Biofuels: environmental scan

Biofuels, a renewable natural fuel source, has the potential to: serve as an alternative to fossil fuels; meet climate change commitments; and reduce reliance on fossil fuels and dependence on foreign oil imports. This research report aimed to assess the scope for innovations within the life sciences industry which could add value in the biofuels market and assess the real market opportunities for Scotland under a commercially viable framework. This environmental scan is the forerunner of the ITI Life Sciences’ foresighting report on biofuels.

The methodology consisted of an examination of the biofuel market and a consideration of the impact on market segments of legislation, political dynamics, economics, environmental impacts, sociocultural issues, and technological challenges.

The report finds that liquid biofuels offer a potential opportunity for Scotland's crop base to diversify and for Scottish academia and its industrial base to add value via collaboration. Biodiesel and bioethanol are the principal commercially viable biofuels available. The environmental foot-print of the feedstock used in bio-diesel production, and the impact of its specification on bio-diesel quality is a key element in selecting feedstocks. It is likely that blend volumes of bioethanol or biodiesel into transport fuels will increase in coming years, placing greater demand on producers and the industry as a whole. The biofuel market continues to be driven by global and European legislation. However, nineteen EU member states have failed to legislate and nine have not fixed targets resulting in a new target of 5.75 per cent biofuel usage by 2010. The UK government Renewable Transport Fuel Obligation (RTFO) initiative creates a clear market need. UK capacity for biodiesel production has increased with further major capacity increases proposed, but scarcity of domestic source material remains an issue.

Aside from building infrastructure to satisfy production demand, the report recommends that technology gaps related to life sciences should be assessed to determine areas for innovation. For the currently inefficient production of bioethanol, a range of issues needs to be addressed, including: the net energy balance of bioethanol production; suitable feedstock availability in the UK/Scotland; and the innovation surrounding the production yields of bioethanol from lignocellulose and other forms of biomass. For biodiesel production, the key challenges to be investigated are: how to improve oil yield from existing crops; investigate the development of new input crops; and find alternative high value added uses for by-product.