Biofuel: the future? Who’s in, how soon, how much?

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This week I am in Amsterdam to moderate the 9th World Bio Markets conference.

It is a story that first came on my radar about ten years ago. I was a roving reporter for Sky News and the scandal of the day was that petrol was about to cost motorists 100 pence per litre. I know, wouldn’t we love to fill up out tanks for that price now! I was at the petrol station last week and I thought I was getting a deal at 129 pence per litre! Here in the Netherlands, last time I checked it costs about 1.7euros per litre. Back to the days of £1 per litre. Oil prices were going up and it had filtered down to consumers. My news editor had had enough of analysts talking about it and motorists moaning about it, so I was sent off to find out about the future. An alternative fuel. Biofuels. 

I ended up in a converted barn in the middle of nowhere. What we discovered inside was like something out of Mr Willy Wonka’s factory: giant vats, funnels and tubes and one man wearing a rubber apron running the whole thing. He had used his life savings and was expensively producing a small amount of biofuel to run the tractors in a nearby farm. The pictures were great, but the concept then was a hard sell. It was a stretch to start thinking about biofuels being produced on a profitable, commercial scale.

How times change. Now we have governments seriously thinking about biofuels for economic development, car and airplane manufacturers remodelling their engines to run efficiently and cleanly on biofuels, big business like Exxonmobil, BP, Dupont making big investments, small, ambitious younger innovators emerging and of course, a web of regulations to go with it.

Those regulations were on the agenda at WBM 2014.

It is an exciting time for the bio energy industry with a feeling from some delegates that 2014 is the year the bio markets will really begin to scale up: with more plants, bio-refineries and strategic partnerships being announced each week. There is even talk of a “post petroleum society”, urging thought leaders, policy makers and consumers to think about energy markets differently.

“In 50 years we will be living in a bio based economy” said Marcel Wubbolts, Chairman of the Board at the Biobased Industries Consortium and Chief Technology Office at dutch chemicals firm DSM.

Yet while US and some developing markets are putting regulations in place, offering incentives for business as well as making the climate change case, the feeling from the morning session here was that Europe is playing catchup.

Money has been thrown at the industry – E30billion invested in research according to Jacques Verraes from the European Commission. Even he said that was a staggering amount. Lots of knowledge is being generated. The sticking point is implementation and getting European governments to jointly set out what the plan is, how they are going to get there and by when. The question is, whether European lawmakers are serious about bioenergy.

Rob Vierhout, the President of ePure which represents the European renewable ethanol industry at the EU level, was very doom and gloom.  He fears that governments are losing interest and have become so distracted that if they’re not careful there might not be a bio industry to talk about beyond 2020 – let alone those 50 years down the line.

They are distracted by shale gas, fracking and seem to have sidelined that whole climate change argument for pushing biofuels in the first place. Cheap energy is the mantra now. And bioenergy, historically, doesn’t come cheap.

So keep an eye on events in the Crimea. The Ukraine crisis has shocked world markets amid fears Russia’s energy resources will be hit by trade sanctions. Gas and oil prices have soared and petrol could be next. This unfortunate conflict could end up unwittingly influencing the future of the bio economy.