall decrease in greenhouse gas formation (Licht, 2001).

Particulate emissions of biodiesel are measured as 20% to 39% lower than low sulphur fossil diesel and 10-29 % lower than ULSD (Ultra Low Sulphur Diesel). SOX emissions: These from biodiesel are at least 80% lower than low sulphur fossil diesel and are comparable or lower than ULSD due to the negligible sulphur content of biofuels. NOX emissions from biodiesel are slightly higher than those from low sulphur fossil diesel. However, evidence from the European Union shows emissions of NOX from ULSD to be marginally worse than low sulphur fossil diesel. Therefore introduction of this fuel will bring to the bio and fossil fuels more in line. Advancing injection timing can significantly reduce emission of NOx from biodiesel. Catalytic converters to reduce emissions from fossil diesel also function effectively with biodiesel (Clery, 2001). In Turkey, benzene is still used in blends as an octane enhancer in gasoline replacing lead. As planned, full replacement of lead in gasoline will be completed as in 2005 (F.Somunkiranoglu, Ankara MoEnvironment, 2001 personal communication).

Economical Impacts
The 1970s was a decade of dramatic changes in the world energy sector. An oil export embargo by Middle Eastern producers shocked the developing countries economy. Per barrel prices of oil rose from roughly USD 3.0 to USD 13.0. As oil and gasoline prices soared, fuel users began to look for alternatives. Brazil, as the world's third most energy dependant country, in 1974 launched the world's first major ethanol program (proalcohol) for production of renewable fuels. The implementation of the program was based on several key factors as energy independence, currency savings as well as political reasons. Sugar from cane is the major feedstock use in Brazil. Besides reducing dependency on foreign oil Brazil's program was aid to support agriculture community. Today, Brazil is the biggest producer of ethanol in the world with 12.5 million liter, followed by USA with 7.1 million liter in 2001.

As seen in Table 1, Turkey heavily depends on foreign oil. Approximately 86% of Turkey's oil demand is imported. Biofuels are an alternative to reduce oil imported countries trade deficits. It might be possible to establish a local industry to substitute for some portion of approximately 23 million tons of petroleum that Turkey currently import each year to meet its energy needs. Biofuels are produced domestically; they also provide the opportunity for local, regional, and national energy self-sufficiency across the Turkey. Turkey's agricultural community will stand to benefit as well when biofuels are made from crops and agricultural residues, providing options for new valuable crops and new uses for existing crops and residues (MoEnergy and Natural Resources web site, 2002).


If the economics were favorable, producing ethanol might provide a basis for establishing alternative uses for agricultural lands that are coming out of production and may generate new sources of employment in the agriculture sector. If the economics did not support production of ethanol as a single output, ethanol production might be a viable co-product with other agricultural-based products such as sugar, fiberboard, or diversified agriculture. Ethanol production from local feedstocks may offer an opportunity to develop new businesses and provide some economic diversification in rural areas (Shleser, 1994).

a) Increase in net farm income due to the demand for ethanol: The demand for ethanol has had two positive impacts on farm income. First, the demand for ethanol raises the price of feedstocks. Second, higher feedstock prices have increased the amount of feedstock acreage planted and harvested, thus boosting the size of the total crop.

b) Increase in jobs due to higher farm income: The increase in farm income stems from two sources: an increase in feedstock production, and a higher price for feedstock. It should be noted at this point that most of the newly created jobs, while they do occur in the farm belt, are non-farm jobs. However, many of the other jobs are tied directly to the farm sector, including manufacturing and selling seed, fertilizer, machinery purchases, repairs, and soon. In addition, a boost in farm income will result in an increase in non-farm goods and services as disposable income rises (Evans, 1997).

c) Increase in jobs due to operating biofuel plants: Using the industry estimate of 1 employee per 1 million liter per year plant capacity. The multiplier for food manufacturing averages is 2.77, which would generate a total of more than 3,000 additional jobs in Turkey given the fact that Turkey replaces its 10% of transportation fuel with biofuels. Effect on GDP would be very considerable.

d) Decline in budget deficit: The rise in increased tax revenues because of a higher level of GDP, minus the drop in unemployment benefits, minus the subsidy paid to gasoline refiners and blenders (Evans, 1997).

e) Improvement in foreign trade balance: The increased reliance on domestic sources of motor fuel reduces the dependence of the Turkish economy on foreign energy sources. This would give Turkey a strategic advantage in world politics.

Conclusion

Turkey is a net importer of animal protein, which can be replaced with supply of feedstock by-products of corn and wheat. Ethanol is mainly produced from three different sources of feedstock: sugar based (sugar cane, sugar beet, molasses, food-processing liquors), starch based (corn, wheat, barley, potato, rice, etc.), and lignocellulosic based biomass (paper and wood waste). Major feedstocks used in ethanol production in the World today are corn, sugar, and wheat. Turkey is one of the world's major wheat exporters (MoAgriculture, website). Therefore, wheat is the most likely feedstock for ethanol production with 817.000 tones net export in year 2000. Economically, using wheat for ethanol production makes more sense, as it is the cheapest raw material with higher starch content. Other most likely feedstocks are sugar beet and barley. With Turkey's new Sugar Law in effect in September 2002, there will be surpluses of sugar beet, which can also be used for ethanol production. However, production costs of biofuels are still more expensive compared to gasoline and, therefore, it needs tax incentive or subsidies in order to promote production. Excluding Brazil, almost all countries in the world producing ethanol has some sort of tax credit system. In summary, proponents of fuel ethanol programmes point out to the overall social and economic benefits that are produced. These include:
    · A reduced dependence on imports of foreign oil;
    · Alternative market opportunities for agricultural crops;
    · Rural economic development including job creation and increased rural income;
    · Environmental benefits (reduced emissions of carbon dioxide, carbon monoxide emissions and ozone-causing gases);
    · The displacement of dangerous and environmentally damaging components in gasoline, such as benzene and MTBE;
    · The replacement of fossil fuel with renewable fuel; and
    · The removal of concerns about environmental hazards associated with exploration of fossil fuels and with tanker movements of imported oil (LMC Report, 2002).
References

. Clery, P.2001. Green fuels Challenge-Submission for Biodiesel and Bioethanol. BABFO British Association of Bio Fuels and Oils. UK. pp.2-12
. Evans, M., 1997. The Economic Impact of the Demand for Ethanol. Kellogg School of Mng. Illinois USA, pp. 1-10.
. Licht, F.O., 2001. World Ethanol Markets Analysis and Outlook .F.O.Licht. Kent UK,pp. 26-28.
. LMC, 2001. LMC International Ltd., Main Report: The World Market for Ethanol. LMC International Ltd. Oxford, UK. pp. 26
. OFD, 2001. Biofuels Programme. Office of Fuels Department. Ott.doe.gov/biofuels.
. RoT Ministry of Agriculture and Rural Affairs Web Site: http://www.tarim.gov.tr
. RoT Ministry of Energy and Natural Resources Web Site:http://www.enerji.gov.tr/dogal/petrol.htm
. Shleser, R., 1994. Ethanol Production in Hawaii. Hawaii State Department of Energy, Grant No.DE-FG49-80-CS62013, Honolulu Hawaii. pp. 1.
. Wyman, C.E., 1996. Handbook on Bioethanol: Production and Utilization. Taylor&Francis. Washington D.C. USA, pp.27-31.

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