Big oil companies in Europe including BP and Royal Dutch Shell have cut back on biofuel research, which will slow efforts to find a sustainable alternative to gasoline that does not involve food-based supply, Fuel Fix reports.
BP and Shell have stopped funding four different projects because they say the technology to generate fuel from woody plants and waste will not be economically viable until 2020 or later.
This funding cut brought biofuel investments from a high of $7.6 billion in the last quarter of 2007 to a low of $57 million for the first quarter of this year — the lowest it has been since 2006. Such reductions will make it unlikely that the US and the EU will meet their targets to wean people off of gasoline any time soon, Fuel Fix says.
The International Energy Agency says biofuels must supply 27 percent of the fuel for vehicles by 2050 so the US and EU can meet climate change targets. So far, most of the 1.9 million barrels of biofuel produced daily comes from corn or sugar, which in turn has pushed corn prices up and led to food-versus-fuel worries that this will take away food supplies from the poor.
Research into next-generation biofuels may open up opportunities to tap non-food sources like jatropha, switch grass and corn stalks, and waste sources like paper. But BP and Shell, both considered among the most open to alternative fuels, scuttled their programs because they found their technologies could not be scaled up to commercial production levels in an economical manner.
However, BP says it will continue to work with DuPont on biobutanol and has jointly opened a $520 million wheat-to-ethanol plant in the UK.
In a parallel situation in the US, Exxon and Chevron have also cut back on biofuel spending. Chevron explored 100 feedstocks for viability before it shelved plans, while Exxon invested $100 million on algae but could not find a commercially viable solution, Fuel Fix reports.
Global biofuels output last year fell for the first time since 2000 due to weakness in the US, BP reported last month.
In May, the EPA proposed changes to the Renewable Fuel Standard program that include new renewable fuel pathways aimed at enhancing the ability of the biofuels industry to supply advanced biofuels, including cellulosic biofuels, to the market.
Cellulosic biofuels will likely remain well below targets set by the Energy Independence and Security Act of 2007, according to a February statement by the US Energy Information Administration.