Luc Pelkmans

Developments in International Liquid Biofuel Trade

This chapter describes the past developments, current status, and trends in global liquid biofuel production and trade. Apart from providing quantitative overviews, it also elaborates why markets developed as they did. By 2011, close to 2,500 PJ of liquid biofuels were produced globally; over two-third of which were fuel ethanol and the remaining biodiesel. The feedstock base is exclusively regionally specific oil, sugar, or starch crops. Global trade in biodiesel has been and will in the foreseeable future be primarily driven towards the European Union, where renewable energy policies stimulate the consumption of sustainable transport fuels – although the EU biofuels market growth is slowing down. Fuel ethanol is largely produced and consumed in the Americas, with the USA and Brazil dominating global production, trade and deployment. International trade is both supply and demand driven. National support policies increased the domestic market value of biofuels and shaped demand side developments. Trade flows emerged where such policies were not aligned with respective trade measures. Import duties had the strongest effect on trade volumes while trade routes were influenced by tariff preferences. Most trade regimes appear to have been designed and adapted unilaterally along national interests causing market disruptions, trade inefficiencies and disputes.

The Role of Sustainability Requirements in International Bioenergy Markets

As the main driver for bioenergy is to enable society to transform to more sustainable fuel and energy production systems, it is important to safeguard that bioenergy deployment happens within certain sustainability constraints. There is currently a high number of initiatives, including binding regulations and several voluntary sustainability standards for biomass, bioenergy and/or biofuels. Within IEA Bioenergy studies were performed to monitor the actual implementation process of sustainability regulations and certification, evaluate how stakeholders are affected and envisage the anticipated impact on worldwide markets and trade. On the basis of these studies, recommendations were made on how sustainability requirements could actually support further bioenergy deployment. Markets would gain from more harmonization and cross-compliance. A common language is needed as ‘sustainability’ of biomass involves different policy arenas and legal settings. Policy pathways should be clear and predictable, and future revisions of sustainability requirements should be open and transparent. Sustainability assurance systems (both through binding regulations and voluntary certification) should take into account how markets work, in relation to different biomass applications (avoiding discrimination among end-uses and users). It should also take into account the way investment decisions are taken, administrative requirements for smallholders, and the position of developing countries.

Towards the Development of a European Bioenergy Trade Strategy for 2020 and Beyond (BioTrade2020plus Project)

In Europe the demand of biomass for the whole bioeconomy is increasing year by year. In some cases, this biomass come from non-European countries. The EU is already a net importer of biomass for bioenergy and imports could be even more relevant in the near future. Therefore, it is important to guarantee that this biomass supply from outside the EU is being done in a sustainable way and that negative environmental and socio-economic impacts are minimised. The project BioTrade2020plus has the aim of providing guidelines for the development of a European Bioenergy Trade Strategy for 2020 and beyond. It has analyzed in depth the role of lignocellulosic biomass (woody resources, agricultural residues and cellulosic crops) imports from six selected sourcing regions: North America (Southeast United States), South America (Brazil, Colombia), East Europe (Ukraine), Southeast Asia (Indonesia) and East Africa (Kenya). It has considered availability and sustainability constrains as well as existing strategies in these sourcing regions. All this info is being integrated in an interactive tool available on the BioTrade2020plus webpage.