Towards advanced biofuels – options for integrating 1st and 2nd generation biofuel production (RES-T-BIOPLANT)
The integration of advanced (2nd generation / 2G) biofuel plants with conventional (1st generation / 1G) biofuel plants can lead to significant synergies and cost savings, especially for bioethanol plants. For biodiesel, conversion of fossil refineries to advanced biofuel production is another promising option as well.
These are the results of a scoping study commissioned by the IEA Implementing Agreement for Renewable Energy Technology Deployment (IEA-RETD) “Towards advanced biofuels – options for integrating conventional and advanced biofuel production sites (RES-T-BIOPLANT)”. The aim of this study was two-fold:
- Getting a better understanding of the scale of the opportunity for adapting existing sites to produce advanced biofuels; and,
- Analysing the potential role of government policy to incentivise site conversion.
Advanced (2nd generation / 2G) biofuel plants can be implemented as stand-alone units or integrated with conventional (1st generation / 1G) biofuel plants. Integration strategies can refer to: co-location (installing a separate 2G entity adjacent to an existing 1G facility), retrofitting (altering the existing 1G production line for producing 2G biofuels alongside 1G biofuels) or repurposing (adjusting the production process of an existing (mothballed) facility to produce 2G biofuels). There are cases where significant synergies between 2G and 1G plants exist, while in other cases, integration options are very limited. The variety of conceptual and design studies identify cost-savings from co-location for all 2G conversion pathways in the order of 5-10%.
The sequence of implementation of policy instruments is crucial. A market start-up will only happen if stable support to technology development and technology commercialization is given (by way of economic incentives) for a reasonable timeframe reflecting investment lifetimes. Blending mandates would cause more harm than benefits if they were applied in an immature market where biofuel prices have not yet reached stability and fossil fuel prices remain low.
Further analytical studies on the economic feasibility and other benefits of specific co-location and retrofitting strategies for 1G bioethanol sites as well as a specific mix of policy instruments are recommended.