New study finds biofuels are more cost-effective than electric vehicles

by Search Gate staff. Published Tue 26 Nov 2013 11:45, Last updated: 2013-11-26
Biofuels could be a more effective carbon reduction tool

Biofuels could be a more cost-effective way to reduce greenhouse gases than electric vehicles, at least in the short term, according to a new report by UK-based Element Energy.

The report, “The Role of Biofuels Beyond 2020,” commissioned by BP, found that biofuels will become a vital part of energy policy because the vehicle market will still be dominated by internal combustion engines until at least 2030.

While electric vehicles will inevitably help Governments to reach their carbon emission targets, which in the case of the UK is a reduction of 80 per cent from 1990 to 2050, they are likely to play a smaller role in the short term, while the technology develops and becomes favourable to the mass market.

“In the long term, electric plug–in and fuel cell vehicles are likely to play a significant role in the transport mix. But we also expect high numbers of (internal combustion engine) derived vehicles to still be in circulation by 2030, so lower carbon liquid fuels have to play a major part in meeting the UK’s CO2 targets,” said Alex Steward, associate director of Element Energy.

The report studies the effectiveness of biofuels based on three different possible outcomes. The first case assesses a “low biofuels” case in which conventional biofuels are blended with petroleum at low levels, a “medium biofuels” case using higher biofuel blends in addition to increasing levels of cellulosic biofuels, which have improved carbon impacts, and a less likely “high biofuels” case, which blends bio-based butanol and drop-in biofuels at high rates.

The report found that the medium case would result in a 9 per cent reduction in emissions by 2030 compared to the baseline, while the high case would lead to a 27 per cent reduction, with costs per metric ton of carbon dioxide avoided £80 and £123 respectively.

Element Energy says that biofuel blending would cost consumers an average £13 more in comparison to a £195 annualised cost for purchasing an electric vehicle. When widened to the entire UK, biofuels would cost £336 million compared to £1.2 billion for electric vehicles up until 2030, a very generous saving.

“Biofuels also offer a more cost effective way to reduce emissions over the next 17 years, with a fuel premium of £336m in 2030 against the £1.2bn it would cost in customer incentives to achieve the same CO2 savings with plug-in vehicles,” added Stewart.

So far, take-up of electric vehicles has been slow. Despite plug-in vehicles being released by the majority of major manufacturers, providing much improved fuel economy and travel costs, many motorists have been put off their premium price and low range. Even a Government subsidy of £5,000 hasn’t been enough to tempt road users to invest widely in electric, with vehicles requiring overnight charging every 70-100 miles.

While prices will eventually fall as manufacturers benefit from economies of scale, with battery ranges improving too, in the meantime customers will ultimately base their purchasing decisions on value-for-money and performance, rather than environmental savings. Combustion engines will continue to be the more popular technology, placing biofuels at a significant medium-term advantage.

However, the continued development of biofuels will much depend on the ability of producers to further develop cellulosic varieties, as indicated by Element Energy’s positive medium biofuels forecast.

This has been helped by European Parliament’s recent backing to limit the use of food crops in the production of biofuel products. The EU has stated that first-generation biofuels, like corn-ethanol, which puts pressure on scarce food resources and require vast amounts of space, should not exceed six per cent of transport energy by 2020, with higher focus on advanced cellulosic biofuels like swtichgrass or seaweed.

However, these “second-generation” fuels are still in their very early stages of development, requiring expensive production processes and large levels of new investment. Whether biofuels can genuinely become the most cost-effective form of vehicle transport from now until 2030 will therefore depend on the pace of new technological development.

This article was written by Robert Potts, managing director of RPM Fuels, suppliers of tanks and equipment to the fuelling industry; check out his latest updates on Google+

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