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Biofuels - The Fuels of the Future

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Written by Stan Wendzel MBA, CPA, LEED AP   

Fuel is known as a substance used for generating energy. Biofuels are types of fuels created from biomass. Biomass is essentially stored solar energy. Compared to most other fuels, the main feature of biofuels is that energy produced through these sources can be recycled time and again – i.e. renewable. This characteristic of biofuels makes them different from other energy sources commonly used today such as nuclear fuels, coal, and petroleum. Another advantage favoring biofuels is that they are biodegradable and thus do not cause harm to the environment. Given these characteristics, and the oil price increases of the recent past, it’s no wonder why there is so much talk today about biofuels.

Types of Biofuels

The following are considered the main types of biofuels:1

  • Biologically Produced Alcohols: Alcohols like ethanol, methanol, propanol, and butanol, which are produced through biomass, are considered good sources of biofuels.
  • Biologically Produced Gases: Biogas, gas produced by organic materials’ anaerobic digestion process, like biodegradable waste, or gas produced with the help of energy crops is also another source of biofuels.2
  • Biologically Produced Oils: Usually biologically produced oils are used to run diesel engines. Straight Vegetable Oil (SVO), Waste Vegetable Oil (WVO) and oils obtained from animal fats are some of the examples of biologically produced oils.

Various Uses of Biofuels

Biofuels can be used for generating centralized as well as decentralized heat , electricity, and energy. Surprisingly, about 15% of total current energy consumption worldwide is met through biofuels generated energy – primarily in developing countries. Globally, biofuels are used for the following purposes:

  • Cooking and heating (residential): Biofuels are used in homes primarily for cooking and heating purposes. Fuels used in daily life such as charcoal, dried dung, and wood are examples of biofuels.
  • Generating electricity: Methane, which is the main constituent of Biogas, can pass directly through gas engines and be converted into electricity. Electricity generated through biofuels can be used either on a local scale or for commercial purposes.
  • Agricultural uses: Use of biofuels is a dominant factor in agricultural farms in countries like Germany. The German government has set up a goal of using entire farms solely for the production of bio-energy and biofuels.3
  • Fuel additives: Ethanol and biodiesel are widely used in Brazil, the EU and the U.S. as an additive to fuel for transportation. In fact, in the U.S. use as a fuel additive is the number one use of biofuels and growing rapidly. Biofuels blends range anywhere from 2% to 95% depending on fuel type and region.

History of Biofuels

Use of biofuels, especially for cars, has been in vogue since the early days of the automotive industry. Nikolaus August Otto and Rudolf Diesel4 were the first to introduce the use of biofuels in the combustion engine and diesel engine, respectively. Otto was first to use ethanol to run the combustion engine while Diesel used peanut oil to run diesel engines. There were many cars, like the Ford Model T, which ran on biofuels (ethanol) during 1903 to 1926. However, following the introduction of oil drilling technology in the middle of the century the prices of crude oil came down dramatically. Thus began the era when cars started running on hydrocarbon based oils instead of biofuels. Despite this “oil era,” there were countries like Germany where alternatives to oil were still considered, such as gasoline alcohol. This gasoline with alcohol was used in cars and was extracted from potatoes. During the same period, Discol, a blend of petrol with grain alcohol was used in the Britain.

It was during the post World War II period that biofuels were replaced by petroleum oil as oil from the Middle East became available at a lower cost compared to biofuels.

The need to develop more and more sources of biofuels was once again felt during the early 1970’s, largely owing to shortages and high prices of oil. Many governments increased their interest in developing biofuels to overcome this situation. However, the interest in developing biofuels sources did not last long as oil was once again available at cheaper prices after 1986.

The importance of biofuels sources again gained momentum after the year 2000. This time the prime factor of high prices of oil was accompanied with certain other concerns like global warming, a potential peak in oil production, and instability of the major producers of oil in the Middle East. Since that time many governments have taken positions advocating development of biofuels as an alternative to oil.

Fuel of the Future?

It is important to assess biofuels on the basis of future trends and needs. While it is widely accepted that predicting specific future energy needs is very difficult, predicting general future trends is both feasible and helpful, as it allows us to more effectively plan for the long-term impacts of those trends. The following trends emphasize why biofuels will play a dramatically increasing role in our energy future.

  • Increasing demand of oil: It is believed that the increasing population and rise in living standards will lead to shortages of oil due to higher demand. World demand for oil is expected to grow by 54 percent in the first 25 years of the 21st century, according to the Energy Information Agency of the U.S. government. To meet this demand countries have to pump an additional 44 million barrels of oil each day by 2025.5 In such a scenario, the oil producing countries will not be able to meet this increased demand. Likewise, there are a number of studies which suggest that many of the world’s oil resources may have reached their peak. In short, the increasing demand will simply not be met by a commensurate increase in oil sources.6
  • Global Warming: Scientists are cautioning the world nearly everyday about the potential of global warming. While consequences of global warming cannot be predicted with any assurance, some scientists speculate that global warming will lead to calamities like floods and droughts, gale winds, a rise in sea-levels and extreme weather conditions. Some speculate it may even exacerbate other hazards like volcanic eruptions and earthquakes. Whether or not you believe global warming is caused by man or even occurring at all, most everyone agrees climactic changes are occurring. Under such conditions it becomes more and more difficult to justify extensive exploration for new resources of oil and easier to justify investments in alternatives like biofuels.
  • Human produced calamities: Terrorism is on increase worldwide. Though it may not have a major affect on the oil production currently, in the long term the developed world’s increasingly high reliance on oil becomes a major vulnerability and emphasizes the need for alternatives. For example, the terrorist attacks on the oil wells in Saudi Arabia on 24 February 2006, ultimately affected oil production and led to a temporary hike in oil prices.7 It would be reasonable to assume larger scale disruptions might occur in the future.
  • Limited Alternatives to Petroleum Oil: The current choices of alternatives to petroleum oil are limited. They include electricity, Liquefied Petroleum Gas or propane (LPG), Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG), hydrogen, and P-Series Fuels in addition to the biofuels - Ethanol, biodiesel, and Methanol.8

Of these alternatives only electricity and biofuels be quickly incorporated in new models of automobiles, and only ethanol and biodiesel can utilize existing fuel station infrastructure. The remaining alternatives to oil are either years away from becoming technically viable or currently not close to being economically competitive.

Considering the above trends the importance of developing biofuels sources as an alternative to oil can be appreciated. While no current fuel alternative is perfect, it is critical that we rapidly develop the most viable alternatives in order to reduce our overly risky reliance on petroleum oil. Biofuels, with their proven current production technologies, cost competitiveness, and ability to utilize existing automotive and fueling-station infrastructure, appear to be the most viable alternative currently. Proper planning and implementation of biofuels programs today will help assure us a secured energy tomorrow. In the future, when the world faces the almost inevitable shortages of petroleum oil, biofuels will be the best alternative – the Fuels of the Future.

End Notes:

1Wikipedia – definition of biofuel (
2Wikipedia – definition of biodegradable waste (
3CRS Report for Congress March 16, 2006 - European Union Biofuels Policy and Agriculture: An Overview
4Wikipedia – definition of Rudolf Diesel (
5CBS News April 28, 2005 (
7BBC News February 24, 2006 (
8U.S. Department of Energy – Alternative Fuels Data Center (


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