Biofuels in New Zealand – A Solution or a Problem?

This is a guest post by David K. David worked in the oil industry for many years in the Middle East, Europe, Asia and New Zealand.

Legislation to mandate biofuel percentages in New Zealand’s petrol and diesel is going through parliament and will become law in the near future. The intention is undoubtedly well meaning, but I believe it is misguided. At best it will have little impact on climate change. At worst it will be strongly negative, especially in New Zealand.

Introduction

At first sight, biofuels seem an elegant response to climate change. The thinking is – plants and trees absorb Carbon Dioxide (CO₂) from the atmosphere and convert it to biomass. If the plant can be converted to a burnable fuel, then the CO₂ emitted back to the atmosphere balances and no net CO₂ is produced.

In practice, fossil fuels are the result of millions of years of solar, biological and geological energy accumulation. The central problem is that we have become reliant on using high levels of this accumulated energy; we’re using capital as if it is income. There should be no surprise that multiple problems arise when we attempt to replace fossil fuel with energy produced annually from solar energy by plants. A biofuels strategy works only if:

• The CO₂ emitted in growing the plant and gathering, producing, transporting and burning the biofuel is less than emitted using the equivalent fossil fuel.
• Biofuel production has no serious environmental consequences on land use for food production, loss of forest cover and cost of food.
• More broadly, biofuel use does not slow the necessary societal behavioural changes such as shifts to public and active mode transport and less carbon intensive food production, nor slow the change to more effective technological solutions such as transport electrification.

The government briefing papers show awareness of some of these problems and propose mitigation steps for several. There is good reason to believe, however, that the proposed mitigation will be largely ineffective in real world scenarios.

Background and Basics

For land transport fuels, biofuel is usually used as a 5 to 15% “drop in” component with conventional fossil fuels. The maximum limit avoids motor running problems or more serious damage.

The volume of biofuel required for a mandate is considerable. At present there are only two sources of biofuel available on the industrial scale necessary to replace part of our national fuel pool:

• Bioethanol added to petrol. Bioethanol at scale is produced by fermenting corn or corn waste (notably in USA), sugarcane (e.g. in Brazil) or wheat and sugar beet (in the European Union).
• A range of edible oils added to diesel. By far the most common, and the only one produced without large subsidies, is edible palm oil. Other sources include various edible vegetable oils and tallow from animal hides. All of them require chemical treatment (esterification and sometimes hydrotreating) to avoid damaging the motors, except in niche climate/use situations.

Both these biofuel sources are “first generation”, i.e. they have alternative uses as food. They are therefore very contentious.  Organizations such as Greenpeace Europe and Friends of the Earth are strongly opposed to biofuels, from both food and deforestation perspectives.

Research funding has been poured into “second, third and fourth generation” non-food grade sources of transport biofuel such as algae, wood derived lignin/cellulose fermentation, recycling of used edible oils and many others. But to date none are technically or commercially viable at the scale required.

Europeans are trying to shift from food based to “waste based” biofuels – mainly used cooking oil sourced from China. Available volumes are too small and there are concerns over fraudulent certification.

Difficulties

Difficulty Number 1: Most Biofuels Have Higher Emissions Than Fossil Fuels

The CO₂ emitted during biofuel production is never zero. The emissions depend on the specific growing/gathering/production and transport chain but are significant. Reasonable yields usually require high carbon footprint artificial fertilizers. For first generation biofuels, the emissions just from the change in land use alone can exceed those from the equivalent fossil fuel.

In most cases, once the production, fertilizer and transport emissions are added, the total biofuel emissions are significantly worse than the fossil fuel alternative.

As one example, in the New Zealand market Indonesian and Malaysian palm oil is the most likely diesel biofuel component. The palm oil comes from the palm seed kernels which are usually processed on the plantation. The oil is delivered by diesel truck to the blending point at an oil refinery or shipped to New Zealand for blending at import terminals. Approximately every seven years, kernel production drops off and the tree is cut down and burned. For those living in Malaysia, Singapore or Indonesia, the entire region is blanketed with smoke for approximately six weeks every dry season. The net CO₂ emissions from those two country plantations are estimated at a little under 1% of global greenhouse gas emissions and are net negative when used as a biofuel. The health impacts from particulates are enormous, particularly on children and the elderly.

Over the last thirty years in these two countries approximately 19 million hectares of mostly virgin rain forest has been cleared for plantations and continues to be cleared in western New Guinea and Borneo. For comparison, New Zealand’s total area is about 27 million hectares.

On a personal note, having lived many years in these areas, I have witnessed extensive, large scale clear felling of rainforest for palm oil. The annual dry season smoke stops outdoor activities, forces school closures and at worst is like living in a chimney.

Difficulty Number 2: Biofuels Compete for Arable Land

When an arable crop is diverted to a biofuel, it has two effects; the resulting shortage of food puts the price up, and the land is not available for growing other crops. Even the “waste crops” now being promoted for biofuels are still potentially food for an animal or another part of the agricultural cycle.

All the European and USA biofuels have these side effects. As one example, North American bioethanol is produced from corn starch. After successful lobbying for subsidies in the early 2000s, farmers began using not just the corn stalks after harvesting, but the whole plant for bioethanol.

This resulted in a shortfall in corn supply and a dramatic price increase in central America where it is a staple food. Despite lobbying from many groups, these subsidies remain largely in place and the USA is the world’s largest producer of (highly subsidized) biofuel. At present, the only large-scale, non-food biofuel crop is the jatropha plant grown mostly in India. However the land used for this has been diverted from food production. The jatropha plant is resistant to herbicides so can easily become a wilding pest.

Difficulty Number 3: Non-Food Biofuels are Not Available at Scale

Some second and third generation biofuels are available, but in small volumes. Examples in New Zealand are bioethanol from diary whey, recycling used edible oils (such as the local fish and chip shop) and digesting pine forest slash. All are possible. However for a mandate of say 10%, approximately 700 million litres of biofuel are required each year. Dairy whey volumes are around 40 million litres and have an existing market.

Tallow can be processed into a biofuel and Z Energy has even built a plant in Auckland. However New Zealand tallow comes from cow hide processing and is edible grade. It commands a high price as a component of products like soaps, lipstick and makeup, making the tallow plant completely uneconomic without very large subsidies.

Difficulty Number 4: Plants Are an Inefficient Way to Make Energy

Plants are the right way to make food, but are simply not very good at converting sunlight into energy to power transport.

Diesel cars running pure palm oil convert just 0.09% of sunlight energy to movement. Ethanol in petrol efficiencies are similar. In contrast, solar panels running electric cars convert around 7%. Therefore, solar panels need less land: up to 7/0.09 = 77 times less. At the same time, the space underneath is useful for crops and livestock.

There is no fix for this. Plants will never be a good way to make energy, and growing energy will never become an efficient use of land.

Difficulty Number 5: Biofuels Mask the Need for Real Action

In my mind this is the biggie. A biofuel mandate in New Zealand maintains the status quo where people drive large, mostly fossil fuel powered cars and avoids any hard political or personal decisions about modifying behaviors.

As an example; a busy person can still drive around in a large car, but feel good about protecting the environment. In the climate friendly version, the person walks, bikes, uses public transport or drives a much smaller car – preferably electric or hybrid. The truly climate friendly change we all need to make is to drive less and to walk, cycle and use public transport more. Biofuels will defer the necessary mode shift, contribute to car congestion and divert money away from the infrastructure required to make walking/biking possible.

Difficulty Number 6: The Subsidies to Biofuel Lobby Groups

There are strong lobby groups who benefit from generous production subsidies and New Zealand runs the risk of establishing them here. From the beginning biofuels have been about profits rather than saving the planet.

New Zealand can look to Europe, where more focus has been given to developing sound mitigation strategies. Europe has banned edible oils in biofuels and has a certification system to avoid the use of food crops and clear felling.

To date these measures have not been effective. Reports published this year show European biofuels are still mostly rape seed and other edible oils, and raise concerns over fraudulent certification of “waste” oils. The Ukraine war is constraining supply, triggering further food price increases and debates over relaxing the mandates.

There is no reason New Zealand should expect to have more success: the volume of non-food grade biofuel is simply not enough to supply mandated demand, and the certification is easily defrauded in the producing countries.

Biofuels in New Zealand

The push for biofuels in New Zealand comes from the Climate Change Commission pathway assuming biofuels can reduce emissions in the short term, pending more significant initiatives. The CCC’s assumptions around biofuels seem to ignore impacts outside our territorial limits. The government briefing papers, on the other hand, propose solutions to some of the difficulties listed above, based on the EU sustainability model:

• The biofuel carbon balance must be provided to account for CO₂ in the various growing, gathering, processing and transport steps.
• Biofuel is certificated as not coming from a food grade oil, causing deforestation, using excessive water and having appropriate land use.

In practice, as the EU is demonstrating, the only currently available sources of biofuel imports at the scale required, are food grade crops, mostly with severe or very negative climate impacts. The oil companies will be faced with the prospect of either not filling the mandates, or accepting fuels with suspect certification.

It is also worth noting that all biofuels are more expensive than fossil fuels so a mandate will result in a fuel price increase, but without any corresponding climate benefit.

The Way Forward

New Zealand should not ignore the European Union’s ongoing difficulties with sourcing ethically sound, non-food based biofuels. We need to “follow the science” to find more effective strategies.

The urgency and magnitude of climate change means we need to direct our focus, effort and money to actions with a quick, direct and positive climate impact. Will few exceptions, biofuels don’t qualify. (There may be a place for local biofuel production in specific locations with short transport links and where the carbon footprint is indeed better than the fossil fuel alternative.)

Examples of initiatives that are climate positive, and which should be receiving the government’s focus, include incentives to increase the renewable percentage of power generation, electrification of vehicle fleets and building safe infrastructure for walking and cycling.

A few links of interest

Report on Unsustainability of EU Directed Biofuels: https://www.transportenvironment.org/wp-content/uploads/2021/06/2020_05_REDII_and_advanced_biofuels_briefing.pdf

Reuters on EU biofuel and palm oil: https://www.reuters.com/markets/commodities/eu-sees-biofuel-consumption-fall-by-2031-palm-oil-imports-slump-2021-12-09/

The Guardian on Biofuel impacts: https://www.theguardian.com/commentisfree/2022/jun/30/crops-cars-starving-biofuels-climate-sustainable

EECA Biofuel Report: https://www.eeca.govt.nz/insights/eeca-insights/liquid-biofuels-insights-summary/

Europe’s Concerns over biofuel certification fraud: https://www.euractiv.com/section/biofuels/news/meps-push-european-commission-to-reveal-used-cooking-oil-origins/

Newsroom on the consequences of NZ’s biofuel mandate: https://www.newsroom.co.nz/biofuel-mandate-runs-up-against-unintended-consequences

David K is part of advocacy group Don’t Burn Our Future, which is launching a campaign to stop the NZ biofuels directive from being implemented. Follow them on FB at https://www.facebook.com/Dont-Burn-Our-Future-Stop-the-NZ-Biofuels-Obligation-104051469044864

Share this