Biofuels: The Next Generation


With ethanol and biodiesel coming under increasing criticism for driving up food prices and putting biodiversity at risk, the EU has committed to ‘second-generation’ biofuels as a clean alternative for transportation – but many challenges remain before they find their way into our cars.

At the March 2007 European Council, EU leaders committed to raising the share of biofuels in transport from its current level of around 2% to 10% by 2020, with a view to reducing Europe's dependency on oil and contributing to the fight against climate change. 

The 10% target is binding - under the condition that the biofuels produced are sustainable and that so-called 'second-generation biofuels' become commercially viable. 

The conditionality is linked to increasing concerns about the sustainability of those first-generation biofuels currently available - such as biodiesel and bioethanol - which are made from agricultural crops (such as corn, sugar beet, palm oil and rapeseed).

But during negotiations over the new Renewables Directive, fears of rising food prices and biodiversity loss as a result of land being diverted to biofuel production, and questionable CO2 reduction values have led to calls for the reduction or outright rejection of the target. 

The European Parliament's industry and energy committee, despite confirming the 10% target by 2020, asked for at least 40% of this goal to be met by "non-food and feed-competing" second-generation biofuels or by cars running on green electricity and hydrogen. MEPs also backed stricter "sustainability criteria", including an obligation for biofuels to offer at least 45% carbon-emission savings compared to fossil fuels (EURACTIV 12/09/08).

Consequently, the December 2008 EU summit endorsed a compromise on the 10% biofuels target, moderating the target to include other renewable sources (EURACTIV 05/12/08).  

For more information on first-generation biofuels, see our LinksDossier on Biofuels for transport, as well as EURACTIV 24/10/06 and EURACTIV 30/01/07

What are second-generation biofuels? 

According to a UN report on biofuels, "second-generation fuels are made from ligno-cellulosic biomass feedstock using advanced technical processes". 

Ligno-cellulosic sources include 'woody', 'carbonous' materials that do not compete with food production, such as leaves, tree bark, straw or woodchips. 

However, in the longer term, many envisage biofuels being made from materials that are not even dependent on arable land, such as algal materials growing in water. 

Advantages of second-generation biofuels:

A public consultation carried out by the Commission between April and July 2006 shows that the majority of stakeholders believe that second-generation biofuels are more promising than their first-generation counterparts because: 

  • They have a more favourable GHG balance. Cellulose ethanol could produce 75% less CO2 than normal petrol, whereas corn or sugar-beet ethanol reduces CO2 levels by just 60%. As for diesel, Biomass-to-Liquid (BtL) technology could slash CO2 emissions by 90%, compared with 75% for currently-available biodiesel; 
  • They are able to use a wider range of biomass feedstocks, and do not compete with food production
  • They could use less land. For example, a new genetically modified variety of sugarcane is able to produce up to 200 tonnes of biofuels per hectare. In this case, plant science could triple production volumes per hectare of land.
  • They could be produced at cost-competitive prices, especially if low-cost biomass is used, and;  They offer a better quality of fuel than first-generation biofuels. 


  • Cost: Relatively high production costs (currently higher than those for both mineral oil-based petrol and conventional bio-ethanol) mean that second-generation biofuels cannot yet be produced economically on a large scale. 
  • Technological breakthroughs: Key developments are needed on enzymes, pre-treatment and fermentation in order to make processes more cost- and energy-efficient. Biotechnology could offer a solution by offering the opportunity to change the characteristics of feed materials for fuels. 
  • Infrastructure needs: The commercialisation of second-generation biofuels will also necessitate the development of a whole new infrastructure for harvesting, transporting, storing and refining biomass. 

A lack of incentives: 

Long-term conditions are needed to bring second-generation fuels to market despite all these obstacles. 

Whereas, already in early 2007, the US Department of Energy announced a $1.2 billion aid package, in partnership with industry, aimed at making cellulosic ethanol cost-competitive with petrol by 2012, European governments have yet to commit anything like these kinds of resources towards achieving scientific breakthroughs in the second-generation sector. 

Nevertheless, activities under the EU's 7th Research Framework Programme do have an increased focus on second-generation biofuels and BtL processes in particular, although financial resources are seriously limited.

The Commission instead hopes that a review of its 
Fuel Quality Directive
- introducing an obligation for suppliers to reduce "lifecycle greenhouse emissions" from their fuels by 1% per year as of 2011 (article 7A) - and the introduction of "biofuel sustainability criteria" in its proposed Renewables Directive will encourage a shift towards more sustainable second-generation production (see LinksDossier on Biofuels for transport). 

Nevertheless, incentives to invest in second-generation technologies could be strenghtened following a key vote in the European Parliament on 11 September. Indeed, Parliament's Industry and Energy Committee, which has the lead on the dossier, voted in favour of a mandatory breakdown in the EU's 10% biofuel target, specifying that at least 40% of the 2020 goal must be met from "non-food and feed-competing" second-generation biofuels or from cars running on green electricity and hydrogen (EURACTIV 12/09/08). 

Technological breakthroughs needed:

The processes for developing second-generation biofuels are much more complex than those used for first-generation fuels and both the technologies and the logistics are still at a very early stage. 

While with first-generation biofuels, natural oils are extracted from the plants to produce fuel, second-generation processes, working with waste and ‘woody’ materials require complex catalysis and chemical alteration procedures to create the oils in the first place. 

So far, only certain small experimental or demonstration plants exist, and production is yet nowhere near to being started on a commercial level. 

Below are some explanations as to the various processes currently being developed to produce second generation biofuels. 

1. The bio-chemical pathway: transformation of ligno-cellulosic materials into ethanol:   

  • Preparation of the raw material. Currently, ethanol can only be made from celloluse (which represents 50% of lignocellulose at most) and not from the other two components of lignocellulose, ie. hemicellulose and lignin. Thus, the cellulose has to be isolated from the other elements using controlled pressure levels. In order to enhance profitability, research on obtaining ethanol from hemicellulose (which represents up to 35% of lignocellulose) is underway.  
  • Conversion of cellulose to glucose with the help of enzymes. The problem is that the enzymes necessary to break down the cellulose are not yet very efficient and can only produce a dilute mixture, which must then be distilled into conventional ethanol. Research is being carried out in order to make the process more efficient.  
  • Fermentation of the glucose to obtain ethanol. There are at present three demonstration cellulosic ethanol plants in the EU (Sweden, Spain and Denmark). 

2. The Biomass-to-Liquid (BtL) pathway (also known as the thermo-chemical pathway or gasification): 

  • Transformation of vegetable resources into a homogeneous material that can be injected into a gasifier. This can be done either via pyrolisis (using temperatures of 500°C for a few seconds in order to produce liquid 'bio-oils' from solid biomass, such as coal or wood) or via torrefaction (using temperatures around 300°C for about an hour, to make materials like wood easier to grind into a finely-divided solid).  
  • The feed is then gasified to obtain synthetic gas, known as 'syngas', which mostly contains hydrogen (H2) and carbon monoxide (CO). This process generates large quantities of CO2 that are not converted into motor fuel, lowering the end-fuel's "well-to-wheel" carbon footprint. Furthermore, gasification generally requires large-sized facilities and big capital investments, which makes progress in this area slower than in others. So far, no specific biomass gasification technologies have reached the industrial stage. However, solutions derived from technologies for natural gas, coal or petroleum are being put to use. Also, future biomass gasification units could be integrated into existing refineries, thereby helping to reduce capital and operating costs.  
  • Conversion of the syngas into liquid hydrocarbons via a catalysed chemical reaction. This procedure is known as Fischer-Tropsch synthesis and can yield gasoline, diesel or kerosene, according to the type of catalyst used.  
  • So far, only a handful of companies have commercialised Fischer-Tropsch technology and these projects still use natural gas (gas-to-liquid or GtL) and coal (CtL), rather than biomass. BtL demonstration plants are operating in Germany and Sweden. 

3. Hydrogenation and cracking: 

  • Research is also underway that seeks to convert bio-oils and fats directly into motor fuels, without gasification. Hydrogenation can be used to make diesel fuel while cracking can yield gasoline. These processes could also use algae oil as a feed. 

The Commission is aiming for "the earliest possible entry into the market of second-generation biofuels". Energy Commissioner Andris Piebalgs added: "Second-generation biofuels can considerably widen the feedstock options and provide for a far larger potential of market share, with the potential for significant greenhouse gas emission savings."

A study by the German Energy Agency found that "second-generation biofuels, such as Fischer-Tropsch Biomass-to-Liquids (BtL) are technically feasible and one of the most promising options for future fuels". The study concluded that Germany has sufficient biomass available for large-scale BtL production to meet 20% of today's fuel requirements or up to 35% by 2030 - at production costs of less than €0.80 per litre. It adds that costs can be further lowered by taking advantage of "substantial synergies" obtained by integrating BtL production in existing refinery and chemical plants. 

The European Biomass Association (AEBIOM) calls on the Commission to avoid discrimination between first- and second-generation biofuels, claiming that this would not only lead to "endless discussions" regarding the definition of these fuels but also to potential negative discrimination against processes that are efficient in terms of CO2 mitigation, such as the production of "very efficient biofuels" like biogas, from agricultural by-products (manure) and energy crops. 

It further asks the Commission to send out a clear message that first-generation biofuels are still needed in the short term as second-generation ones are not yet commercially ready. "Arguments from oil companies and some NGOs that we need to wait for better technically and environmentally-performing biofuels should not be considered. In fact, the first generation biofuels will prepare the ground for 2nd generation biofuels that will finally find their place in the market when they will become competitive." 

The European Petroleum Industry Association (EUROPIA) also rejects any distinction between first- and second-generation biofuels, stating that any support must be technology-neutral and create a level playing field, in order to stimulate the development of biofuels capable of both delivering the greatest GHG-emissions benefits and achieving greater penetrations into the fuel pool. 

The European Biodiesel Board (EBB) stresses: "It is not because a technology employs a particular kind of raw material that it should be preferred to others", adding that second-generation biofuels – or "future biofuels technologies" as it terms them – require much higher investment costs and are based on more energy-demanding processes. 

Furthermore, it questions the cost-effectiveness and GHG efficiency of transporting impressive volumes of very low-weight raw materials - such as straw - towards very large-scale economy processing plants. It stresses that while ligno-cellolusic resources such as straw are considered to be "0" value-purchase raw materials – thus cutting production cost estimates – "it is clear that, if the technology were to be employed on a large scale, straw would become an economic good with much higher prices." 

It adds that present technologies, such as biodiesel, already offer "very important advantages in terms of reduced GHG emissions, security of supply and rural development" and that the focus should lie on finding alternative raw materials to improve their environmental impact and price competitiveness. 

The European Bioethanol Fuel Association (eBIO) on the other hand endorses a definition of second-generation biofuels based on the type of raw materials that they are made with. It recommends setting a minimum EU production target for cellulose bioethanol, for instance 1 billion litres by 2012, and proposes altering current support measures for energy crops in order to make growing crops for second-generation biofuels more attractive. "A strong boost will be achieved if we enter the stage where bioethanol fuel production is dominated by second-generation biofuels". 

The European Automobile Manufacturers Association (ACEA)  said that EU harmonisation will be key in promoting the development and deployment of second-generation biofuels: "There should, as far as possible, be a consistent EU framework on taxation policy related to biofuels and vehicles that are specifically adapted to use such biofuels." 

The association does not see any objection to promoting particular pathways, so long as incentives are "proportional to the real environmental benefits in terms of CO2 savings and the availability of the different pathways". 

Dr Thomas Schlick, managing director of the German Automobile Industry Federation (VDA) added: "BtL is one of the most promising renewable energy technologies for fuels. Thanks to their large potential for CO2 savings and increased efficiency, BtL fuels can make a crucial contribution to improving the climatic balance of transport." Furthermore, he noted: "BtL fuels are completely compatible with today's engines as well as future engine generations." 

Global conservation organisation WWF acknowledges that the use of forest material for energy will allow higher yields, greater C02 emission savings, and require fewer inputs than agricultural energy crops such as sugar beet, oil seed rape or wheat. "However, they are not in themselves the answer. As with other agricultural crops, to reap their greatest environmental benefit, best practice in their production must be ensured. Non-use of best practices, such as intensive input use and complete harvesting of the resource could, for example, require a greater energy input than that generated from the processing of the resource", it warned. 

Environmental NGO Friends of the Earth stressed the need for a debate on what is acceptable as a second-generation biofuel, stressing in particular that it does not support the use of genetically modified crops or trees as a source of biofuel. "The development of second-generation fuels should only be supported if they are acceptable to the public and the risks to the environment and to society are preventable or minimal. Second generation should not only be measured on climate performance but should also fulfill sustainability criteria. A complete life cycle analysis should supplement their development to ascertain the risks involved. They must also prevent irrational land use patterns and the skewing of food and commodity prices. The use of GM crops should not be permitted in the production of biomass."

BirdLife International, the European Environmental Bureau (EEB) and the European Federation for Transport and Environment (T&E)  said: "We do not believe that any particular biofuel technology should be favoured over another, and that, instead, support should be organised for the delivery of GHG emissions savings."

According to them, the measures proposed under the draft review of the Fuel Quality Directive, aimed at cutting lifecycle greenhouse-gas emissions by 1% annually, combined with a "robust" sustainability certification system for biofuels, can serve this purpose better than specific support for second-generation fuels. Indeed, they stress, the latter option could lead to "perverse outcomes", such as encouraging production pathways that are considered second-generation but fail to deliver significant GHG emissions, or leaving out other biofuels that have the potential to bring about major GHG emission reductions, such as biogas from animal manure and sludge. 

Green NGO Biofuelwatch laments the lack of discussion regarding the sustainability of second-generation biofuels. "The serious risks which GM crops and technologies pose to biodiversity appear have been ignored, even though second-generation technologies will depend on widespread use of GM crops and trees, as well as GM microbes and fungi, which pose serious risks to ecosystems and are likely to cross into food production via cross-pollination." 

It recalls that cellulosic ethanol still produces far less energy than is needed to produce it and says that major breakthroughs in genetic engineering will have to occur for the technology to become affordable. "Nobody can predict whether those breakthroughs will happen in the next few years or decades." 

  • 23 Jan. 2008: Commission presents a mid-term review of its Biofuels Directive, as part of a package on promoting renewable energies.
  • 11-12 Dec. 2008: EU summit agrees final version of energy and climate change package, including a directive on the promotion of renewable energies.
  • 17 Dec. 2008: Parliament endorses the energy and climate change package (EURACTIV 18/12/08).
  • 6 Apr. 2009: Council of Ministers adopts final legal texts of the energy and climate change package (EURACTIV 07/04/09).
  • Most experts expect second-generation biofuels to be commercialised on a large enough scale to make an impact in the transportation sector within five to ten years

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