Biofuels are currently the primary substitutes for fossil fuels. As the first generation of biofuels, made from food crops, have come under heavy fire in recent years, attention has turned towards second-generation biofuels, mainly biodiesel and bioethanol, which are made from various kinds of plant matter (e.g. whole plants, lignin or perennial grasses, agricultural and forestry residue). As these are not expected to become workable before 2015-2020, few studies have estimated future production costs and the environmental impacts of the production processes.
Using technical data from 2009, this paper assesses the potential economic efficiency of three manufacturing technologies for second-generation biodiesel in the fight against the greenhouse effect. It also estimates production costs for the three technologies and as well as related costs for reducing greenhouse gases (known as abatement costs).
The study shows that projected environmental balances for second-generation procedures are distinctly better than their predecessors in terms of impact on the greenhouse effect and other environmental impacts. However, their production costs, which have been calculated for various scenarios of raw material prices, are markedly higher that those of the first generation. Consequently, the cost per ton of CO2 saved is high. Second-generation technologies would thus require large-scale public subsidies until at least 2020.
Nevertheless, there is a great deal of uncertainty concerning many parameters, and the possible (and potentially significant) gains from lower costs due to technological advances have not been assessed in this study. Public support for research will play a critical role in helping the EU transport sector reach its target of 10% renewable energy by 2020. Such support would encourage full development of the various alternative pathways, so that public monies are not too heavily committed to a single technology.