BIODIESEL - FUEL FOR SUSTAINABLE TRANSPORT

The need for a British Biodiesel Industry

Prepared for the British Association for Bio Fuels and Oils (BABFO) by T L de Winne June 1999

CONTACT - terry@biofuels.fsnet.co.uk

(For the case put to HMG for a reduction in taxation, see www.biofuels.fsnet.co.uk/biocase.htm

For developments in the situation since this date see www.biofuels.fsnet.co.uk/bio2.htm)

SUSTAINABLE TRANSPORT

The oil is running out

This appears to be an obvious statement, and yet it is overlooked by most in the proliferation of reports which have emanated from government or quasi-government sources, some of which appear to be following their own hidden agenda. In fact, this simple statement embodies the whole crux of the matter - all other discussion is academic. The essential questions are -

With what are we going to replace it?

And how soon?

The first question involves a certain amount of investigation, which has already been done by numerous reputable establishments throughout the world. In this paper, we will be presenting the case for what is considered to be the only fuel currently (1999) suitable for the transport vehicles which have become so much a part of out lives and on which our standard of living depends - biodiesel. Objective comparisons will be drawn with other technologies and other fuels, but the end result will show the logic of the necessity for a sustainable biodiesel industry to be set up in the United Kingdom to avoid being left - literally - standing.

The second is a question of moral obligation - do we use up all of the finite amounts of oil left on this planet, or do we slow down consumption so as to leave some for our children and our children's children? Time is of the essence. One further significance is the need to reduce the amount of excess carbon dioxide released into the atmosphere by the consumption of fossil fuels.

Each tonne of biodiesel used saves three tonnes of carbon dioxide emissions.

John Battle MP, Minister for Energy and Industry, in his foreword to the consultation paper New and Renewable Energy; Prospects for the 21st Century, quotes (somewhat ironically, in view of the reason for withdrawal of aid by the Foreign Office) a Kenyan proverb -

"The earth was not given to us by our parents, it was loaned to us by our children."

Unfortunately, the paper then goes on to mis-use the word "sustainable" , taking a view of only the next 25 years. We prefer the definition "for ever and ever". Amen.

ENERGY FOR TRANSPORT

The availability of road transport for the infinite future depends on a number of factors -

1. The natural and beneficial regeneration of the source of energy - the fuel.

2. The cost-effectiveness of producing the fuel, taking into account the energy cost of production and the mechanical efficiency with which it can be used.

3. The ease and safety with which the fuel may be stored, conveyed and used.

4. Any improvement to the environment which can be achieved and maintained.

5. Public acceptability.

There are only two forms of fuel which are realistically and currently available to drive transport - electricity and liquid fuels.

Gaseous fuels - mainly hydrogen and methane - are not reviewed due to the low energy density of the medium, which leads to problems of handling and storage - important issues when considering portability within the confines of a mobile and independent vehicle. Solid fuels - coal or wood - are not readily converted to energy without a cumbersome intermediary (steam), which requires an excessive amount of time to develop.

Transport may be broken down into a number of sectors and sub-sectors. Briefly, they may be reviewed as follows -

1. Public transport The most economical form of personal transportation and that most easily regulated.

1a. Railway trains or trams Running along fixed, tracked routes, either dedicated or on roadways and the most efficient of all forms of transport. Two fuel groups (not counting the superseded but sustainable wood- and coal-burners) - i) Diesel electric trains Using liquid fuel and a generator to provide electric motive power. Mechanical losses through the power train are inevitable, but the significant set-back to this form of transport is that the noxious exhaust gases are emitted at the front of the train, adversely affecting the passengers by being transmitted to the carriages via the slip-stream. ii) Electric trains and trams Electricity is conveyed to the drive motors via overhead lines or sleeper rails. The cleanest form of transport, causing no air pollution at the point of use. However, steel tracks and wheels cause noise pollution, which is unacceptable in dormitory areas. (N.B. It may be as well, at this juncture, to dispense with the old chestnut that the generation of electricity causes pollution at the power station. Agreed, but power stations are strictly regulated and able to clean their emissions to a far greater degree than is possible with fuels burnt in vehicles. With the introduction of more feed from windfarms and hydro-generating plants, pollution will be progressively reduced.)

1b) Electric trolleybuses Travelling on public roads on semi-fixed routes using electricity from overhead lines. (They are also fitted with a limited storage capacity to enable them to cover short distances off-line.) Clean, the quietest form of public transport and considerably improved in terms of efficiency over the past twenty years. Trolleybus infra-structures are also the least expensive (by a factor of ten) and disruptive to retro-fit in an urban area.

1c) Diesel buses Although extremely fuel-efficient and more flexible in routing, noxious and carcinogenic emissions - mainly at ground level - pollute the very air we breathe.

1d) Taxi services The most convenient and flexible of all public transport systems and efficient in terms of capital employed. However, labour-intensive operation makes them expensive for the user, save for convenience on short journeys . In the main, diesel powered vehicles are used on the grounds of lower operational costs, but the Department of the Environment has found that 9% of diesel taxis tested failed emission tests.

2. Commercial goods vehicles Heavily used to support a consumer-based society. Mainly run on diesel fuel. Mainly filthy.

3. Private transport Without social comment, private vehicles are here to stay. Battery-powered electric cars having proved both uneconomic and unacceptable by the public for the time being (though there is much hope for the future), this leaves liquid fuels.

Conclusions

Electricity may be generated from a number of sustainable fuels and sources, but has only a limited use in transport for the foreseeable future. A replacement is therefore urgently required for liquid fossil fuels to ensure the continued availability of transport, both public and private.

THE STORAGE OF ENERGY

As has been indicated, a significant factor in the use of transport fuels is the portability of the fuel or power source - can it be carried in sufficient quantities to retain the viability of the vehicle as a people or goods carrier? This involves the question of energy storage density. For example, petrol holds around 9 kilowatt hours (kWh) of energy in a litre of fuel. (NB - Due to the fact that there are variations in energy density caused by additives, etc, only approximate figures will be used in this paper.) A small car will travel, say, 42 miles per gallon of petrol, or 9.2 miles per litre - i.e., roughly 1 kWh per mile.

Petrodiesel fuel holds 8.6 kWh per litre, but the same car can do 52 miles per gallon due to the higher mechanical efficiency of the diesel engine. This amounts to 0.75 kWh per mile - a considerable improvement, and recent developments indicate that the diesel engine is capable of improvement on this figure. (For example, the Volkswagen Lupo diesel version, which claims 94 mpg.).

This difference becomes even more marked when battery-powered vehicles are considered. Due to the high efficiency of electric motors (95%), the "fuel" carried is able to do more work and (taking the manufacturer's figures for the Chevrolet S-10 Electric Pick-up for comparison) a charge of 16.2 kWh will travel 47 miles, or 0.35 kWh per mile.

The disadvantage, however, comes in the energy storage density - the weight of the lead acid battery required to carry the energy to travel this 47 miles is 635 kg - an energy density of only 25 watts per kg, as opposed to 10.75 kWh of energy per kg of petrodiesel fuel - over 400 times as much. In fairness, there are batteries which hold considerably more energy - the ZEBRA nickel/ sodium chloride battery will hold six times the energy that a lead acid battery will but, due to the fact that it has to be surrounded by a stainless steel vacuum flask, it costs almost 12 times as much to manufacture. Other alternatives are lithium ion and lithium polymer batteries, but recycling problems abound (as does the problem of where all the lithium is to come from for widespread use). Less problematic is the nickel metal hydride battery - better energy capacity but very expensive. Despite the requirement for long recharging periods - shortening as charger technology advances - there is a positive niche future for the battery-powered electric car, as there is for fuel cell operated vehicles.

Whichever fuel is used in a fuel cell to produce the electricity, the cost of the mechanics of the energy process at present outweighs the advantages of efficiency and environmental cleanliness. Both gas and liquid fuels are used, directly converting the fuel into electrical energy. They are highly efficient - the Daimler Benz Necar III, based on the Mercedes-Benz A-class car, claims to travel 400 km on 40 litres of methanol. This is 0.2 kWh per mile from a potential bio-fuel (but not at the moment, as methanol is made fromfossil oil), which bodes well for the future if the costs can be reduced to a level acceptable to the average motorist and the safety and cumulative poison effects of the volatile methanol can be overcome. One attraction is that the methanol, being a liquid fuel, has not the same problems of storage and dispensing as gaseous fuels. The main drawback is that the fuel reformation system requires about 10 minutes to warm up, from a cold start, and therefore requires a number of storage batteries in addition to the fuel cell.

Gaseous fuels, by their very nature, suffer from the inherent lack of density. They may be compressed (introducing weight problems of the container), or hydrogen - the perfect fuel, producing mainly water as a by-product - may be absorbed in a metal hydride filled "tank", kept under compression at 2000psi or in liquid form at minus 253 degrees C. This problem relegates the fuel to larger vehicles, more able to accommodate the massive storage facility. Hydrogen refuelling is a serious problem - safety is a primary consideration due to flammability. Hydride storage is slow - 15 minutes for a "fill" - and requires 3 connections - one for the gas and two for the cooling water in and out. The process is exothermic.

It is therefore evident that, in order to achieve a satisfactory level of "alternative" energy that can be conveniently carried by a vehicle, it may be necessary to install heavy, bulky or expensive ancillary equipment to store or process the fuel.

Biodiesel has an energy content slightly below that of mineral or petrodiesel - about 90% - and uses existing diesel engines. There are no inherent cost or weight penalties involved in its use. It would therefore appear to be one of the ideal fuels for future transportation.

BIODIESEL OIL

Biodiesel oil may be made from virtually any oliferous vegetation, including the seeds from rape, soybean, sunflower, peanut, cotton, castor and palm, or even animal fats. It may also be made from waste vegetable oils and fats from fish and chip or fried chicken establishments. The manufacturing process is totally benign, having no detrimental effect on the environment. It is therefore a truly sustainable fuel.

Biodiesel is a clear liquid, without unpleasant odour or handling characteristics, of virtually the same viscosity as mineral fossil diesel oil. For this reason, it may be used in a standard diesel engine, the only possible modifications required being a two to three degree retardation of injection timing and the replacement of any natural rubber seals with synthetic material.

Rape has proved to be a successful crop in the UK, production only being curtailed by EEC dictat due to the excess amount of cattle feed being produced as a by-product. This problem may easily be overcome. During growth, the crop absorbs carbon dioxide which is released when the biodiesel is used. It is therefore classified as carbon neutral - that is, it does not increase the amount of carbon dioxide in the atmosphere when used.

The crop comprises three essential parts - the leaves, which may be utilised as green manure or forage - the straw, which may be burnt on the farm to provide heat or electricity - and the seed. The average UK yield from winter oilseed rape is around 3 tons of seed per hectare during a 270 day growing season (August to June). The seed is pressed to extract the oil content of about 30% by weight, the remaining cake being used either as high protein content cattle fodder or burnt as an energy source for the production of electricity (advantageously, attracting NFFO support).

Processing the oil with methanol - though ethanol is preferable as it is able to be produced organically by fermentation and distillation - produces rape methyl ester (RME) (or rape ethyl ester - REE) and glycerol, which may be further processed to recover crude lecithin, glycerin (soap feedstock), tocopherols (vitamin E) and other by-products. Yield is around 1100 litres of fuel per hectare in the UK. There is little or no waste product.

The energy cost of producing the crop is about 15% of the yield - the same as fossil oil. The main difference is that most of this energy is able to come from the eco-friendly crop itself.

POLLUTANTS

Carbon dioxide (CO2) Every tonne of fossil fuel that is burnt adds some three tonnes of CO2 to the atmosphere, together with a further half tonne generated during manufacture. (Total - 3.63 tonnes, vide the Austrian Biofuels Institute, Feb. 1998). Biodiesel emits less CO2 than the crop has absorbed during growth - the balance being locked up in solid by-products.

The British Government is committed to "reducing emissions of carbon dioxide by 20% by 2010". (John Battle MP, Minister for Energy and Industry.) However, transport fuels are marginalised in his considerations, (Consultation paper New and Renewable Energy - Prospects for the 21st Century) despite the fact that they contribute 19% of total annual CO2 emissions.

This reduction amounts to some 36 million tonnes, the transport sector's 7m tonnes of which could be saved by a mere 3 million tonnes of biodiesel - within the capacity of UK land resources.

The prime environmental benefit of substituting fossil fuels with energy crops is therefore self-evident, and discussion of CO2 emissions at the point-of-use is purely academic.

Sulphur oxides (SOx) Every tonne of fossil fuel that is burnt adds 180 kg of sulphur oxides to the atmosphere, causing irritation to the respiratory system and adding to the formation of acid rain. Biodiesel contains no sulphur, other than any which may be absorbed from the (polluted) atmosphere or from field dressings applied during growth.

Nitrogen oxides (NOx) Every tonne of fossil fuel that is burnt adds 100 kg of nitrogen oxides to the atmosphere, causing irritation to the eyes and respiratory tract. as well as forming acid rain. Road traffic contributes 51% of all nitrogen oxide pollution caused. It is therefore highly desirable not to increase this level. Conflicting test results on biodiesel have been reached, the worst scenario being presented by ETSU (Energy Technology Support Unit). It is not made clear from the ETSU report whether the simple measure of retarding the injection timing by 2 to 3 degrees was carried out in order to achieve efficient combustion. Until this is known, the results must be suspect. According to all other reports, NOx reductions of 5 to 10% can be achieved.

Carbon Monoxide (CO) Every tonne of fossil fuel that is burnt adds 500 kg of carbon monoxide to the atmosphere, which restricts the ability of the blood to absorb oxygen. It is therefore a poisonous gas, 90% of which is produced by transport fuels. The advantage of biodiesel is that it contains additional (11%) oxygen molecules which improve the burning efficiency of the fuel. This inhibits the production of monoxides, resulting in a 10 to 20% reduction in emissions. Again, it must be commented that ETSU results are less favourable towards biodiesel.

Particulate matter (PM) Every tonne of fossil fuel that is burnt adds 85 kg of solid particles to the atmosphere in the form of solid carbon soot, around which form the carcinogenic polyaromatic hydrocarbons which are conveyed to the lung tissue by the air we breathe. All studies (with the exception of the AEA/ETSU report - see above) carried out into the emission of PM show that biodiesel emits between 25 and 80% less than fossil diesel. (Visual evidence is available just by watching a vehicle powered by biodiesel - it emits little or no black smoke after acceleration!). Studies currently being undertaken in the USA indicate a possible reduction of 94% in toxic risk assessment.

BIO-DEGRADABILITY

Fossil oil is, in itself, a pollutant. From oil slicks caused by the illegal washing out of tanks at sea to the massive destruction of wildlife and tourist facilities after a marine disaster, the effects have been catastrophic. As a recent Castrol report shows, oil degrades only 50% in the first 21 days after a spill - biodiesel is 98% harmlessly broken down in the same period.

(In global terms, it is considered that the adoption of biodiesel as one of the primary sources of transport energy will reduce the need for trans-continental shipping considerably. Economically, it is more viable for the fuel to be produced near to the source of the raw material, with a number of small esterification plants being located in rural areas, rather than centralised processing. This is a  two-way environmental benefit.)

SUMMARY

It must be reiterated that fossil oil is fast running out. It is therefore necessary to find and support viable replacements that will, if possible, reduce pollution levels and be truly sustainable.

We make the case that biodiesel is one of these fuels, being beneficial in terms of zero carbon dioxide emission, zero sulphur oxide production and a measurable reduction of other transport pollutants.

Especially, it must be stressed, the reduction in carcinogenic particulates by road vehicles running adjacent to pedestrian footpaths and in congested inner cities.

We have made the point that results obtained by ETSU have been submitted to the Department of Trade and Industry, upon which certain strategic decisions have been based. It is essential that the DTI now examine and compare the vast amount of material produced by other research establishments, both in Europe and the USA, which present biodiesel in a more realistic light by adopting correct evaluation techniques designed to produce comprehensive and accurate results.

THE SOCIO-ECONOMIC EFECTS OF BIODIESEL

The case we have made so far is based on the need for substitute transport fuels, biodiesel being eminently suitable in terms of ecological impact, sustainability and usability. However, there are considerable advantages to be gained by the indigenous production of a sustainable energy source - the equivalent of inexhaustible North Sea oil!

When the North Sea oil does run out, there are considerable socio-economic factors to be considered - loss of jobs, adverse balance of payments caused by the importation of fuels, loss of revenue to HM Treasury in oil royalty receipts and so on. It is in the best interests of the UK economy that these factors be considered in the short term and urgent action be taken to encourage the production of indigenous resources.

According to the 1998 European Petroleum Yearbook, Britain has eight years supply of natural gas remaining and less than five years safe reserves of petroleum oil. Why, then, is the British Government, advised by Civil Servants, failing to take the necessary steps to avoid the massive importation of oil and the consequential fall in the standard of living? This matter affects all of us.

Studies in Ireland and France indicate that between 11 and 15 jobs per 1,000 tonnes of biodiesel would be created. Given that most of the processes involved would be carried out in rural areas, this provides a much-needed boost to the agricultural economy with, in the main, new jobs being created. Perhaps it would be more apt to use the word "resurrected", due to the fall-off experienced in the past 50 years. In turn, this will lead to the regeneration of many run-down farming communities and less need for personal transportation due to the availability of more local employment. Again - an economy in the use of transport fuels.

The remainder of jobs needed to be filled will mainly be by displacement, as oil refineries and other processing plant are run down. Distribution jobs will remain static, due to the similarity of the fuels - the same facilities could be used by both fossil and biodiesel, possibly utilising storage tanks and pumps previously used by petrodiesel. Job creation, therefore, amounts to a minimum of one job per 100 hectares of land under cultivation, producing 100 tonnes of biodiesel per annum.

ENERGY BALANCE

It takes energy to grow the crop and to process the RME/REE to produce biodiesel transport fuel. This amounts to about 15% of the energy produced from the crop - all or most of which can be gained from the crop itself - rape straw for drying and electricity; biodiesel fuel for transportation. Economically, pressing and esterification - themselves non-polluting processes - should be carried out close to the crop growing area. This reduces transportation energy. The biodiesel fuel may then be transported to local distribution centres, leaving the by-products to be taken to centralised refining plants, where economy of scale is necessary.

As a side issue, the use of the dried vegetation and straw of the crop, together with - if necessary to avoid EEC constraints - the crushed seed, still containing 5 to 10% oil, may also be burnt to produce electricity, thereby attracting a generous NFFO subsidy not available to the main product - biodiesel!

ECONOMIC BALANCE

The anomaly of this situation borders on the absurd - short rotation coppice (SRC) willow, harvested every three to five years, has a cropped energy content of 6 kWh per kg, but requires either 3kWh of heat to dry the material or vast storage/drying facilities. This is purchased under the NFFO-4 scheme at an average 5.51p/kWh.

Biodiesel has an energy content of 10.3 kWh/kg. If used to produce electricity, this would, presumably, attract a subsidy of 56.75p per kg, or 45.4p per litre. In its wisdom, HM Government has seen fit to tax biodiesel used as road transport fuel at the rate of 50.21p per litre - the same as for fossil diesel. Ultra low sulphur diesel, however, because it costs 3p a litre more to produce is favoured by a rate of 47.21p per litre.

The logic escapes us.

COST OF PRODUCTION

Estimates of production costs vary between reports due to the wide variation of cost and value of inputs and outputs. The most comprehensive report known is that of the University of Wales BEAM Project, carried out at the request of the Rural Development Section of the Welsh Development Agency about two years ago. Without detailing the report (a full copy of which may be found on http://www.bangor.ac.uk/~afs117/biod.htm ) it calculates the 1997ish cost of production at between 17 and 27p per litre, taking into account the value of the by-products and allowing the input from set-aside grants. (Year 2000 - £400/600 per hectare)

Other estimates have been produced, indicating costs of up to 63p per litre, but the bases for these calculations are not known. Cost in the USA is currently about 34p per litre. It would therefore be reasonable to assume a "worst case" cost of 40p per litre at the pump, allowing for storage and transport costs and profit margins to the distributor and supplier. Amortised in this cost is the capital value of the plant required, which is not comparatively high - an esterification plant to produce 5000 tonnes of RME per annum at a rural location is estimated at less than £0.5m. To this must be added the cost of a seed crusher to recover the oil - about £120,000.

In the USA, Southern States Power Company has just installed it's second 7m gallon plant!

In Germany, Oelmuhle Leer Connemann GbmH took advantage of DGXVII THERMIE 93, which paid 20% of the DM2.5m (£1m) cost of setting up the 8,000 tonnes per year European Industrial Demonstration Plant for the Production of Biodiesel. This was in 1993 and, today, there are 100,000 cars running on biodiesel in Germany, Sweden and the Netherlands. What were all the British Euro-MPs doing at this time?

COST COMPARISON

The response "Biodiesel is too expensive!" must be the viewed in terms of relativity - expensive compared with which alternative? To compare it with the cost of fossil diesel at today's price is both naive and unrealistic.

In 1956, the cost of oil was £10.90 per ton, equivalent to 25p/GJ. By 1975, this had risen to 152p/GJ - six times the price in the space of some 20 years. In 1972, fuel oil was 2.3p per litre. Following the "Oil Crisis", this had increased by November 1975 to 4.9p per litre - double the price in only three years. The price is currently 11p per litre - just over double the price, but in 25 years.

In this time, the retail price index has increased by a factor of four (401.8% to March, 1999), which means that fossil oil should be costing 20p per litre. It is only the greed of producers that is holding the price down. Who, in all honesty, is able to predict the price of oil in five years time, when the North Sea fields start to run out?

Already this year (1999), OPEC production cut-back has resulted in the price of crude oil increasing from $9 a barrel to $20 in nine months. (Year 2000 - $27 a barrel)

This is why it is very unwise to compare the cost of producing biodiesel today with the cost of oil in the future - especially when there will be none!

The UK cost of petrodiesel at the pump is currently 73.9p. This is made up of VAT (11p) and Fuel Tax (50.21p), leaving 12.7p to produce and market the fuel. (With the introduction of the ultra low sulphur diesel rate of fuel tax, these figures become 73.9p - VAT 11p - tax 47.21p - fuel 15.7p)

Assuming a biodiesel "worst case" cost of 40p per litre, this is an increase of 315% in base cost. However, bearing in mind the extortionate rate of taxes applied to transport fuel, it only raises the price at the pump to £1.06 - i.e., VAT (15.8p) plus Fuel Tax (50.21p) plus fuel (40p). This is an increase of "only" 43% and one which may happen, anyway, if oil producers cut back on production to 1975 levels in order to conserve supplies - purely on the grounds of economic survival.

Until this happens, in order to encourage the production of biodiesel, it will be necessary for HM Government to level the playing field by reducing the Fuel Tax applicable to biodiesel to a maximum of 22.9p per litre or less, if there is to be an incentive for private venture investment. This is an effective subsidy of 2.76p per kWh - comparable with existing NFFO subsidies paid to sustainable electricity suppliers.

What is holding the game up?

The case has been made for a reduction in Fuel Tax applicable to specifically biodiesel - other fuels such as ultra low sulphur diesel (47.21p) and compressed LNG and LPG gases (15p per kg) already being treated favourably. It should be noted that these are all fossil-derived fuels with a limited life expectancy.

Why, then, are sustainable transport fuels derived from energy crops being penalised?

As has been noted, the results obtained by AEA/ETSU in biodiesel trials have not concurred with results obtained at other establishments round the world. It is possible that this has been caused by a basic misunderstanding of the fuel and its requirements, but it has led to some disastrous conclusions being drawn. For example, the ETSU Field Trials conclusions set out at 7.2.3., page 3 paragraph 3 Volume 1 states - "biodiesel seems to offer little in direct emission benefits ..."

This is a totally dismissive conclusion, emanating from what is supposedly an authoritative source but conflicting with every other research document published. Who is out of step?

The AEA/ETSU work recently published as Alternative Road Transport Fuels, Life Cycle Study Volume 1 concludes that the cost of producing biodiesel in accordance with the Heavy Goods Carriage Authority (HGCA) - a range of 26p to 63p per litre - is "uncompetitive with fossil fuels", taking into account the full rate of duty applicable at that time.

This totally ignores the false economy of current fuel costs (see above), the instability of Oil Futures and the artificially high rate of Fuel Duty, let alone the essential question "What are we going to do when the oil runs out, Daddy?"

This unrealistic attitude of ETSU staff to the only economically viable sustainable transport fuel presently available is maintained in its latest document, the Supporting Analysis to New and Renewable Energy; Prospects in the UK for the 21st Century. Commissioned by the Department of Trade and Energy and paid for from public funds, the 258 page document is, in the main, a fair and well-researched picture of sustainable energy resources - but only insofar as the production of electricity is concerned. But transport fuels??

Unforgettable ETSU quotes -

A selection of quotes from the Supporting Analysis, on which decisions affecting all of us will be taken, together with our observations -

Renewable fuels could make significant contributions in transport markets if both the yield of useable energy per hectare and vehicle efficiency can be greatly improved. (p.9)

Oh? And if they can't, what are we going to use?

Renewable market penetration can be significantly enhanced by the liberalisation of energy markets, if technologies are supported to the point of market competitiveness (e.g. via a market enhancement process). (still p.9)

What we think this means is that renewables are more expensive than fossil fuels and will need subsidy to compete in the open market - totally ignoring the artificially low price of fossil fuels as at today. This is irresponsible.

Medium term (ie, should be commercial over the next 10 to 15 years): ...energy crops.. (p.10)

Firstly, we can't afford to wait 10 to 15 years; secondly, energy crops were invented and were commercial long before oil was exploited.

The majority of renewable energy trade associations are small and do not have the resources to address relevant sectoral (?) weaknesses (to exploit opportunities at home, or abroad). (p.23)

If not - why not? Unlike the major oil companies, who have sufficient clout to demand - and get - a 3p reduction in ultra low sulphur diesel fuel Fuel Tax in order to retain competitiveness with standard diesel. This is a truism, critical of government. Without the removal of the handbrake, the vehicle for the industry to develop remains at a standstill.

Renewables have a theoretical role to play within the heat and transport markets, but to date this has not been developed further due to a lack of knowledge. (p.23)

This is utter rubbish and we make no apology for the insult. Renewables are essential to the continuation of civilisation as we know it - without energy, there is no transport and there is only a limited amount of fossil fuels left. The lack of knowledge displayed by ETSU may be overcome by spending half an hour on the Internet with a good search engine - there is enough material there (2077 items on biodiesel alone) to satisfy the most doubting of Thomases.

Biofuels could play a part in the transport markets as a source of fuel with essentially zero net carbon emission. (p.23 again)

Delete "could"; insert "must", to comply with the governmental pledge to reduce emissions.

Practical fuel cell systems are therefore likely to include a fuel processor, which converts the hydrocarbons to a hydrogen-rich gas. (p.37)

And just where are the hydrocarbons going to come from? We will pass over further references to gasoline and natural gas.

Status of Energy Crops Technology Transport Fuel

UK installed capacity - 0

EU installed capacity - 824kt/year diesel equivalent

World installed capacity - 9,753kt/year diesel equivalent

UK Industry - Relatively little interest (p.69)

In itself, this is an incorrect statement, which should read "relatively little activity". Is it any wonder? - with the penalties imposed, there's no point!

In some EU member states, considerable emphasis is being placed on the production of liquid biofuels despite their low energy ratios and poor economic performance. (p.71)

Apart from the lack of attention to accuracy (biodiesel has an energy content only a few percent lower than that of fossil diesel), it only goes to show that all the rest are idiots, aren't they? They must be - ETSU says so!

The development of energy crops has been slow. This reflects the complexity of creating a fuel supply of a novel crop and then using it in conversion plant that have not been proven commercially. (p.72)

Strange - other EEC member states appear to have made a commercial success of it.

... the cost of untaxed biodiesel .. would be approximately 26p per litre. This compares unfavourably with untaxed post-refinery fossil diesel which costs 11p per litre. (p.76)

So does the reduction of road tax on vehicles under 110cc in capacity - which has cost the government £100m in lost revenue - in terms of reduced carbon emissions.

Specific barriers for renewable energy technologies - energy crops

The major barrier to be tackled is the lack of a market for energy crops that is creating a 'no market, no crop - no crop, no market' spiral and is also preventing other organisations and other government departments becoming involved in this area. (p.223)

A sad case of the cart before the horse and a "chicken and egg" situation which has been fostered by ETSU itself. Ouch!

THE FUTURE OF BIODIESEL

As we have indicated, we believe that the reports on energy crops submitted by ETSU are basically flawed, and that HM Government has - in all innocence? - followed the advice given. This is in spite of all the activity taking place in the EU to promote the introduction of sustainable energy sources including, significantly, biodiesel.

All other research proves, quite conclusively, that biodiesel is more beneficial to both people and the environment than fossil diesel, that it is able to be produced in bulk with existing technology at cost levels comparable with the likely cost of fuel in the near future - within ten years, if not less - and that the British farming economy would benefit immensely from widespread introduction.

Given these advantages, it is therefore essential that incentives be given to potential producers. As we have stated, at present there is no point in producing biodiesel - it is under-sold by rapidly depleting fossil fuels.

This disadvantage, amounting to a penalty, may be overcome by reducing the Fuel Tax to a reasonable level. This is dictated by the Hydrocarbon Oil Duties Act 1979, with the rates amended periodically by the Chancellor of the Exchequer.

Governing the rates is a series of EEC edicts concerning competitiveness and harmonisation between member states. However, there is dispensation given in Article 8 of Council Directive 92/81/EEC, Para. 2d, which states that - In the field of pilot projects for the technological development of more environmentally-friendly products and in particular in relation to fuels from renewable resources ...... Member States may apply total or partial exemptions or reductions in the rate of duty to mineral oils used under fiscal control.

Therein lies the rub - the article refers to mineral oils. Biodiesel is a vegetable oil!

Regardless of - or possibly because of - this dichotomy of terminology, a number of member states have proceeded to reduce the rates of fuel duty on biodiesel -

Austria - 0.18 ATS/l; zero by 1.1.2000; Belgium - no exemptions; Czechia - zero taxation; France - zero taxation; Germany - zero taxation for 100% use; Italy - zero taxation; Sweden - zero taxation; Norway - zero taxation for both 100% use and as an additive.

Given that there was a total production of nearly 600,000 tonnes produced by these countries last year (1998), and Germany planning a further 100,000 tonnes for 2000, it seems that the UK has some catching up to do - our production was and still is zero. Perhaps the countries following the common-sense course had read Article 77 of the Treaty of Rome -

Subsidy (is allowed) in pursuit of regional or social policy objectives.

Or AGENDA 2000, which allows for the use of 10 to 15% of set-aside land for non-food purposes and negates the effects of the Blair House agreement, limiting EU production of oilseed rape to 1m tonnes.

THE COST OF SUBSIDY

There are some 1.5 million hectares of land currently available in Great Britain, together with a further 200,000 ha in Northern Ireland, where all fuel is imported. Given that one third of this land were put over to the production of oliferous crops, some 600,000 tonnes of biodiesel per annum would result - about 660bn litres - replacing 630bn litres of fossil diesel.

In the short term - the next five years - it is doubtful whether a production of more than 50,000 tonnes would be reached - 55m litres. Reduction of the Fuel Tax from 50.21p to 20.21p would cost the Exchequer just £16.6m after three years, against which would be balanced the taxation input from the income generated by the creation of 500 extra jobs.

Think of the Brownie points to be chalked up!

It is thought possible that the calculations used to determine the extent of the subsidy is based on the total amount of fossil diesel fuel used in the UK, in which case the subsidy would amount to around £13bn. The fact is that this amount of biodiesel could not be produced in the UK due to the lack of available land.

POLICY ISSUES

It is difficult to understand why there is such an amount of resistance against the reduction of Fuel Tax on biodiesel.

The NFFO, which has attracted heavy subsidy to date, has a commissioned capacity of 650MWe as at 31.12.98, with a target of 3,500MWe. The production of 660bn litres of biodiesel is the equivalent of 1,500 times this amount of energy. There can be no excuse for further prevarication - the sums add up.

We would therefore advise that, in order to stimulate private investment in production plant and the opportunity for crops to be grown -

HM Government immediately and clearly states the intention to reduce Fuel Tax on biodiesel to 20p per litre with effect from the next Budget for a minimum period of five years.

Draft document prepared June, 1999 by T L de Winne MF

Feedback and comments to - terry@biofuels.fsnet.co.uk

Thank you for your time