Op-Ed:Biofuels Have Central Role in Low-Carbon Economy

Source: By Bliss Baker, President, Ethanol Producer Magazine • Posted: Thursday, September 21, 2017

What a difference a year makes.

In 2016, the global community was flush with enthusiasm for collective action on climate change coming out of the ratification of the Paris Agreement. A total of 195 world leaders, including from traditional holdouts India and China, enthusiastically signed on to the agreement as being in their national interest.

Leaders were taking these positions not just out of concern for the welfare of the global climate, but in acknowledgment of a new normal for international trade and economic growth.

For years, the private sector and experts from nongovernmental organizations had been signaling the shift in the global economy away from historically favorable investments in fossil fuels to growing opportunities in renewables. These predictions are now being borne out in the real world as private sector investment and employment growth transition from fossil fuel to renewable energy technologies.

The International Energy Agency reported that between 2014 and 2016, upstream oil and gas investment dropped by 44 percent, while investment in new renewables-based power capacity remained the largest area of electricity sector spending in 2016.

In terms of employment, the International Renewable Energy Agency reported in its most recent annual review that current trends project the number of people working in the renewables sector could reach 24 million by 2030, compared to 9.8 million in 2016. It estimates this job growth in renewables would more than offset anticipated fossil-fuel job losses over the same period.

This economic transition is taking place despite the fact that global fossil fuel subsidies continue to be more than twice as large as those for renewables.

While these encouraging figures show how far energy generation from renewables has come, they also highlight a stark reality about the lack of ambition in how biofuels are treated in comparison to other renewable technologies. In sharp contrast to the progress made in integrating renewable technologies elsewhere, the global transport sector has the lowest renewable energy share of any sector, even though it represents 25 to 30 percent of global emissions.

Where policymakers from advanced economies have set ambitious renewable targets aimed at other technologies, and taken the steps necessary to achieve them, the same can no longer be said for biofuels. The same countries that showed policy leadership in establishing the industry have recently adopted a shortsighted approach that threatens to undermine the progress that has been made to date.

Notwithstanding these setbacks, the overall outlook for the industry is extremely positive.

Nongovernmental organizations ranging from the IEA, the Organization for Economic Cooperation and Development, IRENA and the United Nations’ Food and Agriculture Organization have reviewed real-world biofuels production data and assessed the challenges countries will face in maintaining growth while transitioning the global economy to a low-carbon future. They have concluded that to achieve their climate targets and generate long-term economic growth, governments will need to integrate measures to tackle climate change into regular economic policy.

As the only commercially available and immediately dispatchable low-carbon transport fuel alternative to crude oil, biofuels are the obvious choice for countries to affordably slash transport sector greenhouse gas emissions and drive economic growth. Given that global blending capacity is nowhere near its full potential, biofuels will have a vital role to play in enabling the transition to a sustainable, low-carbon global transport sector.

To achieve these objectives, it is crucial that governments avoid introducing any barriers to free trade and commit to increasing the ambitiousness of policy frameworks that are proven to be successful. This reality is already being recognized, with more than 60 countries having launched biofuel programs and set targets for blending biofuels into their fuel pools.

Given the demonstrated success of the industry to date, and the growing number of independent studies concluding that biofuels are fundamental to sustainable growth and the global transition to a low-carbon economy, now is the time for policymakers to drop the timidity and be ambitious.

It’s no longer just an opportunity. It’s a necessity.

Bliss Baker, President, Global Renewable Fuels Alliance