Biofuel is growing in popularity worldwide as governments and private companies look for alternative fuels to power their transport, shipping, and aviation sectors. Several new developments have been announced that will grow the production capacity of several countries and will likely drive down prices, as higher investments lead to mass production and greater technological innovation. Canada, the U.S., and the EU all hope to become biofuel powerhouses, as they promote policies and encourage funding to support sectoral growth.
In December, the Alberta province government announced the approval of a $1.2-billion negative-emissions biofuels facility in southeast Calgary. The facility is expected to open by 2026, tripling the amount of renewable natural gas (RNG) being supplied to Canada’s grid. Future Energy Park will convert non-food grade waste into RNG, which it will transport through the natural gas mainline. The facility will also produce ethanol and methane-reducing cattle feed. Green Impact Partners have been trying to get the privately funded project off the ground for two years and have finally been given the go-ahead from Alberta’s Ministry of Environment and Protected Areas. Jesse Douglas, CEO of Green Impact Partners, stated, “It’s ready to get built and certainly has a massive impact on the local economy and the local supply chain.”
Future Energy Park will span 21 hectares and is expected to create 800 jobs during the two-year construction phase, as well as 100 permanent jobs for operations. It could provide the city with revenues of as much as $50 million a year, as well as $150 million annual earnings for wheat producers. The plant will be very low in emissions, sequestering any methane and carbon dioxide released by using carbon capture and storage (CCS) technology, to be processed into natural gas or used as fuel. This is expected to make the plant “North America’s largest carbon-negative biofuels facility”.
While this is a huge step forward, it will still contribute less than one percent of the country’s gas production, which is still highly reliant on fossil fuels. This is largely owing to the high costs involved in the construction and running of a biofuels plant. While the production of natural gas costs around $2.20 to $3 per Metric Million British thermal units (MMBtu), it currently costs around $22 per MMBtu for RNG. However, greater investment in the mass production of the fuel could help drive down prices, as new, more efficient technologies are developed.
In the U.S., the Biden administration announced a major funding initiative for homegrown biofuels earlier this year, as part of its Investing in America Agenda. Tom Vilsack, the Secretary of the U.S. Department of Agriculture (USDA), announced that $500 million from the Inflation Reduction Act would be invested in boosting the capacity of domestic biofuels. Vilsack stated, “President Biden’s Inflation Reduction Act is a historic investment that will expand clean energy, lower costs for Americans, and build an economy that benefits working families and small businesses.” He added, “By expanding the availability of homegrown biofuels, we are strengthening our energy independence, creating new market opportunities and revenue streams for American producers, and bringing good-paying jobs and other economic benefits to rural and farm communities.” This follows the $50 million from the IRA that was awarded for the development of 59 infrastructure projects in 2022 as part of the Higher Blends Infrastructure Incentive Program (HBIIP).
In addition to state investments in the U.S., several private companies are rapidly growing their biofuel capacity thanks to support from favorable climate policies. New York-based SGP BioEnergy received $250 million in funding from Global Emerging Markets (GEM) for the construction of the Golden City Biorefinery in Colon, Panama. Once operational, the plant is expected to produce up to 180,000 bpd of renewable fuel, as well as produce as much as 405,000 metric tonnes of green hydrogen annually. It is expected to be one of the largest facilities of this type in the world when complete, leading the way for other projects to follow.
Meanwhile, in Europe, while the biofuel industry is growing, there is widespread criticism around the EU’s approach to the clean fuel. While the recently revised Renewable Energy Directive is highly supportive of biofuels, such as renewable ethanol, other EU legislation largely overlooks the strategic importance of such fuels. Critics suggest that the EU needs a shift in mindset when it comes to biofuels, to encourage the investment required to develop large-scale commercial facilities. David Carpintero, the director general of ePURE, emphasizes the importance of the diversification of Europe’s green energy sector. He states, “Europe needs more than just one solution to achieve real transport de-fossilisation.”
Nevertheless, a recent Commission report on bioenergy sustainability suggests that bioenergy produced from agricultural, forestry, and organic waste feedstock contributed around 59 percent of Europe’s renewable energy consumption in 2021. Most member states reported measures related to the promotion of biogas and biomethane in line with the Commission’s REPowerEU plan, which aims to accelerate the production of sustainably-produced biomethane to reduce the region’s reliance on fossil fuels.
By Felicity Bradstock for Oilprice.com
ADVERTISEMENT
More Top Reads From Oilprice.com:
- Biden Tells Federal Employees to Use EVs and Trains on Official Travel
- Global Coal Demand Is Set to Hit a Record High in 2023
- Exxon Reportedly To Mirror Peers with Cash Bonuses for Risk Traders
