Can Africa, India and Asia Relieve the EU’s Biofuel Famine?
D1 Oils, a new bio diesel company, certainly thinks so. Rather than rely on subsidised rapeseed and sunflower oil to meet the EU’s rapidly growing demand for biodiesel, D1 says the fuel should be sourced from the developing world. This will mean low carbon transport for the EU and jobs in the developing world’s agricultural sectors currently unable to sell to the EU because of tariffs. Sounds too good to be true? D1’s chairman, Karl Watkin, sets out his case.
Over the past 20 years or so the world’s attention has been regularly directed to the problems of global poverty, particularly in Africa where severe famine regularly causes millions of unnecessary deaths. To our shame, efforts to promote rural development in Africa and elsewhere have been piecemeal. At the same time, governments around the world, particularly in the EU, have compounded the problem by continuing to protect their own farmers at the expense of the agricultural industries that could provide employment, reduce poverty and promote growth in the developing world.
Energy crops from the developing world
Yet the developing world can grow crops that could meet our growing need for carbon neutral biofuels. Rudolph Diesel’s first engine, developed a century ago, ran on peanut oil. However, his discovery of the potential of getting biofuels from crops, which might prove to be his greatest legacy to mankind, was overlooked by the hydrocarbon economy of the twentieth century. Now, as a result of new environmental and security concerns, biofuel is back on the agenda and the EU is responding.
The EU Biofuels Directive targets a minimum level of biofuels, as a proportion of fuels sold, of 2% by 2005, 5.75% by 2010 and 20% by 2020. The directive will effectively create a demand of 14 million tonnes of biofuels by 2010, of which the European Commission expects biodiesel to represent 7.8 million tonnes. However, thanks to the distorted economics of the Common Agricultural Policy (CAP), the immediate preferred solution out of Brussels has been short-term duty reduction to encourage even greater production of already over-subsidised rapeseed within the EU.
The EU currently has over three million hectares of agricultural land under rapeseed cultivation, an area approximately the size of Belgium. Some 80% of the rapeseed produced goes to foodstuffs and some 20% for oil that can become biofuel. Assuming this amount of land yields about ten million tonnes of rapeseed, of which two million would be available for biodiesel, the EU is going to have to put a great deal more land over to rapeseed in order to meet the EU’s own target of 7.8 million tonnes for biofuel by 2010. Unfortunately rapeseed cannot be grown continuously on land as it tires the soil and is only suitable for gap cropping. Even if the production of rapeseed for other purposes stay constant, which is most unlikely, the rapeseed acreage for biofuels will have to increase four or fivefold, the equivalent of putting another area the size of Belgium under a yellow blanket of rapeseed! The impact of this is far more serious than an increase in suffering for hay fever victims. More rapeseed means greater soil degradation, fewer opportunities to grow prime food or organic crops, and much more use of fossil-fuel based fertilisers. Rapeseed is neither environmentally friendly nor carbon-neutral.
Low carbon transport for the EU
Given these issues, surely it makes more sense to turn to the developing world, whose huge agricultural sectors are currently emasculated by EU trade barriers, to grow biofuel crops. Our team at D1 Oils has identified a range of ‘non-food’ grade energy crops that can provide a low-cost, sustainable supply of biodiesel feedstock. None of these crops can be grown economically in the EU, but in warmer climates they can produce enough feedstock to meet Europe’s biofuel needs, as well as the needs of growing transport sectors in the developing world.
The jatropha tree bears energy fruit
The seeds of the jatropha tree for example, which we consider the biofuel crop with the most potential, have physical and chemical properties, once processed, that are comparable to fossil diesel. Jatropha seeds have a high oil yield of up to 40% and also produce profitable by-products like glycerine for cosmetics and seed cake for fertilizer and possibly animal feed. Jatropha is easy to establish, quick growing, hardy, and drought-tolerant. It can be grown all over the developing world, but the most attractive planting locations are South Africa, West Africa and India. We have also identified coconut oil from the Philippines and other crops from Ivory Coast as promising sources of biodiesel feedstock for the European market, and contracts are in place to deliver Philippines biodiesel to Japan.
A core element of D1’s strategy is that its plantations are established in areas considered to be amongst the poorest in the world. Jatropha is ideal for the waste, marginal, arid, and semi-arid areas which abound in the world’s poorest economies, as well as for hedging, boundaries and roadside planting. In addition, D1 has discovered ways of growing new jatropha plantations on semi-desert land using wastewater, offering the further potential benefit of arresting desertification.
There are enormous environmental and economic benefits to be gained by the developing world should it become a source of feedstock for the demand for biodiesel in Europe. The planting of millions of jatropha and other oil-bearing trees, the harvesting of the seeds and the crushing and refining processes will generate millions of man and woman hours across the developing world. The primary beneficiaries will be the rural poor.
Oil for local development too
However, the benefit will not only come in jobs. There has often been a painful trade off in the developing world, with economic growth coming at the expense of the environment. However, the production of biodiesel will enable developing economies to source their own fuel supplies from locally grown crops, enabling them to get the benefits of economic growth without the usual side effects of pollution and the need to import fossil fuels that must be paid for with scarce foreign exchange. To this end, D1 has developed a modular transportable refinery for producing biodiesel from various feedstocks. The refinery produces minimal emissions, uses virtually no water, and can be powered in remote locations by its own biodiesel. D1’s partnership with the Philippine Coconut Authority, for example, will not only produce coconut oil feedstock to supply the Japanese market, but also assist the government of the Philippines to introduce a 1%-2% blend of coconut biodiesel for the transport industry.
D1 is committed to delivering this solution, but the EU could assist the process by dropping their obsession with rapeseed as the only solution.
The solution to the EU’s shortfall in the supply of biodiesel does not lie in creating vast carpets of rapeseed throughout Europe. Crops like the jatropha tree can not only meet Europe’s demand for bio-diesel, but also enable the developing world to create agricultural jobs, earn foreign exchange and provide for its own biofuel needs.