231
other products – including packaged foods – and India is a significant importer of
palm oil for cooking. Therefore, any significant expansion of the use of palm oil for
biodiesel would negatively impact its use as cooking oil, or in other products, or
could encourage deforestation to make way for new palm oil plantations.
Table 14.5 presents a hypothetical scenario showing how much gasoline and
diesel could be replaced if the entire production of selected feedstock crops in
selected countries were to be entirely used for biofuels. For example, in the case of
Indonesia, in 2008–2010, the country produced 272 million liters of biodiesel which
accounted for 1.3% of diesel use (by energy share). Indonesia also produced 64 million tons of palm oil in 2005. USAID calculated that about 230 l of biodiesel can be
produced from one ton of palm oil feedstock. Therefore, if Indonesia’s entire production of 64 million tons of palm oil hypothetically could be converted to 14.7
billion liters of biodiesel, extrapolating from the share of diesel accounted by current biodiesel production, and assuming that all of the current biodiesel production
is based on palm oil, the result is that converting all of Indonesia’s palm oil to biodiesel would replace only about 70% of diesel fuel. This is admittedly a very rough,
back of the envelope calculation. A number of factors could increase the potential
replacement ratio, for example, if more crops were included or land productivity
was higher. But the calculation is also conservative, in that it double counts the
existing feedstock use, thereby overestimating the potential replacement ratio (possibly to a significant extent).
1
Overall, it gives an indication of the potential scale of
biofuels in comparison to the use of liquid fossil fuels. It suggests that it may be
quite difficult to expand crop-based biofuels to much more than 10% of liquid fossil
fuels.
Tharakan et al. (2012) include an estimate of the potential for biofuels in the
countries in the Greater Mekong Subregion (GMS). They note that available statistics optimistically suggest the potential to produce large amounts of biofuels.
However, they conclude that the actual potential is much more modest if social and
environmental risks are taken into account; moreover, land availability statistics
typically are not very accurate in these countries. They note that while land availability currently is not a serious concern, expected increases in population and corresponding demand for food could generate increasing competition for land, and
increasing risks of climate change and extreme weather are likely to adversely affect
agricultural productivity.
Even in the more optimistic case, the ability of the GMS countries to generate
significant exports is limited (see Table 14.6). In 2009, under the assumption that
10% of arable land could be used for biofuels, only Myanmar and Laos could have
1 For example, in the case of Indonesia, all of the palm oil is assumed to be used to achieve the 70%
replacement of biodiesel. However, some of the palm oil was already used to achieve the existing
1.3% replacement ratio, which was the basis for the extrapolation. This double counting is thus not
very significant in the case of Indonesian biodiesel, but it might make more difference in the case
of ethanol in Brazil. This is because a significant part of the sugar crop is already included in the
current replacement ratio, which is already high at 47%. This calculation implies that about two
thirds of the sugar crop is already used for ethanol, and converting the other one third would only
push the replacement ratio up to 70%.
14 A Regional Perspective on Biofuels in Asia
other products – including packaged foods – and India is a significant importer of
palm oil for cooking. Therefore, any significant expansion of the use of palm oil for
biodiesel would negatively impact its use as cooking oil, or in other products, or
could encourage deforestation to make way for new palm oil plantations.
Table 14.5 presents a hypothetical scenario showing how much gasoline and
diesel could be replaced if the entire production of selected feedstock crops in
selected countries were to be entirely used for biofuels. For example, in the case of
Indonesia, in 2008–2010, the country produced 272 million liters of biodiesel which
accounted for 1.3% of diesel use (by energy share). Indonesia also produced 64 million tons of palm oil in 2005. USAID calculated that about 230 l of biodiesel can be
produced from one ton of palm oil feedstock. Therefore, if Indonesia’s entire production of 64 million tons of palm oil hypothetically could be converted to 14.7
billion liters of biodiesel, extrapolating from the share of diesel accounted by current biodiesel production, and assuming that all of the current biodiesel production
is based on palm oil, the result is that converting all of Indonesia’s palm oil to biodiesel would replace only about 70% of diesel fuel. This is admittedly a very rough,
back of the envelope calculation. A number of factors could increase the potential
replacement ratio, for example, if more crops were included or land productivity
was higher. But the calculation is also conservative, in that it double counts the
existing feedstock use, thereby overestimating the potential replacement ratio (possibly to a significant extent).
1
Overall, it gives an indication of the potential scale of
biofuels in comparison to the use of liquid fossil fuels. It suggests that it may be
quite difficult to expand crop-based biofuels to much more than 10% of liquid fossil
fuels.
Tharakan et al. (2012) include an estimate of the potential for biofuels in the
countries in the Greater Mekong Subregion (GMS). They note that available statistics optimistically suggest the potential to produce large amounts of biofuels.
However, they conclude that the actual potential is much more modest if social and
environmental risks are taken into account; moreover, land availability statistics
typically are not very accurate in these countries. They note that while land availability currently is not a serious concern, expected increases in population and corresponding demand for food could generate increasing competition for land, and
increasing risks of climate change and extreme weather are likely to adversely affect
agricultural productivity.
Even in the more optimistic case, the ability of the GMS countries to generate
significant exports is limited (see Table 14.6). In 2009, under the assumption that
10% of arable land could be used for biofuels, only Myanmar and Laos could have
1 For example, in the case of Indonesia, all of the palm oil is assumed to be used to achieve the 70%
replacement of biodiesel. However, some of the palm oil was already used to achieve the existing
1.3% replacement ratio, which was the basis for the extrapolation. This double counting is thus not
very significant in the case of Indonesian biodiesel, but it might make more difference in the case
of ethanol in Brazil. This is because a significant part of the sugar crop is already included in the
current replacement ratio, which is already high at 47%. This calculation implies that about two
thirds of the sugar crop is already used for ethanol, and converting the other one third would only
push the replacement ratio up to 70%.
14 A Regional Perspective on Biofuels in Asia