Regulation stability will encourage investment in fuel alternatives says BP
Uncertainty around biofuel regulation is likely to have a significant impact on businesses investing in the development of fuel alternatives, says BP Biofuels ceo Phillip New.
Speaking at BP's Fuelling the Future event, Phillip New said that with more stability and certainty around biofuel regulation, investment in alternative fuels will rise.
"Uncertainty [in biofuel regulation], however characterised, tends to suppress investment and therefore suppress the development of alternatives to the current status quo," added New.
Recent reports, including the UK's Department of Environment, Food and Rural Affairs' (DEFRA), have looked at whether or not biofuels contribute to price spikes and volatility in the agricultural markets and that introducing flexibility into biofuels mandates could potentially contribute to a solution.
Responding to the reports Mr New said: "The overwhelming trend of more recent reports is that biofuels are just one of several factors, and by no means the most important factors in driving commodity price spikes and volatility in the market".
"Our fundamental view is that land is not a constraint. There is more than enough arable, capable land. It is rational [however] that if you are wanting to make renewable fuels you try to do this at the lowest cost you can".
He added: "That will tend to deter you from using very valuable food arable land. And so one of the great advantages of the cellulosic grasses we have been developing here is that they grow in parts of the world that have affectively been deserted by traditional food agriculture".
However, despite the questions being raised around biofuel regulation BP continues to work on biotechnology and research, investing around $150m per year.
The company is introducing three advanced biofuels, including one made from purpose-grown energy grasses.
The second is a biofuel that transforms sugars into renewable diesel fuel that performs like conventional diesel and the third is biobutanol, made by the fermentation of plant sugars by a special microorganism.
New said: "We are the only company in the world with the capability to connect expertise from the laboratory to the farm, to the factory and through to the driver".
According to BP, biofuels already make up three per cent of transport fuels used around the world and estimates that biofuels could account for seven per cent of all transport fuels by 2030.