Small-scale biofuel production holds more promise, says USAID

DECENTRALIZED biofuel production, or small-scale factories built on degraded or underused lands, has the potential to provide energy to half a billion people living in poverty in rural Asia.

The report, Biofuels in Asia: An Analysis of Sustainability Options, sponsored by the United States Agency for International Development (USAID) stressed that decentralized production offers a “promising avenue” to enhance the energy independence of Asian nations in a manner that is also commercially viable and without large subsidies.

“Local production and use of biofuels could significantly benefit rural communities by providing access to energy for the millions currently relying on either expensive fossil fuels or traditional biomass for cooking, lighting and transportation needs,” the report noted.

The report argued that large-scale biofuels production could become less viable in view of the global economic crisis. Even under optimistic assumptions of crop expansion and deployment of second-generation technologies, biofuels will meet no more than 3 percent to 14 percent of the total transport fuel demand in Thailand, Vietnam, Malaysia, the Philippines, China, India and Indonesia by 2030.

The USAID noted that biofuels currently supply less than one percent of transport fuel worldwide and approximately three percent in developing Asia.

“Smart incentives are needed to promote sustainable biofuels. The use of mandates and targets has led to a rapid scale-up of production, locking in unsustainable, inefficient practices,” the report said.

“Instead, incentives should target only sustainably produced biofuels, promote best practices, and facilitate development of more efficient second- and third-generation technologies,” the report stressed.

The USAID report encouraged countries going into biofuels production to ensure that producers use nonfood feedstock grown on underutilized land. Biofuels producers must also avoid converting forests and peatlands at all costs and to plant instead on degraded or underutilized lands using high-yielding feedstock that require minimal inputs.

Also, the report noted that “positive social impacts” are not a guaranteed outcome of the large-scale deployment of biofuels.

“There is widespread evidence across Asia that the development of biofuels can perpetuate poor labor rights and working conditions, threaten lands used by indigenous and marginalized communities, and precipitate local conflicts over resources,” it said.

Compared with large-scale biofuels production, small-scale biofuels production for local use may deliver greater social benefits, including improvement of rural livelihoods, support of local industries, and a lower tendency toward exploitation of workers and co-opting of land from indigenous peoples.

The report was presented by Pradeep Tharakan, one of its authors, at the Asia Clean Energy Forum held at the Asian Development Bank in Ortigas City late last week.

The report focused on China, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam. It analyzed key trends and concerns and highlighted sustainability options for biofuel production.

The Philippines is encouraging foreign investors to go into biofuels production. Just recently, two Korean companies signed agreements with the Philippine government for the construction of biofuel plants and development of idle lands for feedstock.

Environment Plasma Co. Ltd. and Eco Solutions Co. Ltd. have agreed to invest $600 million for the construction of biofuel plants and development of lands for sugarcane and jatropha.

The Philippines is keen on producing more biofuel in view of Republic Act 9367 or the Biofuels Act of 2006. The law mandates the blending of 1 percent locally-sourced biodiesel in all diesel products sold by May 2007, and 5 percent locally-sourced bioethanol blend in all gasoline products this year, and 10 percent bioethanol in 2011.

source:http://businessmirror.com.ph/home/sports/12004-small-scale-biofuel-production-holds-more-promise-says-usaid.html