Continued support of R&D and initial commercialization is also critical, because sustained technological progress and commercial validation are required to affordably produce the large volumes of ethanol considered in this study. Infrastructure investment is important to ensure that the rail network in the U.S. can support biofuels distribution; however, this is a small component of projected total rail demands resulting from future expanded economic activity.
Significant R&D effort is required for conversion plants to increase their yields to drive down the cost of biofuel production. Additionally, continued R&D efforts are required to achieve commercial cultivation of high-yield energy crops – key to producing significant volumes of sustainable biofuels without drawing upon land currently used for food and feed. Additionally, expanding feedstock production must target lands requiring little or
no irrigation to keep water demands manageable.
Transportation CO2 savings were 250 million tons CO2 equivalent per year for 60 billion gallons of ethanol (excluding greenhouse gas emissions from land use change – a current topic of intense research). The energy in cellulosic ethanol is about 3.8 times the energy content of fossil fuels used for the entire supply chain (production and distribution; numbers based, in part, on assumptions in GREET). This is about 4 times the net energy ratio for gasoline (0.8).
Biofuels Commercialization Enablers
This study found no fundamental barriers to producing biofuels at large scale (e.g., supply chain or water constraints). However, multiple actions could be taken to enhance the successful build-out of the cellulosic biofuels industry.
Possible actions include:
A multi-decade energy policy that values stable fuel prices that are high enough to enable energy diversity in light of oil price volatility and periodic economic dislocations
Options include greenhouse gas taxes and market incentives (e.g., $50/ton CO2 tax significantly reduces required incentives)
Supportive policies to enable biofuel market success, including well-planned market incentives and carbon pricing, that could minimize investment risks
Enhancement of biofuels’ competitiveness with aggressive R&D- and commercialization-associated funding, despite current declining/low oil prices (Department of Energy, VCs, etc.)
Conversion investments to increase conversion efficiency and decrease capital cost
Improved energy crop technology to reduce cost, land use, and water use
Decreased timeframe for technologies to reach maturity (lowers investment risk)