The use of biofuels has grown over recent years, but until now it has remained a niche area of energy amid the continuing dominance of fossil fuels. However, a new report may indicate that this is about to change because of the Gulf crisis.
According to the report, co-authored by Chatham House and the Forestry Stewardship Council, the energy shock caused by the current conflict between the US and Iran in the Gulf has prompted the promotion of biofuels as an alternative to oil.
Iran’s main response to attacks by the US was to seek to block the Strait of Hormuz, the shipping lane through which tankers carrying a fifth of the world’s oil pass, using missiles, drones and sea mines to attack shipping.
How Has The Gulf Crisis Increased Governments’ Interest In Biofuel Production?
The result has been a major slowdown in traffic, with some vessels stranded as insurance costs have soared and risk-averse carriers have been unwilling to put their vessels in harm’s way.
A range of significant consequences have arisen from this situation:
- A major rise in oil and gas prices
- Far eastern countries have been hit hardest as they have no domestic oil resources
- Iran has been discussing with Oman an arrangement that could see it extract tolls for use of the Straits of Hormuz
- The situation is exacerbated by sanctions on Russian oil, many of which have been in place since the invasion of Ukraine in 2022
The solution to shortages of oil and gas, with much of the latter coming in LNG form, could be sought from biofuels. The report predicts that by 2030, output will rise 68 per cent from 2025 levels.
Brazil, India, Indonesia and the US are the main countries listed where policies are being passed to swiftly expand biofuel output.
What Might Be The Downside Of A Large Increase In Biofuel Production?
However, they report warns, if this is all to be generated through crops grown for the purpose, it would require a land area the size of Germany to be found.
This raises a range of concerns about where such land will come from and the potential for deforestation, which from an environmental perspective would cancel out any gains in terms of lower carbon emissions.
A further concern was that some of the land may be found by switching production from food crops, leading to shortages, with palm oil, soy, maize and rice being used as biofuel feedstocks instead.
Chatham House argued that, in view of these concerns, a major increase in the use of biofuels should be “treated by policymakers as a targeted transitional measure to help bridge the current crisis, rather than a permanent solution to the problem of energy security.”
An alternative may be a ramping up of the generation of biofuels from recycled food waste, an approach the report argued would be a wise alternative to repurposing food crops for biofuel.
Whatever means are used to secure the material, there will also be a requirement to find more equipment, as a lot of tank fitting work will be needed to increase production capacity.
How Can Biofuel Output Be Increased Sustainably?
The concerns raised may prompt some countries to carefully consider how they can increase biofuel production swiftly in a sustainable way.
This could mean measures such as the establishment of more comprehensive food and plant waste collection systems, as well as more research into ways of increasing output.
What can safely be said is that the report predicting a rapid rise in biofuels was not doing so from the perspective of endorsing such an approach, but from a position of concern over the ecological and food security implications.
Nonetheless, the very fact that biofuels are being considered as a viable alternative to oil could lead to a quest to find ways of sustainably increasing output, given the demonstrable volatility of oil and gas prices amid protracted geopolitical turbulence.
A couple of key factors may make this happen. The first is that the conflicts that have so disrupted the international fossil fuels market in the last few years may not go away any time soon.
Whether or not the Iran conflict turns into another ‘forever war’ for the US, the Russia-Ukraine conflict shows no sign of ending. There is no guarantee that by 2030, or even beyond, the need for alternatives will not remain acute.
Secondly, if the extra tanks and all the other equipment that goes with them have been installed, slashing biofuel production and mothballing them may be a retrograde step.
Instead, their very presence and the value this represents may help encourage policymakers to do more to create an increasingly sustainable biofuels industry for the future.
