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Global Perspective on Production of Biotechnology-based

Bioenergy and Major Trends

Simonetta Zarrilli

United Nations Conference on

Trade and Development - UNCTAD

Rome, 12 October 2007

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Why Bioenergy?

Economic growth and increasing population willlead to 1.6% p.a. increase in global energy demandbetween 2006 and 2030 (IEA, 2006)

Increasing fossil fuels cost, energy security

concerns and climate change preoccupations havemotivated countries to explore alternative energysources, including bioenergy ± energy producedthrough the processing of biomass (any derivedorganic matter available on a renewable basis): e.g.

biogas, bioethanol, biodiesel Concerns about high fossil fuels prices and energy

security and efforts towards climate change mitigationare expected to feature highly in the internationalagenda in the years to come. This will keep interest for

bioenergy high

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Bioenergy perspective by 2050

Bioenergy may satisfy 1/3 of the world¶sfuture energy needs key alternative to

fossil fuels Represents 1-3 trillion US$ market value

worldwide

Involves some 10% of the world landsurface (Copernicus Institute for Sustainable Development and Innovation Management)

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Biofuel Classification

First Generation (from sugars, grains, or seeds) Biodiesel

 ±  rapeseed, soybeans, sunflowers, jatropha, coconut, palm, recycled cookingoil

Ethanol ±  From grains or seeds: corn, wheat, potato

 ±  From sugar crops: sugar beets, sugarcane

Second Generation (from lignocellulose: crop residues, grasses,woody crops)

Biological fuels

 ± Ethanol via enzymatic hydrolysis

Thermochemical fuels (most made via ³gasification´) ±  Fischer-Tropsch liquids (FTL)

 ±  Methanol, MTBE, gasoline

 ±  Dimethyl ether (DME)

 ± 

Mixed alcohols ±  Green diesel

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First Generation Biofuels

Use of sugar or starch crops creates limitations: ±  Competition for food uses

 ±  Plants optimized for food, not energy

 ±  Only part of the plant is converted to biofuel

 ±  Co-product sales often important for acceptable

economics Only modest energy and GHG benefits, except

with sugarcane ethanol (due to greater utilizationof the above-ground biomass)

Can blend with existing petroleum-derived motorfuels ± minimal infrastructure change

Large-scale experience in Brazil and USA

Relatively high costs (except sugarcane ethanol inBrazil) due to high feedstock cost

Cost penalties less severe at smaller scales

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Second Generation Biofuels Made from lignocellulosic materials

 ±  Biomass that is generally not edible

 ±  Larger fraction of the plant is converted to fuel

 ±  Plants can be bred for energy characteristics (high yield, low

inputs)

Two generic processing routes: biological or thermochemical

Can blend with petroleum fuels in most cases

Substantial energy/environment benefits compared with

most 1st

generation biofuels due primarily to greater biomassusability per unit land area

Greater capital-intensity than 1st generation biofuels, but

lower feedstock costs higher cost-scale sensitivity

larger scale facilities needed for optimum economics

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The role of biotechnology

Biotechnology is not a source of energy, but a scientific

method that provides tools to produce energy

Biotechnology permits the

modification/selection of plants to enhance their

conversion to fuels

Biotechnology can be used

for yield increase, better

biomass quality, diseaseresistance

Biotechnology can be used to

facilitate the manufacturing

process (from biomass to

biofuels)

Concerns related to

environment/biodiversity

protection

More acceptable for

consumers

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The International Trade Dimension Biomass & biofuel trade has been limited in the past as

most of the production has been for domestic

consumption

Several countries will not be in a position to produce

enough biofuels to satisfy their demand; somecountries/regions are endowed with conditions which

allow them to produce biofuels and feedstock 

competitively

production& international trade are expected to

escalate rapidly to satisfy increasing worldwide

demand

concerns about the sustainability of 

biofuels development

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Flows of ethanol in 2000 (thousand tons)

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Total trade of ethanol: 3 billion liters (2004)

Total production of ethanol: 51 billion liters (2006)

Flows of ethanol in 2004 (thousand tons)

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Biofuels Certification Initiatives National governments and regional groupings: Belgium, the

Netherlands, UK, Brazil, Canada, Germany, US-California,

European Commission

Companies: e.g. Electrabel, Essent

NGOs: e.g.WWF

International Bodies and Initiatives

International Networks and Roundtables: e.g. RSPO, RSP-

EPFL

What for?Ensuring that biofuels/biomass production contribute to climate

change mitigation, improved energy security and rural development,

without having detrimental side-effects on food security, land use,

environmental protection, labour conditions, etc.

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Specific concerns related to biotechnology

Several certification systems do not allow the use of GMOs. These

are for example FSC for forest and all certification systems for

ecological agriculture

EurepGAP certification program: (i) Planting of any GMO must

comply with all existing regulations in the countries of productionand consumption (ii) The use of GMO cultivars must be agreed

with individual customers prior to planting; (iii) Suppliers must

inform all customers of any developments relating to the use of 

products derived from genetic modification before engagement

Cramer report: no indicator has been included for GMOs. The

views with regard to GMOs are divided and the discussion about

this lies beyond the field of activity of the project group

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Why is certification important?

Market access and market acceptability

Only certified biofuels may count

towards biofuel blending targets

Only certified biofuels may benefit from

tax breaks and other incentives

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WTO Implications

The ³Like products´ issue

³Less favourable treatment´ ( E C-Biotech case)

The role of non-WTO law (Cartagena

Protocol)

« Grey area » WTO coverage of certain

labelling programmes

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Development Implications

Bionergy is a development opportunity for

developing countries, especially if appropriate

policies are put in place; ³second´ generationtechnologies may alleviate some of the present

shortcomings

Access and adaptation to technology

Developing country involvement in

sustainability certification for biofuels/biomass

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THANK YOU

Simonetta.Zarrilli@unctad.org

www.unctad.org/biofuels