The forgotten implications of low oil prices on biofuels. (27th April 2017)

• Record Type: Journal Article
• Authors: Reboredo, Fernando Henrique; Lidon, Fernando Cebola; Ramalho, José Cochicho; Pessoa, Maria Fernanda
• Is Part Of: Biofuels, bioproducts and biorefining. Volume 11:Number 4(2017)
• Page Start: 625
• Page End: 632
• Publication Date: 2017-04-27
• Subjects: biofuels -- cellulosic ethanol -- oil prices -- price competitiveness; Biomass energy -- Periodicals; Biological products -- Periodicals; Fuel -- Refining -- Periodicals; 662.8805
• DOI: 10.1002/bbb.1769
• Languages: English
• ISSNs: 1932-104X

Abstract

Abstract: The sudden drop of oil prices since mid‐2014 has echoed in the news due to implications at national and international levels. For unknown reasons, the effects of quasi permanent low oil prices on biofuels were ignored. With current oil prices, biofuels are not competitive with gasoline, thus the blend wall of regular cars will not rise as soon as expected, and the ethanol's market saturation and the high prices of capital and operational costs are factors that do not contribute to boost consumption. Objections to biofuels subsidies, as well as arguments against the rise of food prices as a consequence of biofuel production from feed crops instead of agricultural and forestry wastes, will become more valid than ever. However, to fulfil biofuel policies regarding energy independence and decarbonization, and in the face of the failure of important advanced biofuel projects, huge public expenditures (incentives/subsidies), extended biofuel mandates, improvement in biofuel technologies, and security for investments through coherent and stable policies are needed. Furthermore, it is advisable to maintain a sustainable conventional biofuel industry to facilitate the transition to advanced biofuels. Citizens must be aware of the indirect costs of fossil fuels (coal mining, pollution, and energy security) and realize that the deployment of biofuels is both a question of opportunity and a challenge. The devastating effect of low oil prices on biofuels and on unconventional oil's exploitation and the constraints to biofuel developments, are still in the horizon, especially when OPEC will no longer act as the swing oil producer. © 2017 Society of Chemical Industry and John Wiley & Sons, Ltd