Can advanced feedstocks fill a future biofuels supply gap?

Worldwide decarbonization efforts call for fuels with a low carbon intensity (CI), making biofuels a critical alternative source of fuel. While the primary focus is on cutting greenhouse gas emissions in road transport, targets for the aviation and the shipping sectors exist as well in several countries. As a realistic means to meet targets for emissions reduction, biofuels are poised for growth across the transportation sector.

Of course, there are challenges, such as the growing - and entirely valid - concern that crops may not be able to cover the expected demand for low CI fuels. Current supply-side estimates for biofuels from non-crop feedstock and the planned investment in this field is resulting in the conclusion that much needs to be done to fill the emerging supply gap for low CI fuels.

Additionally, biofuels are called upon to supply both fuel and food for a growing global populous. Supplies of non-crop products made from waste, residues or various energy or cover crops do not compete with food and feed production - and they will have to rise sharply in production in order to fill the gap.

What are advanced biofuels?

The range of "advanced" inputs for biofuels production outside the crop segment includes:

• "new" crops, such as oil-bearing plants or cover crops like carinata, camelina, tree oils, algae, or pennycress, or sources of cellulose like switchgrass, giant reed or miscanthus,
• agriculture residues, like manure, straw, corn cobs, or sugarcane bagasse.
• various types of forestry biomass
• waste and residues, such as used cooking oil, animal fats, municipal solid or industrial waste, tall oil and the by-products of industrial palm oil production such as palm oil mill effluent.

These inputs can yield so-called advanced biofuels (AB). Their availability and their economics vary widely. The term 'AB or 'AB feedstock' is not automatically a synonym for innovation. The use of cellulosic ethanol (mainly made from ag residues or forestry biomass) has been known for more than 100 years. In oils, crops like the castor bean are already well known in the industrial sector.

A category which saw extraordinary growth already in recent years is biodiesel made from used cooking oil (UCO) and, to a lesser extent, animal fat. Biofuels offered a new outlet for products which have alternative uses or were partly regarded as waste. At the same time, seed companies have adjusted to the new energy policy targets and food supply concerns by developing a range of crops for bioenergy production that do not compete with food.

AB feedstock can of course also refer to new products but so far, the pathways mainly yield the same fuels as those from manufactured from crops. These are ethanol, fatty acid methyl esters (FAME) and hydrotreated fatty esters and acids (HEFA), to be used as renewable diesel (RD) or sustainable aviation fuel (SAF), as well as road fuels including co-processed liquid biomass.

SAF can also be produced from ethanol in an alcohol-to-jet fuel (ATJ) process. Products like methanol or butanol from renewable feedstock which can also be used as blending component exist but play no role at the global level. The legal definition of AB and feedstock differs across the globe, reflecting differences in policy preferences.

There is massive market potential for advanced feedstocks to meet the gap in supply needed to meet forecast demand of low CI fuels.

To learn more about this topic, S&P Global Commodity Insights are delighted to announce a new report - Feedstocks for Advanced Biofuel Production: The 2030 Supply Gap - that has just published. To download the report brochure and find out more information, please click here.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.