Biofuels are considered as substitutes to traditional fossil fuels as they are renewable, come with less damaging environmental externalities, are economically viable, and are associated with strong income transfer effects. Biofuels are now set to become the most acceptable substitute due to the environmental advantages and economic benefit. A question that remains, however, is whether biofuels could be produced substantially enough to save on the use of traditional fossil fuels, and whether this would have a bearing on the trade sector. It is known that most developed and developing countries spend a huge amount of foreign exchange on oil imports. Therefore, these countries would like to introduce the use of biofuels by cutting their cost of production through various subsidies. The effect of these measures would impact aggregate trade, and so traderelated issues would come into play. It is now a well-accepted fact that biofuels have lower environmental externalities and are acceptable on well-acknowledged environmental standards.What is a biofuel?
A Biofuel is any fuel that is derived from biomass — meaning recently living organisms or their metabolic byproducts, such as manure from cows. It is an ester-based fuel oxygenate derived from renewable bio-resources such as Pongemia Pennata, Jatropha curcas, soyabean, mustard, rapeseed, peanuts, other vegetable oils, and animal waste like beef tallow (Francis George et al. 2005). It can be used in pure form, but is not advisable due to the problem of Polymerisation (vegetable oils containing triglycerides that end up as an oil gumminess resulting in the formation of long saturated carbon chains) and therefore, is largely blended with petroleum diesel (petrodiesel) for use in compressionignition (diesel) engines.
One definition of a biofuelsay that it is any fuel with an 80% minimum content by volume of materials de- BIOFUEL Fuel of the Future By Haridas V.R., PhD Caritas India and APHD rived from living organisms harvested within the ten years preceding its manufacture. Like coal and petroleum, biomass is a form of stored solar energy. The energy of the sun is “captured” through the process of photosynthesis in growing plants. One advantage of biofuels in comparison to most other fuel types is that they are biodegradable, and thus relatively harmless to the environment if spilled.
What is Biodiesel?
Biodiesel is one of the main components of biofuels. It was introduced in a few countries during the World War II period, to power vehicles. Recently, interest has been renewed and presently it is partially replacing traditional fuels.
Biodiesel is made from animal fats and vegatable oils. Scientifically speaking, biodiesel is fatty acid alkyl esters. Since biodiesel burns cleaner than petroleum diesel, and can be used in compression-ignition engines just like diesel, biodiesel is being viewed by some as a replacement. The greatest benefit is seen when used in its purest form, 100% biodiesel. Biodiesel can be mixed with regular petroleum diesel, and is usually referred to as blends, 20% biodiesel or less, the rest normal diesel fuel.
Modifications to most diesel engines are not needed when using the 20%-or-less blends. If the engine was built after 1994, few if any changes would be needed to run on 100% biodiesel. So there is a great deal of excitement and optimism surrounding biodiesel as real replacement to petroleum diesel. Since biodiesel is cleaner burning, emissions are greatly reduced. To put this in perspective, biodiesel reduces carbon monoxide emissions by half. Also, biodiesel is non-toxic and is also biodegradable.
The environmental impact of biodiesel:
Not only is the manufacturing process of bio-diesel environmentally friendly, but bio-diesel itself does not contribute to the accumulation of carbon dioxide in the atmosphere and therefore does not contribute to “greenhouse gases.” Greenhouse gases are gaseous components of the atmosphere that contribute to the greenhouse effect. Although uncertainty exists about exactly how the earth’s climate responds to these gases, global temperatures are rising. Some greenhouse gases occur naturally in the atmosphere, while others result from human activities. Naturally occurring greenhouse gases include water vapor, carbon dioxide, methane, nitrous oxide, and ozone. Certain human activities, however, add to the levels of most of these naturally occurring gases.
Bio-diesel also provides at least three times as much energy as the total energy inputs required to grow the crops and to produce the fuel. Mineral diesel provides only about 0.8 times the energy. The fact that bio-diesel is a way to utilize solar energy that is captured through photosynthesis in the plant oil and the fact that it is renewable, leads to this conclusion.
Biofuels and Emerging Markets:
Among the well-established biofuels, ethanol is produced mainly from sugarcane or molasses, generally a bi-product of the sugar industry, and thus is a renewable resource. It can also be produced from starch, potatoes and even wood. Similarly, oil is usable as biofuels and could be extracted from other oilseeds but as the demand for edible oil outpaces its supply, it is economically not viable to use edible oil for production of bio-diesel. Alternatively, there are a few tree species, which produce seeds rich in fuel oil. Of these, some promising tree species are Jatropha curcas, Simerouba Glauca and Pongamia pinnata. These are largely grown on cultivable wastelands, on degraded forest areas and could also be grown on the sides of railway tracks, roads and bunds of irrigation canals. Jatropha curcas are usually grown on the field boundaries as bio-fencing. Growing of Jatropha on the boundaries prevents pest attack in the field too.
Among various combinations of blended biodiesel, the most common combination is B-15 (15 per cent biodiesel with 85 per cent petro-diesel). B-15 has been designated as an alternative fuel. But as the biodiesel industry is still in the infancy stage and is only creeping into full-fledged manufacturing processes, there are various compositions being used in actual practice. Several industries and commercial establishments such as hotels, hospitals and restaurants are already using some forms of the alternative fuel and as such are potential customers for such fuels.
Biofuels and the WTO
The founder of CNN,Ted Turner, in September 2006 called on the global trading community to embrace the use of biofuels to break the WTO Doha Round Deadlock. In a speech to a WTO Symposium in September 2006, Turner said that member states should take up the idea for re-launching the Doha Round negotiations and boost production of biofuels, renewable sources of energy which can be made from agricultural produce including grains or crop waste. He said that biofuels - liquid fuels made from plants and trees, including biodiesel for trucks and generators and ethanol for cars and cooking - could do more than fight problems like pollution and global warming. According to Mr. Turner, “By investing in biofuels, developing countries could produce their own domestic transportation fuels, cut their energy costs, improve public health, create new jobs in the rural economy, and ultimately, build export markets.”
Turner talked of the promising opportunities in corn, sugar beets and sugar cane that can be converted into ethanol, and palm, soy and rapeseed oil that can be made into biodiesel. These sources, he said, would provide poor countries with local jobs by substituting the fuels for oil imports.