TY - JOUR
T1 - The forgotten implications of low oil prices on biofuels
AU - Reboredo, Fernando Henrique
AU - Lidon, Fernando Cebola
AU - Ramalho, José Cochicho
AU - Pessoa, Maria Fernanda
PY - 2017/1/1
Y1 - 2017/1/1
N2 - The sudden drop of oil prices since mid-2014 has echoed in the news due to implications at national and international levels. For unknown reasons, the effects of quasi permanent low oil prices on biofuels were ignored. With current oil prices, biofuels are not competitive with gasoline, thus the blend wall of regular cars will not rise as soon as expected, and the ethanol's market saturation and the high prices of capital and operational costs are factors that do not contribute to boost consumption. Objections to biofuels subsidies, as well as arguments against the rise of food prices as a consequence of biofuel production from feed crops instead of agricultural and forestry wastes, will become more valid than ever. However, to fulfil biofuel policies regarding energy independence and decarbonization, and in the face of the failure of important advanced biofuel projects, huge public expenditures (incentives/subsidies), extended biofuel mandates, improvement in biofuel technologies, and security for investments through coherent and stable policies are needed. Furthermore, it is advisable to maintain a sustainable conventional biofuel industry to facilitate the transition to advanced biofuels. Citizens must be aware of the indirect costs of fossil fuels (coal mining, pollution, and energy security) and realize that the deployment of biofuels is both a question of opportunity and a challenge. The devastating effect of low oil prices on biofuels and on unconventional oil's exploitation and the constraints to biofuel developments, are still in the horizon, especially when OPEC will no longer act as the swing oil producer.
AB - The sudden drop of oil prices since mid-2014 has echoed in the news due to implications at national and international levels. For unknown reasons, the effects of quasi permanent low oil prices on biofuels were ignored. With current oil prices, biofuels are not competitive with gasoline, thus the blend wall of regular cars will not rise as soon as expected, and the ethanol's market saturation and the high prices of capital and operational costs are factors that do not contribute to boost consumption. Objections to biofuels subsidies, as well as arguments against the rise of food prices as a consequence of biofuel production from feed crops instead of agricultural and forestry wastes, will become more valid than ever. However, to fulfil biofuel policies regarding energy independence and decarbonization, and in the face of the failure of important advanced biofuel projects, huge public expenditures (incentives/subsidies), extended biofuel mandates, improvement in biofuel technologies, and security for investments through coherent and stable policies are needed. Furthermore, it is advisable to maintain a sustainable conventional biofuel industry to facilitate the transition to advanced biofuels. Citizens must be aware of the indirect costs of fossil fuels (coal mining, pollution, and energy security) and realize that the deployment of biofuels is both a question of opportunity and a challenge. The devastating effect of low oil prices on biofuels and on unconventional oil's exploitation and the constraints to biofuel developments, are still in the horizon, especially when OPEC will no longer act as the swing oil producer.
KW - biofuels
KW - cellulosic ethanol
KW - oil prices
KW - price competitiveness
UR - http://www.scopus.com/inward/record.url?scp=85018686122&partnerID=8YFLogxK
U2 - 10.1002/bbb.1769
DO - 10.1002/bbb.1769
M3 - Article
AN - SCOPUS:85018686122
SN - 1932-104X
VL - 11
SP - 625
EP - 632
JO - Biofuels, Bioproducts and Biorefining
JF - Biofuels, Bioproducts and Biorefining
IS - 4
ER -