Biofuels can allow for the democratization of the energy sector

At last month’s G20 summit in New Delhi, one of the key initiatives announced was the creation of a Global Biofuel Alliance, led by Brazil, the US and India, three major producers and consumers of biofuels. The alliance is aimed at facilitating cooperation and intensifying the use of sustainable biofuels, including in the transportation sector. Other nations are expected to join the alliance over the next few months.

Biofuels today meet about 10 percent of the world’s primary energy demand. But its development has been uneven. Three regions — Europe, the US and China — account for close to 90 percent of global production. Thus, the formation of an alliance with all the key stakeholders on board is a welcome development, as biofuels can play a far greater role in the energy transition and in cutting carbon emissions than they do currently.

However, while promoting biofuels, governments and businesses around the world need to be sure that production shifts almost entirely away from foodgrain and vegetable oils, which are currently being used in large quantities. This means producers of biofuels have begun to compete with the human need for food, with disastrous results for food prices, which have been sky-high since the emergence of COVID-19 four years ago. Practically the entire world has been facing record levels of food inflation, which has remained stubbornly high and upset household budgets not just in poor countries in Africa or Asia, but also in the richest European nations.

It is by now well-known that biofuel production is one of the key factors behind this inflation, as governments have mandated oil refiners to blend bioethanol, made from grains, and biodiesel, made from vegetable oils, into vehicle fuel. The typical standard is up to a 10 percent blend, which requires a vast quantity of crops.

There are ample sources of alternative fuel worldwide and they are available in adequate quantities

Ranvir S. Nayar

According to reports, 155 billion liters of biofuels made from different crops were burned last year, using as much foodgrain as it takes to produce some 5 billion loaves of bread. Globally, about 10 percent of all grain gets turned into biofuel. According to data, the calories diverted to biofuel production from current policies and future commitments are equivalent to the annual needs of 1.9 billion people.

Food prices rise not only because of edible crops being diverted for biofuels, but also because large quantities of farmland are being used to grow crops dedicated to biofuel production and these use large amounts of fertilizer, driving up the cost of food production.

But the production of bioenergy need not be at the cost of depriving humans of food. There are ample sources of alternative fuel worldwide and they are available in adequate quantities, along with the appropriate technology to transform them into bioenergy.

For instance, about 20 million tons of dung is produced by cows each day, while about 8 million tons of food is wasted around the world daily. Both of these are proven rich sources of bioenergy. Similarly, at least 6 million tons of organic municipal waste ends up in landfills daily, while there is no reliable estimate of organic waste in terms of post-harvest plant remnants on farmlands or rotting wood in forests or gardens. Every single source cited here can be used as a raw material for biofuel production.

However, there has been very little movement on these and the adoption of such waste as a raw material by biofuel producers remains minimal. Perhaps the only reason for this tepid response is that using these sources would entirely decentralize the production, distribution and consumption of bioenergy, challenging the current models of production, which are dominated by large companies.

The biggest benefit would of course be in taking a crucial and sizable step toward cutting carbon emissions

Ranvir S. Nayar

But the time has come for governments to mandate a total democratization of this fuel and break the shackles of monopoly or oligopoly that the biofuel-producing companies currently enforce. The models exist already. For instance, in China, policies have supported the installation of household-scale digesters in rural areas, with the aim of increasing access to modern energy and clean cooking fuels. These digesters account for about 70 percent of installed biogas capacity in the country.

There is nothing that prevents the rest of the world from following suit. Offering or even selling such digesters to households in developing countries would solve many challenges in one go. It would eliminate the need for the transportation of this waste to a centralized unit and hence would reduce carbon emissions. But even more importantly, it would resolve the issue of waste disposal and hence prevent the diseases caused by rotting waste that often hit people in developing nations.

Moreover, the availability of energy would also have other beneficial effects on people’s lives and livelihoods. It would boost education, which is often hampered by poor electricity connections, as well as promote healthcare and employment, which also currently suffer on account of electricity challenges. By removing large businesses and indeed any external interlocutor, households would become richer as they would significantly reduce their energy bills, if not making them energy surplus, which could also provide a source of income.

The biggest benefit would of course be in taking a crucial and sizable step toward cutting carbon emissions.

Big businesses may be loath to encourage business models that would weaken or even end their stranglehold over the energy sector, but the cause is far bigger than the biggest of the businesses. Governments across the world should not hesitate in steamrolling the objections of corporations to ensure the rapid and effective decentralization of energy. This should be the first and most important mandate of the Global Biofuels Alliance.