North America

North America is the largest producer of biofuels thanks to ethanol production in the United States. Canada has long supports biofuel production for its environmental benefits. Mexico is looking to expand biofuel capacity given that its climate is ideal for growing Jatropha

United States

The United States is the world’s largest producer of biofuel and thus the leading producer in North America. The U.S. primarily produces ethanol from corn, but also produces biodiesel from grain stock. It is also a leader in the development of advanced biofuels, particularly algae-based fuels.

Ethanol

The U.S. is the world’s largest producer of ethanol for both consumption and for fuel uses, producing around 13.9 billion gallons or nearly 53 billion liters of ethanol per year. Most U.S. ethanol is produced from corn, which is one of the lower-yield feedstock. Corn produces only about 400 gallons of ethanol per acre, which is half of water sugarcane produces and only 10% of what can be produced using algae.

The U.S. government subsidizes the production of corn, which has made it cheap for many countries to import. However, with a shift in policy toward increased biofuel requirements, the supply of corn that was exported has dried up and now the U.S. tends to import corn. This has had a tremendous impact on world food supplies, leading to shortages in less prosperous nations. Particularly hard hit are South and Central American countries that have traditionally relied on corn as a food stable. Countries like Guatemala have seen increases in hunger as the price of corn has grown due to demand for ethanol.

Biodiesel

Biodiesel production in the United States has lagged behind other regions, particularly Europe. However, interest in the production of biodiesel from the U.S. Navy has spurred some research and development. Diesel fuel is a much more popular fuel in regions outside of the United States, which has always favored gasoline. This may explain some of the reluctance of U.S. biofuel developers to branch into diesel.

Butanol

Butanol is an alcohol with four carbons as opposed to ethanol’s two. It burns more like regular gasoline and provides a better energy to weight ratio. The U.S. is working to develop algae that produce butanol as opposed to ethanol using waste CO2 from industrial settings. Vehicles require fewer modifications to utilize butanol as opposed to ethanol.

Corn is not a suitable feedstock for producing butanol because only 9.5L can be obtained per bushel of corn. Though this is near to the 10.4L of ethanol obtained from a bushel, it is nonetheless and inefficient and costly process that will threaten the food supply even more than ethanol currently does.

Government Policy

Government policy can get messy, so the basics of each act and its ramifications will be outlined in this section:

  1. Energy Policy Act of 1992
    1. Directed studies on alternative fuels to be undertaken
    2. Sets guidelines and requirements for the Secretary of Energy
    3. Authorizes several avenues by which the federal government can finance alternative energy research
    4. Sets a timeline for the adoption of certain alternative energies as well as rules for fleet program purchases of alternative fuel vehicles
  2. Energy Policy Act of 2005
    1. Increased Power of congress to regulate the biofuel industry
    2. Directed the Secretary of Energy to conduct R&D to demonstrate the commercial application for bioenergy
    3. Increased duties for Secretary of Energy and Secretary of Agriculture in regard to biomass feedstock development including
      1. Development of the feedstock themselves
      2. Development of conversion technology for cellulosic biomass
      3. Diversification into areas like cogeneration
    4. Funding for education and outreach regarding biofuels
    5. Tax credit for investment in alternative motor vehicle technology
    6. Tax credit for installation of refueling system that dispenses at least 85% ethanol by volume
    7. Requires FTC to monitor the ethanol industry for price-setting and anti-competitive behavior
    8. Provides for funding for anyone involved in the development of biofuels or related technology
    9. Established the Advanced Biofuel Technologies Program
    10. Funds demonstration projects to develop conversion technologies for cellulosic biomass
  3. Energy Independence and Security Act of 2007
    1. Sets requirements for the Corporate Average Fuel Economy (CAFE) to encourage use of more fuel efficient vehicles. Any vehicle using 20% biodiesel is eligible for a CAFE credit
    2. Secretary of Energy establishes grant program for alternative biofuels that emit at least 80% less GHG than current fuels
    3. Sets aside funding to study the effects of biodiesel on engine performance and durability
    4. Sets aside funding to evaluate and develop a fuel production and distribution infrastructure
    5. Sets a expressed wish" that renewable resources provide at least 25% of all U.S. energy needs
  4. The Food, Conservation, and Energy Act of 2008 (aka The Farm Bill)
    1. Increases funding for advanced biofuel research
    2. Biomass Crop Assistance Program
      1. Support production of dedicated cellulosic feedstock
      2. Assist agricultural and forest land owners in collection and transport of eligible material for use in biomass conversion facilities
    3. Biorefinery Assistance Program
      1. Grants and loans for development, construction, and retrofitting of commercial-scale refineries to produce biofuels
      2. Requirements for funding and evaluation of these programs
    4. Provides a tax credit for fuel blenders using certain cellulosic feedstock
    5. Reduces tax credit for ethanol blenders
    6. Extends the ethanol import tax to the end of 2010
  5. Public Law 110—353
    1. This is the act that established the Troubled Asset Relief Program
    2. Included the Energy Improvement and Extension Act of 2008
      1. Extends and increases income and excise tax credits for biodiesel and renewable diesel fuels
      2. Extends the tax credit for alternative fuel and fuel mixtures
  6. American Recovery and Reinvestment Act of 2009
    1. Provides funding to the Department of Energy for:
      1. Research into energy efficiency and renewable energy
      2. Advanced Research Projects Agency - Energy
      3. Other energy research
    2. Speeds up timeline for deployment of renewable energy and electric power transmission projects
  7. Renewable Fuel Standard
    1. Gives power for regulating fuel quality, blend, and safety to the EPA
    2. Mandated that the U.S. use 36 billion gallons of renewable fuel annually by 2022
    3. Mandated that 21 billion gallons of advanced biofuels be used by 2022
    4. Mandated that 1 billion gallons of biomass-based biodiesel be used by 2012

 

Canada

In 2010, Canada implemented a federal mandate that 5% of the gasoline pool would be replaced by bioethanol by 2011 and that 2% of diesel fuel would be replaced by biodiesel or other renewable diesel fuel. This would put Canada’s consumption of ethanol for fuel at about 1.83 billion liters and increase biodiesel consumption to 158 million liters, a 61% and 13% increase respectively. Canola oil is the major biofuel feedstock in Canada.

Energy Security

Part of the impetus for biofuel production in the United States is energy security. The U.S. consumes more petroleum than any single country and uses imports to supply its needs. Canada, on the other hand, is a smaller country in terms of population and has the world’s second largest proven oil reserves. The Canadaians are looking to biofuel in environmental terms more than anything else and seek to reduce greenhouse emissions by supplanting at least a portion of the petroleum burned in transportation.

Interestingly, Canada’s capacity for ethanol and biodiesel production is not high enough to let them reach their 5%/2% goals by 2012, which means imports will be necessary. This change is interesting because it will mean that the U.S. will be exporting fuel to Canada for the first time in recent history.

Canadian Renewable Fuels Association (CRFA)

CRFA was founded in 1984 to promote and advance the use of renewable fuels for transport in Canada. The goal is to protect the environment while creating green jobs and energy. The organization is made up of several biofuel companies and growers of biofuel feedstock as well as several traditional oil companies and environmental agencies.

Government Policy

  1. Federal Renewable Fuel Regulations
    1. Requires 5% renewable content in gasoline by 2010
    2. Requires 2% renewable content in diesel fuel by 2010
  2. Biofuels Opportunities for Producers Initiative
    1. Ended March 2008
    2. Provided assistance to farmers and rural communities to hire experts to assess feasibility and determine how to expand biofuel production capacity.
  3. ecoAgriculture Biofuels Capital Initiative
    1. Four year, $200 million program that provides up to $25 million per product for the expansion or construction of biofuel production facilities
    2. Funding for products using feedstock that have new agricultural producer equity investments in the projects equal to 5% or more
    3. Sets deadline for construction of biofuel production facilities at Sept. 30, 2012
  4. ecoEnergy for Biofuels
    1. Support for the production of renewable alternatives to gasoline and diesel
    2. Up to $1.5 billion in investment through 2017
  5. Ethanol Expansion Program
    1. Designed to increase domestic production of ethanol
    2. Provides for loans and grants
  6. Biodiesel Research
    1. Funds the construction of small demonstration plant that was turned into a full-scale commercial facility for biodiesel production
    2. Tests B-5 and B-20 biodiesel in 155 buses in Montreal to asses economic and environmental impact of biodiesel
    3. Tests two B-5 buses and two control" buses using conventional diesel over two years to assess emissions, fuel economy, and engine wear
    4. Funds projects to demonstrate how renewable diesel will perform under the colder conditions in Canada
  7. Next Gen Biofuels Fund
    1. $500 million to bridge the gap between technology and market development
    2. Supports the establishment of commercial scale demonstration facilities
    3. Funds up to 40% of eligible projects
  8. SD Tech Fund
    1. $550 million to support late-stage development of pilot plants to demonstrate clean technology solutions
    2. Repayment not required

 

Mexico

Mexico is a relative late comer to the biofuel market, but the country has some ideal locations for the growth of Jatropha. Like Canada, Mexico has been a net exporter of petroleum and has only recently put policies in place concerning biofuels.

Government Policy

  1. Biofuels Promotion and Development Laws (Ley de Promocion y Desarrollo de los Bioenergeticos)
    1. Gives the Secretary of Agriculture authority to allow corn to be used for biofuel production if certain criteria are met such as a surplus in production for the year
    2. Gives the Secretary of Agriculture authority to approve other crops for use as biofuel feedstock
    3. Gives the Secretary of Energy authority to grant permits for the production of biofuels as well as storage, transport, and distribution
    4. The law supports private investment in biofuels by loosening restrictions usually applied to such business
    5. Provides for technical assistance, financing instruments, and money for test projects
    6. Aims to improve and modernize infrastructure
    7. Sets a mandate to have ethanol mixed into gasoline in the country’s three largest cities by 2012
      1. Production goal is 810 million liters by 2012
      2. No particular crop has been selected
    8. Generates market certainty by establishing international cooperation agreements, incorporating biofuels into the commercial mix, monitoring quality, and generating transparent pricing mechanisms