Assessing the sustainability of liquid biofuels from evolving technologies: A Finnish approach

The use of biofuels in transportation is increasing and promoted in many areas with the aims of reducing greenhouse gas emissions in the transport sector, securing the energy supply, and improving the self-sufficiency and employment. However, a number of recent studies have concluded that large-scale production of biofuels may cause significant environmental and social problems. Firstly, greenhouse benefits from substituting fossil fuels with biofuels may be questionable due to auxiliary material and energy inputs required, direct land-use impacts and, in particular, due to indirect system impacts e.g. land-use changes leading to deforestation. Secondly, other environmental impacts, such as nutrient losses, toxic emissions, and biodiversity losses, may also be significant and are not well known, in particular those related to technologies still under development. Thirdly, production of biofuels from raw materials that also are, suitable for food production, have been found to increase food prices, thus causing social problems. Consequently, research on and development of biofuels is more and more focusing on raw materials not directly competing with food production. In addition, a number of initiatives on sustainability criteria for biofuels have been announced by various institutions, with the aim of ensuring that the production of biofuels does not cause serious harm to the environment and society. A sustainability assessment is an extremely complicated and challenging task due to the lack of a unique, objective, and commonly agreed methodology, even though life cycle assessment (LCA) provides a generally accepted methodological background. The definitions of system boundary and reference scenario and other assumptions will have a significant impact on the results. In addition, the sustainability criteria included in different approaches and studies vary, which makes the comparison of the results difficult. This report presents perspectives on varying challenges and problems that are encountered when assessing the sustainability of biofuels in general. The report aims to identify the most critical factors of different environmental implications that are caused by increased production and use of biofuels. The main uncertainties and sensitivities associated with the assessment task are discussed and suggestions for further research needs are provided. The technological focus is on evolving technologies of highest interest from the Finnish point of view, that are the production of FT diesel from forest residues, production of NExBTL diesel from palm oil and tallow, and bioethanol production based on domestic lignocellulosic raw materials. Critical sustainability aspects of imported Brazilian bioethanol made from sugar cane are also addressed. The report also provides a brief summary and assessment of sustainability criteria relevant for biofuels that have been proposed by various organisations, institutions, and countries. Finally, the implications of three different biofuel scenarios on the Finnish economy are briefly assessed. The most critical factors with regard to environmental impacts of production and use of biofuels were noted to be site-specific features, direct soil implications through cultivation or harvesting of raw materials, identification, quantification and allocation of indirect impacts through market mechanisms, substitution credits from the use of co-products and biofuels, and lack of data concerning technologies still under development. In addition, indicators used to measure greenhouse or other environmental impacts may have a significant impact on the results and thus need to be carefully considered in order to avoid the drawing of misleading conclusions. According to macro-economic scenario analysis, the increased use of biofuels has the effect of raising both consumer prices and costs of production. Consequently, it tends to drive down consumption and production in most sectors of the economy, and also makes investment less attractive. While the effects of increased domestic biofuel production are slightly negative at the level of the whole economy, the increased demand for crops and wood obviously increase activity in agriculture and in particular, in forestry. Further research work is certainly required in various areas and dimensions related to the sustainability of biofuels. Topics that should be further elaborated include e.g. the assessment procedure of sustainability, case studies of current and new technologies and raw materials, uncertainties related to these, site-specificity and perceived harmful effects. More data and knowledge is also required for socio-economic dimension of sustainability and economic implications of biofuels towards a specific reference scenario. The need for case-specific and more comprehensive analysis with different perspectives and indicators is obvious. Both micro-level bottom-up and macro-level top-down analyses are required to ensure that biomass use is as sustainable as possible with regard to its various dimensions.