So far, the EU has mainly focused on using more first-generation biofuels, such as biodiesel and bioethanol. However, an increasing number of doubts are being raised about this strategy:
- Can first-generation biofuels really contribute to reducing GHG? In principle, biofuels are "carbon neutral", but certain studies show that biofuels can actually produce more GHG than conventional fuels if one includes the emissions from agriculture, transport and processing involved in their production.
- Can first-generation biofuels compete with traditional fossil fuels? EU-produced biodiesel just breaks even at oil prices around €60 per barrel, while bioethanol only becomes competitive with oil prices of about €90 per barrel.
- Are first-generation biofuels driving up the price of food? Biodiesel production has significantly increased the consumption of rapeseed within the EU, driving the price of edible oils to record levels. Increased biofuel consumption is also likely to cause significant growth in the production and consumption of ethanol, pushing up the price of sugar.
- Are first-generation biofuels greener than traditional fossil fuels? In order to reach its 5.75% biofuels target, Europe will have to rely on imports of ethanol from Brazil, where the Amazon is being burned to plant more sugar and soybeans and Inodnesia where rainforest land is being cleared out to house palm oil plantations. Some environmental groups are already terming first-generation biofuels “deforestation diesel” – the opposite of the environmentally friendly fuel it is supposed to be.
An increasing number of voices are therefore calling on the EU to focus its attention on “second-generation” biofuels.
The results of a public consultation carried out by the Commission between April and July 2006 in view of reviewing its biofuels strategy before the end of 2006 shows that the majority of stakeholders believe second-generation biofuels to be promising because:
- They have a more favourable GHG balance compared to most current biofuels;
- they can be produced at cost-competitive prices, especially if low-cost biomass is used;
- they are able to use a wider range of biomass feedstocks; - they do not compete with food production, and;
- they offer a better fuel quality than first-generation biofuels.
The main pathway for second-generation bioenergy production in the EU is gasification - also called the biomass-to-liquid (BTL) pathway. It uses high temperatures, controlled levels of oxygen, and chemical catalysts to convert biomass into liquid fuels, including synthetic diesel and di-methyl ether (DME).
Gasification generally requires large-sized facilities and big capital investments, which makes progress in this area slower than in others. Nevertheless, the BTL pathway can process lignin, which comprises about one-third of plant solid matter, and can thus achieve higher liquid yields, displacing more petroleum.
Current EU President Finland announced in October 2006 that it intended to lead the way in terms of second-generation biofuels, notably by providing funding for new gasification equipment for VTT, the Technical Research Centre of Finland. The new equipment will allow synthesis gas to be refined from biomass for the production of diesel fuels. The gasification plant will be able to exploit any carbonous raw-materials, e.g. forest industry residues, bark, biomass from fields, refuce-derived fuels and peat.
In its review of the biofuels directive, the Commission will be looking to enhance support to member states for developing such second-generation technologies. It will also look into setting new targets for biofuels use and could even decide to make them mandatory. It is also likely to impose minimum environmental standards for biofuels production.