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Biofuels are being used extensively in Latin America, North America, Europe, Asia and, to some extent, in Australia and Africa. In recent years many countries have shown a growing interest in this sector.

Biofuels are becoming more popular because they offer the following advantages:
• Reduce green house gases (GHGs) and mitigate their adverse effects.
• Reduce vehicular pollution resulting in lower medical care costs and increased longevity.
• Reduce dependence on imported fossil fuels and improve energy security of countries that do not have sufficient indigenous production of crude oil.
• Are readily biodegradable.
• Are from renewable sources of energy.
• Ethanol increases the octane number of gasoline and has low sulfur content.
• Biodiesel has a high cetane number; increases lubricity and reduces engine wear; a high flash point; and low sulfur content.
• Provide boost to economy, particularly rural, and generate employment.
• Use proven and low capital cost technology that can be readily implemented.
• Decentralized form of energy while petroleum is centralized.

Types of Biofuels

  • Ethanol

Ethyl alcohol, or ethanol, is a well-established fuel and an oxygenate that can be used for various internal combustion engine applications, including transport and electricity generation. The two leading countries using ethanol for transport and related sectors are Brazil and the USA. In 2002, the consumption of ethanol in Brazil was around 12 billion liters while that in USA was about 8 billion liters. The consumption of ethanol in India is expected to exceed 400 million liters in 2004. Ethanol is generally used in a blend of gasoline and ethanol known as gasohol. However, subsequent to engine modification, it can also be used in neat form (85% to 100% blends).

  • Biodiesel

Biodiesel consists of esters made from vegetable oils and fats. The use of biodiesel is growing rapidly in many countries.

Biodiesel can be manufactured from the following substrates:

• Fats – animal fats of any kind.
• Vegetable oil – from any plant source.
• Used vegetable oils or recycled cooking oil.

Biodiesel can be blended with diesel in any proportion from as low as 2% (B02) up to 100% (B100). The most commercially popular blends are those with up to 20% biodiesel (B20), as they are normally covered by warranties provided by many engine manufacturers.

Use of biofuels in small-scale generator sets

No engine modifications are necessary for the use of gasohol (up to E25) or diesel blended with up to 20% biodiesel (B20). A minor adjustment or tuning of the engine may be required in the air fuel ratios. The energy content (calorific value) of biodiesel is slightly lower than diesel but this does not have a significant effect on fuel consumption.

Ethanol-blended fuels may accelerate corrosion marginally but this is not considered a significant factor when the ethanol proportion is less than 25%. However, if the fuel tanks contain water and are not properly cleaned, a phase separation occurs in which ethanol and gasoline separate out, causing engine problems. In such a situation, the fuel tank needs to be emptied and cleaned and fresh gasohol has to be added.

The use of 100% biodiesel (B100) may accelerate corrosion marginally, and may necessitate special care in very cold climates. Seals, gaskets & hoses should not be of ordinary rubber but of elastomers of desired quality. On the other hand, there is no report of 20% biodiesel (B20) causing any problems to the rubber in fuel system components or because of cold climate. The positive effect of biodiesel is that it reduces engine wear because of its superior lubricity properties. Biofuels are readily biodegradable and thus do not harm the environment. Biodiesel has a high flash point of 260° as against 125° F for regular diesel. Thus it is much safer to use.


The cost of production of biofuels may be higher than that of conventional fossil fuels, keeping in mind that world oil prices have been subject, historically, to fairly wide market fluctuations. In a December 2002 presentation, Luiz Carlos Corrêa Carvalho of Brazil’s UNICA reported average production cost of ethanol in center-south Brazil at US$25 per barrel ($40 per barrel including taxes) compared to a cost for gasoline of $35 per barrel at the refinery ($61 per barrel including taxes) (Carvalho, 2002). In the USA, the price of ethanol is competitive with gasoline if the price differential per gallon is up to $ 0.50, as there is a federal excise rebate of $ 0.52 per gallon of ethanol when it is blended with gasoline.

Biodiesel is normally more expensive than diesel. If the average price of biodiesel in the USA is $2.00 per gallon as compared to $1.00 per gallon for regular diesel, then B20 fuel would cost about 20 cents more than diesel (although, the price difference between the two types of fuel is reduced as many governments in the world provide various tax incentives for “green” fuels. The prices of biodiesel (B100) in Germany and Austria are competitive to that of diesel and B05 is used extensively in France. This is possible because of long-term tax breaks given to “green” fuels. Such tax breaks and other incentives are necessary because the biodiesel industry is in its infancy. The European Union has set a target of 2% use of biofuels by 2005 and 5.75% by 2010. The state of Minnesota in the U.S.A. has set a target of 2% use of biodiesel (B02) by 2005.

Fuel grade characteristics must also be considered when comparing the price of biodiesel with regular diesel. The sulfur content of biodiesel is equivalent to that of ultra-low-sulfur diesel (ULSD), which is significantly more expensive than regular diesel. Biodiesel has better lubricity – which improves engine life – than ULSD and also has a higher flash point and cetane number. Matching these characteristics adds to the cost of manufacturing diesel of equivalent grade.

All reported disadvantages of biodiesel can be overcome without difficulty. The demerits of biodiesel are reported to be degradation over a period of time (shelf life) because of its biodegradability, and a marginal increase in nitrogen oxide emissions (+2%). The first issue has not caused any major problems anywhere in the world while the second can be addressed by the use of a catalytic converter.

Biofuels offer an ideal opportunity for providing renewable energy for rural ICT systems where the capital costs in generating systems are to be kept low. The use of biofuels in small generating systems is technically feasible and commercially viable. Depending on availability and warranty by the manufacturer, biofuels such as biodiesel and ethanol can be used in appropriate proportions such as B20 and E10.

However, there is a need to arrange for biofuels or produce them locally. There is a possibility of installing small decentralized biodiesel plants in remote areas that would provide rural employment in cultivation of oil seeds, extraction of oil and, if required, in production of biodiesel. The investment per unit of capacity for small-scale unit is likely to be 3 to 4 times that of large-scale. However, such a unit would operate on low overheads and the cost of transportation would be lower. Thus viability of each such unit needs to be examined individually, taking into account local conditions and costs of other forms of renewable energy. Biodiesel produced from such units could be used for various rural applications including generation of electricity for meeting requirements ICT and other needs, farming, operating tube-wells for irrigation and drinking water, and heating. The realization of the vision of making rural communities energy self-sufficient would make biodiesel a truly decentralized, low capital investment source of energy for the remote areas of underdeveloped countries.

Additional sources of information:

Web site of the National Biodiesel Board (USA).

Web site of the U.S. Department of Energy National Biofuels Program.