Lead, Squabble or Waffle Away: Shuffling the Deck on Global Bioenergy

November 27, 2017 |

Gerard Ostheimer

Doug Faulkner

By Gerard Ostheimer and Douglas L. Faulkner

Special to The Digest

While Washington squabbles and Brussels waffles on renewable fuels policy, the rest of the world is eager to grow an advanced bioeconomy to meet urgent needs for energy security, green growth and rural development. In the U.S., fighting between Big Ag and Big Oil over first-generation biofuels is slowing the deployment of advanced biofuels projects. This further undercuts the industry in a depressing frittering away of once-bright bipartisan hopes. The resulting withering of investor interest could erode the current technology lead of the U.S. renewable fuels and chemicals sector.

The European Union, torn between legacy agricultural interests, future-oriented technologists and aggressive anti-biofuels environmental zealots, looks to be shuffling toward the mushy policy middle ground, satisfying no one and signaling its abdication of a once-possible leadership. A few bioenergy stalwarts, like the Nordic bloc and France, though fight rearguard actions against the overall retreat.

Meanwhile, Brazil is now re-emerging as the “soft power” leader of the global bioeconomy. Leveraging post-Paris Agreement global interest in developing a low carbon world, Brazil founded the Biofuture Platform, which aims to grow the supply of fuels and chemicals derived from cellulosic feedstocks. That effort looks to motivate collaboration among its member governments, so as to accelerate the deployment of sustainable low carbon alternatives to the use of petroleum in transport, chemicals and plastics. Launched last year at the 22nd Conference of the Parties of the UN Framework Convention on Climate Change (UNFCCC), aka COP22, the Biofuture Platform joins several international technical agencies in promoting bioenergy and biofuels as a means to a sustainable, low carbon future. The Platform has 20 members, including Brazil, Canada, China, Denmark, Finland, India, Italy and the United States.

The first Biofuture Platform summit was held October 24 – 25 in Sao Paulo, Brazil. To ensure active participation of the private sector, Brazil co-hosted the summit with below50, which is a global campaign to grow the market for the world’s most sustainable fuels through fostering B2B demand. In the course of the summit it became clear that international actors from both the public and private sector agree that:

  1. The global bioeconomy needs to be rapidly scaled up in order to fight climate change;
  2. There is ample feedstock potential to be sustainably tapped through better agricultural practices and the use of cellulosic feedstock and wastes;
  3. Besides the climate advantages, the bioeconomy offers huge opportunities for job creation, sustainable development, technological innovation, agriculture intensification and energy security; and
  4. Bold, smart, stable policies are needed to level the playing field and overcome the challenges facing the sector.

Given the host and location, the event was dominated by discussion of the situation in Brazil, but the conference also highlighted new geographies with the growing demand for biofuels and renewable chemicals. Based on presentations from government officials, Brazil, California, Canada, China and India are committed to low carbon fuels and will be the growth markets in the foreseeable future. Particularly impressive was CEO Bernardo Gradin’s confidence in GranBio’s ability to produce cellulosic ethanol from sugarcane bagasse.

Last week in Bonn, Germany at COP23, Brazil kept the global momentum going by positioning the bioeconomy as a cornerstone of the anticipated New Carbon Economy. Regardless of your attitude towards the UN or its work on climate change, you’ve got to at least give Brazil credit for taking advantage of a marketing and branding opportunity. Working with its partners, like below50 and the International Energy Agency, Brazil tried to convince the assembled government officials and leaders of environmental groups to recognize bio-fuels and -chemicals as part of the solution and not part of the problem.

It seems to be working. While the U.S. delegation hosted an event promoting fossil fuels, 18 countries joined Brazil in endorsing the Biofuture Platform Vision Statement. The United States, which is a founding member of the Biofuture Platform, refused to sign, losing the chance to join Brazil, China and India in arguing for a vibrant global bioeconomy.

In the Vision Statement Argentina, Brazil, Britain, Canada, China, Denmark, Egypt, Finland, France, India, Indonesia, Italy, Morocco, Mozambique, the Netherlands, Paraguay, Philippines, Sweden and Uruguay agreed to “develop collective targets prescribing the contribution of sustainable bioenergy to final energy demand and as a percentage of transport fuel use”.

The countries that signed the Biofuture Platform Vision Statement are also walking the walk. Both industry and government in Brazil are pursuing the Renovabio program that aims to revitalize the Brazilian bioeconomy. Canada is developing a national Low Carbon Fuel Standard. China plans to implement an E10 mandate by 2020. India is pressing ahead on cellulosic ethanol with strong government backing.

A Chinese E10 mandate should be a wake-up call for the U.S. Ethanol mandates in the U.S. and Brazil went a long way to turning agriculture, biotechnology and renewable chemicals into high-tech growth sectors. China is already making huge strides in these areas and the stable demand of an ethanol mandate could drive further investment and growth. Ag- and bio-technology companies are among the crown jewels of the American economy.

The possible abdication of U.S. leadership in an area of former strength should cause alarm bells to ring among both red farm states where the farm economy needs a jolt and coastal blue states whose universities, investors and manufacturers all stand to lose. Meanwhile, keep an eye on Brazil, China and India as they position themselves to benefit as the new leaders of this potentially huge and much more competitive global marketplace.

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Category: Thought Leadership

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