The Global Renewable Fuels Alliance (GRFA) is a global biofuels federation representing over 90% of the world’s renewable fuels production from 45 different countries.
An Alliance with a Dual Mission:
The GRFA is committed to promoting the expanded use of renewable fuels throughout the world through the advocacy of sound public policy and responsible research. Through the development of new technology and best practices our members are committed to producing renewable fuels with the smallest possible ecological footprint.
As a group, we are focused on:
- The global biofuel industry’s contribution to the global economy;
- Climate Change and the important role that biofuels will play in mitigating the effects of global warming; and
- Outline the opportunity developing nations have before them with the adoption of biofuels friendly policies.
The Importance of Biofuels:
For several years now our industry has grown rapidly to satisfy the growing demand for cleaner more sustainable transportation fuels. Driven by progressive policies adopted by several countries, this unprecedented growth has seen global ethanol production increase more than 6 times since 2007.
If we consider the year 2016, where more than 98 billion litres of ethanol was produced globally, this production replaced the need for almost 2.5 million barrels of crude oil per day and expanded the quantity of gasoline available to consumers around the world.
Since ethanol has lower energy content than gasoline, a one-to-one substitution of ethanol for gasoline does not exist. The BTU content of ethanol is about two-thirds that of gasoline.Reflecting this, in 2012, if ethanol were not available, the world’s oil refiners would have had to “find” more than 14.6 billion gallons (345+ million barrels) of gasoline to make up the shortfall. Considering that a 42 gallon barrel of crude oil typically produces about 19.2 gallons of finished gasoline, more than an additional 2.1 million barrels of crude oil per day, or more than 2% of current world supply, would be required to produce the more than 14.6 billion gallons of gasoline needed to make up for the lost volume of ethanol.
Ethanol has become crucial to the global fuel mix, in fact, a 2008 Merrill Lynch report said that eliminating ethanol production from global fuel supplies would increase gasoline prices by as much as 15% today.
The global biofuels industry is also making a significant impact on the global economy. According to a report commissioned by the GRFA and done in partnership with the global economic research company, Cardno Entrix, the global biofuels industry contributed $277.3 billion to the global economy and supported 1.4 million jobs in all sectors in 2010.
At a time when economies are realigning, the global energy complex is going through huge change, and governments are struggling to find the next economic wave to boost their economies. The biofuels industry has shown and continues to show incredible promise and opportunity for the future.
This may seem counter intuitive to some today because oil prices are depressed and the global economic recovery has proven slower than predicted, but three fundamental facts have not changed despite the current economic challenges being faced:
- Future energy demands continue to be unsustainable.
- The threat of climate change has not abated.
- Fossil fuel is still a finite resource.
All this to say that if the world thought it was entering a period of sustained low energy pricing, we were wrong.
In short, the GRFA exists to demonstrate that ethanol can and will play an important role in meeting this future global energy demand. The International Renewable Energy Agency (IRENA) agrees, recently stating:
“In transport… the share of liquid biofuels and biomethane in total renewable energy use would grow from 4% in 2015 to 12% in 2030 and 26% in 2050. In absolute terms, this represents four-fold growth, from 129 billion litres in 2015 to approximately 500 billion litres per year by 2030. After 2030, the amount would more than double, to 1120 billion litres per year by 2050.”
Biofuels Production Looking Forward:
Building on the success of the grain ethanol industry, cellulosic ethanol plants are coming online shortly using a variety of biomass feedstocks to produce the next generation of ethanol.
The promise that these new developments bring for further reductions in GHGs will catapult the ethanol industry forward as the single biggest opportunity to reduce emissions from the transportation sector.
For those countries with abundant arable land, this represents a huge opportunity to become producers of fuel as opposed to importers of crude oil.
The Only Commercially Available Replacement for Crude Oil:
It is widely accepted that as the footprint of ethanol and biofuels continues to shrink, the carbon footprint of gasoline continues to grow.
As conventional oil is depleted and we expand the mining of unconventional resources several miles under the ocean, the arctic or the oil sands, this footprint will continue to grow. In fact, some have argued that the mining of the Canadian oil sands already has a negative energy balance.
In the end, ethanol can and will play an important role in fighting climate change because it is the only commercially available replacement for crude oil.
Opportunity for the Developing World:
Finally, the GRFA would like to address opportunity – the opportunity facing many developing countries today should they choose to adopt biofuels friendly policies.
Today, 38 of the 47 poorest countries on earth are net importers of crude oil and 25 of those countries import all of their crude requirements.
When crude prices rise even slightly, the impact on the developing countries’ balance of trade is devastating, forcing them to reduce social spending making the economic impact on a family earning $1,000 per year overwhelming.
The good news is that many of these developing countries have vast areas of arable land and the desire to reduce their crippling reliance on imported crude oil.
In this regard we are not talking just about corn – in the case of Africa and parts of Asian we are talking about: sugar cane, cassava, jatropha, native grasses and agricultural residues like corn stover. The potential is awesome.
According to a World Bank report:
“Sub-Saharan Africa has more than 1 billion hectares of land with potential for rain-fed crop production according to the Food and Agriculture Organization of the United Nations, of which less than one-quarter is being cultivated. Biofuels offer the prospects of a new cash crop for farmers, increased employment in rural areas, reduced fuel import costs, and foreign exchange earnings.”
This will not be easy – it will take political will, the right policies and investment from the west to make this dream a reality.
We are calling on the World Bank today to make investments in developing countries’ biofuels infrastructure a top priority.
One of the main commitments of the GRFA is to demonstrate that biofuels can and should play a role in helping developing countries reduce their reliance on imported oil. At the same time a biofuels industry will provide these countries with a much needed boost to their agricultural sector.
The Global Renewable Fuels Alliance will be an active participant in the ongoing debate at the international level regarding biofuels policies.
We look forward to providing a much-needed voice in the international arena to ensure that all countries have the opportunity to benefit from the development of a renewable fuels industry.