Biofuels: Potential, Applications, and Challenges

Brought to you by Ruella Menezes , Kline + Company, Energy Director.

As the world urgently searches for sustainable energy solutions, biofuels have emerged as a promising contender. But are they merely a low-hanging fruit offering limited benefits, or can they truly drive industrial decarbonization? Our latest blog explores the immense potential of biofuels, highlighting their diverse applications and the challenges they face.

Understanding Biofuels

Biofuels are renewable energy sources derived from biological feedstocks like corn, algae, and organic waste. These sources help offset carbon emissions through their growth cycle, resulting in a lower carbon footprint compared to traditional fuels. There's growing interest in second-generation feedstocks, such as animal fats and used cooking oil (UCO), which offer even lower carbon intensity and are becoming the new standard for biofuel production.

Expanding Applications

Biofuels are no longer confined to automotive uses; they are emerging as solutions for various hard-to-abate sectors:

- Renewable Diesel: Hydrotreated vegetable oil (HVO) is gaining traction in aviation and marine applications.

- Alcohol-to-Jet Technology: This innovative process converts ethanol into jet fuel, offering a greener alternative for the aviation sector.

- Industrial Uses: Companies like Bharat Aluminium Company Limited (BALCO) are using biodiesel for smelter operations, showcasing biofuels' versatility.

Overcoming Challenges

A major hurdle for biofuels is feedstock availability. The growing demand for bio-based fuels raises concerns about the sufficiency and sourcing of feedstocks. Currently, over 70% of biodiesel feedstock comes from first-generation sources like palm oil, which competes with food production and poses ethical concerns. Second-generation feedstocks, such as used cooking oil, are limited in supply and subject to potential export restrictions.

So, what’s the solution? [Read more to find out. ]

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This is part of Kline's Green Value Compass series. Discover how to unlock the commercial value of sustainable investments