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What is biofuel? Definition & pros and cons


Biofuel, also referred to as biomass, is energy converted from organic matter from plants or animals. The two most commonly used types of biofuel are ethanol and biodiesel.

Ethanol is made from plant materials. A chemical process called fermentation is one of the more frequent methods used to convert biomass into ethanol. During fermentation, plant sugars are metabolised to produce ethanol.

Biodiesel is produced from vegetable oils or animal waste. Almost all biodiesel is made using a process called transesterification – a chemical reaction between vegetable oil or animal waste with an alcohol such as methanol or ethanol. This reaction produces biodiesel and glycerin.

Simply put: Vegetable oil/animal waste + alcohol (methanol/ethanol) = Biodiesel and Glycerin

Glycerin is used in industries such as pharmaceutical and cosmetics. Biodiesel is usually blended with petroleum diesel for vehicle fuel. Pure biodiesel is uncommon and rarely used as a transportation fuel due to its higher cost as compared to blended biodiesel.

What are the pros and cons of biofuel?
Biodiesel from palm oil is increasingly used as an alternative to fossil fuels. In terms of direct carbon footprint, only palm oil offers a reduction of 50 percent in emissions compared with diesel. Biofuel also releases only one-fourth the amount of carbon dioxide as compared to conventional diesel releases.

Moreover, oil palm is the most productive vegetable oil. It has the highest yield per area and requires smaller amounts of pesticides and fertiliser than other vegetable oil crops like soybean and canola. These make palm oil the most economical feedstock for biofuel.

Palm oil has the highest yield per hectare as compared to rapeseed, sunflower and soybean oil
Palm oil is the most productive oil crop

Despite these advantages, palm oil is often associated with deforestation that causes biodiversity loss and worsens climate change. But did you know that the palm oil industry has taken the most steps to protect forests and conserve biodiversity?

For example, Golden Agri-Resources (GAR) has a strict No Deforestation, No Peat, No Exploitation (NDPE) policy that effectively delinks palm oil production from deforestation. Also, GAR is partnering with biodiversity experts, such as Orangutan Foundation International (OFI), and has rehabilitated 127 orangutans back to their natural habitat since 2011.

Banning palm oil feedstock for biofuel production is not the solution. Using sustainably produced palm oil is the answer – not only to combat climate change, but also to fulfil the global demand for energy, food, and industrial goods.

Biofuel production benefits smallholders and communities
The expansion of the biofuel industry can create more jobs for local rural communities. The income of smallholders can increase from biofuel crops as the demand for raw materials like crude palm oil rises. More domestically produced biofuel will also result in lower fossil fuel imports.

As the third-largest producer of biofuel, the palm oil industry in Indonesia generates large quantities of residue that can be used to process biofuel. In 2020, the Indonesian government launched the B30 mandate (30 percent palm oil, 70 percent diesel) to reduce GHG and fuel imports. This boosts the demand for locally-produced raw materials such as crude palm oil and reduces the dependency on imported fuel.

Overview of the global biodiesel and HVO production markets
Indonesia is the third-largest producer of biofuel (source: IEA)

The future of biofuel
Biofuel is the largest renewable energy source in use today, globally accounting for 70 percent of renewable energy supply and 10 percent of total primary energy supply in 2017.

It plays a key role as a source of energy in the replacement of fossil fuel in end-use sectors (industry, transport and buildings). Biofuel can contribute to balancing an electricity grid with high shares of variable renewables, such as solar PV and wind. This renewable energy source also makes a significant impact in decarbonising challenging sectors such as long-haul or heavy freight transport and industrial sectors such as iron and steel, cement and lime, aluminium and chemicals and petrochemicals.

Biofuel is produced from responsibly sourced crude palm oil (CPO) at Golden Agri-Resources (GAR). Read about how biofuel is produced at GAR here.

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