How to advance cellulosic biofuels

Published: 2016.01.20

Daan Peters, Sacha Alberici (Ecofys), and Jeff Passmore (Passmore Group), with contributions from Chris Malins (ICCT)

The use of advanced biofuels (produced from agricultural or forest residues or sustainable energy crops) in transport is generally viewed as a sustainable manner in which to mitigate the climate impact of the transport sector. However, the share of advanced biofuels in the total supply of biofuels in the European Union remains low. Why has the uptake of advanced biofuels been so slow? Generally, it comes down to an assessment of risk, and the certainty of receiving returns on investor’s capital deployed. Advanced biofuels projects still have many risks. Capital costs are high, some technologies are not widely tested at commercial scale, and little certainty exists that produced fuels can be sold to the market at a sufficiently high price, as the regulatory climate to ensure long-term offtake has been lacking.

How can the uptake of advanced biofuels be accelerated more effectively? Within the Biofrontiers project, convened by the European Climate Foundation to investigate opportunities for sustainable biofuel production in Europe, the ICCT commissioned Ecofys to assess production costs for key advanced biofuel technologies, describe the barriers for increased investment in advanced biofuels, assess which types of investors would be willing to finance investments in advanced biofuels and consider which policies could eliminate barriers and attract investment.