Biofuels remain an important and growing sector for developing countries
The development of competitive second-generation biofuels, which are made from woody crops, agricultural residues or waste, will pose a number of challenges to developing countries
Biofuels now account for 1 per cent of global energy use, a new UNCTAD report on the state of the global biofuels market has found, with second-generation technologies, climate change concerns and economic pressures shaping the future of this increasingly important sector.
Nonetheless, "while alternative energy sources are growing faster than any other energy source, they still account for a very limited share of primary energy demand, therefore they are not expected to replace fossil fuels but to play a complementary role in satisfying the world energy demand," the report says.
The State of the Biofuels Market: Regulatory, Trade and Development Perspectives was launched on 24 September at the World Bio Markets Brazil Conference in Sao Paulo, Brazil, and offers a comprehensive snapshot of today's biofuels market and how it contributes to enhancing access to renewable energy sources sustainably and improving the livelihoods of people in developing countries.
The report is an update of a similar report produced by UNCTAD in 2006 and notes that as of 2014 bioethanol and biodiesel had already become established products traded daily in all continents thanks to their use in the transport sector, especially for road vehicles.
However, an important development has been the emergence of alternative markets for liquid biofuels, which are now used in commercial aviation, electricity generation, for cooking energy and even in maritime transport.
As well as offering analysis of the state of today's biofuels market, the report contains policy recommendations for developing countries to make beneficial use of biofuels.
These include the creation of regulatory frameworks tailored to national resource endowments which do not antagonize food and energy supplies but rather enhance agricultural productivity, rural income and workers' skills.
The development of competitive second-generation biofuels, which are made from woody crops, agricultural residues or waste (unlike first generation biofuels made from the sugars and vegetable oils found in arable crops), will pose a number of challenges to developing countries, the report says.
One key recommendation is a call for international strategies to avoid the emergence of a technological gap between land-intensive first generation and capital-intensive second-generation biofuels.
Developing countries also need to:
- ensure that the cost of sustainability certification is spread along supply chains in a way that protects small farmers from undue cost burdens
- promote a continuous inflow of private investment and production and process technologies to developing countries, especially through predictable business environments
- prioritize research and deployment of advanced technologies that can convert non-edible biomass into bioenergy products, doing so in cooperation with other countries to reduce costs
- facilitate trade by engaging in consultations and adoption of regulations which are compatible with sustainability rules adopted in major markets