The rising popularity of biofuels is not confined to one country or region. Around the world, producers and consumers see the economic and environmental advantages of renewable fuel sources.
Brazil is the world’s second largest ethanol producer, drawing upon its large sugar cane acreage to feed production. That has led planting of sugar cane to rise from 2 million hectares in 1975 to 6 million hectares in 2005. Approximately 55 percent of that cane was used for ethanol production.
It is expected that planting of this crop will continue to rise, with another 2.5 million hectares in production for food and fuel by 2010. Some experts are forecasting that acreage could double by 2014. Brazil currently has 350 cane mills, with 90 new facilities in the planning stages.
Sugar cane has an uptake of 1 million tonnes of potassium for every 1 million hectares in production. Brazil’s farmers are currently applying only 400,000 tonnes of potash per million hectares, which suggests significant potential for consumption increases.
China is the world’s second largest consumer of oil and currently imports 120 million tonnes of crude oil annually. This is roughly 40 percent of its consumption. It has four official ethanol plants (although numerous others are operating and contributing to the ethanol supply), but these facilities can only replace a small percentage of the annual oil consumption.
Plans have been announced to increase China’s annual ethanol production from the current 1.0 billion gallons to 1.7 billion gallons by 2010. At current corn production levels, this would require 11 percent of China’s 5.1-billion-bushel corn crop. In total, ethanol and other biofuels are expected to replace 2 million tonnes of crude oil by 2010, with a further increase to 10 million tonnes by 2020.
The challenge will be to produce enough crop material to feed biofuel production, as corn stocks have been declining. China currently imports 100,000 tonnes of corn each year and its Cereals and Oils Association estimates that an additional 10 million tonnes could be needed by 2010.
Its ability to fill this need will be challenged by its low crop yields and limited land resources. Soils in many regions of China have serious potassium deficiencies and increased potash imports will be needed to meet future demand for food and fuel.
PUMP IT UP: Biodiesel is a new product with excellent global growth potential
Biodiesel is another renewable fuel source with growing demand that is expected to have an impact on the world’s long-term energy needs and on crop production.
Approximately 1 billion gallons of biodiesel were produced globally in 2005. William Thurmond of Emerging Markets Online has indicated that the market for biodiesel is poised for explosive growth and says by 2020 it could represent 20 percent of all on-road diesel in Brazil, China, India and Europe.
Oil palm, soybeans and rapeseed – all heavy potash users – are well-suited to providing plant oils for use in production of biodiesel. As demand for these crops increases, so will the need for potash and other fertilizers.
India
Although India has almost as much land producing sugar cane as Brazil, it has historically directed a larger percentage of its crop to sugar production. Now, however, high energy prices are leading to a greater share of production being used for ethanol.
The Indian Institute of Petroleum has been conducting experiments using a 10-percent ethanol blend in gasoline and 15-percent ethanol in biodiesel. The government is now looking at extending its ethanol blending program, which will increase production.
European Union
In the European Union, (EU) the supply/demand balance for diesel fuel is very tight and countries are pushing for greater adoption of biodiesel as an attractive transportation fuel alternative.
EU member states are required to achieve a target of averaging 5.7-percent biofuel content in their vehicle fuels by 2010 and 20 percent by 2020. The EU, a net importer of diesel fuel, is expected to fill this requirement mainly with biodiesel production from rapeseed oil and from palm oil imported from Southeast Asia.
Malaysia/Indonesia
Malaysia and Indonesia are the world?s largest palm oil producers and are preparing to use this key crop to fuel power plants and vehicles. The governments in these countries are using incentives to encourage expansion of these industries and this is attracting investment in oil palm plantations and palm oil refineries. Each country has allocated palm oil to future biodiesel production, with the total close to 40 percent of their combined palm oil output.
The Malaysian government has approved licenses for 52 biodiesel plants, raising its annual capacity by more than 5 million tonnes.
Argentina’s corn association announced that the country is on the threshold of an ethanol boom. The association forecasts Argentina’s current 18-million-tonne per year corn production will increase 10 million tonnes by 2012 to meet the projected ethanol export volume of 1 billion gallons per year.
Thailand
Low oil reserves force Thailand to import 90 percent of its oil consumption. This is equivalent to 13 percent of the country’s GDP, making it desperate to reduce its reliance on foreign oil. The Thai government is pursuing a policy of increasing consumption of biodiesel and ethanol produced domestically from cassava. One of its initial steps is to replace the octane-enhancing additive MTBE in gasoline with ethanol, immediately driving its ethanol requirement from an insignificant level in 2003 to 90 million gallons per year by the end of 2006.
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