Bio4EU-Task2Annexindustrialproduction

CONSEQUENCES, OPPORTUNITIES AND CHALLENGES OF MODERN BIOTECHNOLOGY FOR EUROPE (BIO4EU) - TASK 2 CASE STUDIES REPORT THE IMPACT OF INDUSTRIAL BIOTECHNOLOGY APPLICATIONS ANNEX TO REPORT 3DELIVERABLE 21

Framework Service Contract 150083-2005-02-BE

Specific Contract C150083.X12

Version no. 3

This Annex report has been produced by the ETEPS AISBL with contributions from: Christien Enzing, TNO Innovation Policy Group, Netherlands Annelieke van der Giessen, TNO Innovation Policy Group, Netherlands Sander van der Molen, TNO Innovation Policy Group, Netherlands Cootje van Zandvoort, TNO Innovation Policy Group, The Netherlands Johan van Groenestijn, TNO Microbiology Group, Netherlands Koen Meesters, TNO Microbiology Group, Netherlands Raija Koivisto, VTT Innovation Studies Group, Finland Gun Wirtanen, VTT Bioprocessing Group, Finland Arja Miettinen-Oinonen, VTT Bioprocessing Group, Finland Jaakko Pere, VTT Bioprocessing Group, Finland Sibylle Gaisser, Fraunhofer Institute for Systems and Innovation Research, Germany

Framework Service Contract 150083-2005-02-BE Consequences, opportunities and challenges of modern biotechnology for Europe - Task 2 Report 3/Deliverable 21 Page 2 of 184

Document Change RecordIssue Version 1 2 3 all Comments Affected Pages Date 4th October 2006 5th January 2007 28th September 2007 Change Release

DistributionOrganisation Number of Documents



Table of Contents

1 2

Introduction............................................................................................... 11 Case study: Fuel Bioethanol ................................................................... 13 2.1 2.2 2.3 2.4 2.5 Introduction ................................................................................ 13 Case description ........................................................................ 13 Approach ................................................................................... 14 Results....................................................................................... 17 Summary and Conclusions ........................................................ 25

3

Case study: Biopolymers......................................................................... 31 3.1 3.2 3.3 3.4 3.5 Introduction ................................................................................ 31 Case description ........................................................................ 32 Approach ................................................................................... 34 Results....................................................................................... 37 Summary and Conclusions ........................................................ 47

4

Case study: Cephalosporin ..................................................................... 57 4.1 4.2 4.3 4.4 4.5 Introduction ................................................................................ 57 Case description ........................................................................ 57 Approach ................................................................................... 59 Results....................................................................................... 61 Summary and Conclusions ........................................................ 68

5

Case study: Enzymes for Detergents ..................................................... 75 5.1 5.2 5.3 5.4 5.5 Introduction ................................................................................ 75 Case description ........................................................................ 75 Approach ................................................................................... 77 Results....................................................................................... 79 Summary and Conclusions ........................................................ 85


6

Case study: Enzymes for Fruit Juice Processing.................................. 91 6.1 6.2 6.3 6.4 6.5 Introduction ................................................................................ 91 Case description ........................................................................ 91 Approach ................................................................................... 96 Results....................................................................................... 98 Summary and Conclusions ...................................................... 104

7

Case study: Enzymes for Pulp and Paper ............................................ 109 7.1 7.2 7.3 7.4 7.5 Introduction .............................................................................. 109 Case description ...................................................................... 109 Approach ................................................................................. 111 Results..................................................................................... 113 Summary and conclusions....................................................... 120

8

Case study: Enzymes for Textile Processing ...................................... 125 8.1 8.2 8.3 8.4 8.5 Introduction .............................................................................. 125 Case description ...................................................................... 125 Approach ................................................................................. 127 Results..................................................................................... 129 Summary and conclusions....................................................... 136

9

Case study: Lysine ................................................................................. 141 9.1 9.2 9.3 9.4 9.5 Introduction .............................................................................. 141 Case description ...................................................................... 141 Approach ................................................................................. 142 Results..................................................................................... 144 Summary and Conclusions ...................................................... 150

10 Case study: Riboflavin Vitamin B2..................................................... 153 10.1 10.2 10.3 10.4 Introduction .............................................................................. 153 Case description ...................................................................... 153 Approach ................................................................................. 155 Results..................................................................................... 157


10.5

Summary and Conclusions ...................................................... 166

11 Case study: Biosensors in environmental applications ..................... 173 11.1 11.2 11.3 11.4 11.5 Introduction .............................................................................. 173 Case description ...................................................................... 174 Approach ................................................................................. 174 Results..................................................................................... 176 Summary and Conclusions ...................................................... 181


List of FiguresFigure 4-1: Figure 6-1: Figure 10-1: Active nucleus of Cephalosporins ............................................................. 58 Flow scheme of unit operations in juice manufacture ............................... 95 Methods of producing riboflavin............................................................... 154


List of TablesTable 2-1: Table 2-2: Table 3-1: Overall EU economic indicators ................................................................ 17 Overall EU environmental indicators ......................................................... 23 Impact of biotechnology through biotech-based polymer production on Europe ................................................................................ 38 Contribution of biotechnology to energy saving and CO2 emission reduction..................................................................................... 45 Economic impact of biotechnology through the production of cephalosporin in Europe ............................................................................ 62 Environmental impact of biosynthesis of cephalosporin and its building blocks ........................................................................................... 65 Economic impact of enzymes (data for 2005) ........................................... 80 Recent past, current and future analysis for industrial enzymes (for detergents), annual revenues in million US$/million (US$ 1 = 0,7765) for years 2001-2010 ................................................... 81 Environmental impact of enzymes............................................................. 84 Economic impact of biotechnology through enzymes for fruit juice production in Europe ......................................................................... 98 Economic impact of enzymes for the pulp and paper industry................ 114 Global markets for specific industrial enzymes in the paper industry (Euros, millions) ......................................................................... 116 Regional markets for industrial enzymes in the paper industry, 2002 - 2009 (Euros, millions)................................................................... 117 Environmental impact of enzymes in pulp and paper production ................................................................................................ 119 Economic impact of biotechnology on the use of enzymes in the textile processing in Europe .............................................................. 130 Regional markets for industrial enzymes in the textile industry, 2002 - 2009 (million US$) ........................................................................ 132 Environmental impact of enzymes in textile production .......................... 134 Economic impact of lysine production ..................................................... 145 Environmental impact of lysine in feed .................................................... 149

Table 3-2:

Table 4-1:

Table 4-2:

Table 5-1: Table 5-2:



Table 7-3:

Table 7-4:

Table 8-1:

Table 8-2:

Table 8-3: Table 9-1: Table 9-2:


Table 10-1:

Impact of biotechnology through biotech-based riboflavin production on EU level............................................................................. 158 Contribution of biotechnology to savings in consumption of means of production and in emissions .................................................... 164 The economic impact of biosensors in Europe........................................ 177 Investment and per sample costs of biosensor and conventional analysis............................................................................... 179

Table 10-2:



1

Introduction

This Annex report presents the case studies of Work Package 3 Industrial Biotechnology Applications. Ten case studies have been performed belonging to the three fields defined for this study. Field 1: Biofuels Case study Fuel Bioethanol Field 2: Biotech-based Chemicals Case studies Biopolymers Cephalosporin Enzymes for Detergents Enzymes for Fruit Juice Processing Enzymes in the Pulp and Paper Industry Enzymes in Textile Processing Lysine Riboflavin Field 3: Case study Biosensors in environmental applications Biosensors



22.1

Case study: Fuel BioethanolIntroduction

The fermentative production of ethanol is one of the oldest biotechnology activities with a history of thousands years. It still holds a number one position in industrial fermentation with respect to volumes produced, which implies a significant impact on society. The production of bioethanol has got a boost by an increased demand of renewable energy sources and by developments in modern biotechnology. Many countries all over the world have decided to limit the emission of greenhouse gases, CO2 being the most important, and the use of biofuels produced from renewable sources is one of the measures being implemented in several world regions. The EU has formulated a guideline of 5.75 % biofuel share in transportation fuels by 2010. The options to reach that goal are the use of ethanol, ETBE, biodiesel, pure plant oil, methane and hydrogen gas produced from renewable organic matter. In Europe the use of biodiesel and ethanol (in a few countries incorporated in ETBE as a replacement of MTBE) are most promising to reach the EU demands. In Europe bioethanol is produced from wheat, sugar beets and wine, of which wheat is the most important raw material. The costefficient production of bioethanol from wheat starch has been made possible by modern biotechnology. The required enzymes (amylases) for the conversion of starch into glucose (the substrate for ethanol producing yeasts), can now be purchased at low prices due to the efficient production of amylases by genetically modified microorganisms in large scale fermentations. At present, the enzyme-costs amount only a few % of the bioethanol production costs (Haagensen 2006)1. More modern biotechnology to improve bioethanol production is on its way. The use of ligno-cellulosic raw materials such as wood, straw and grass, after pretreatment and hydrolysis yields a hydrolysate containing glucose, xylose and arabinose. While the most interesting ethanol producer Saccharomyces cerevisiae is unable to use xylose and arabinose, recombinant strains have been constructed that are able to convert glucose and xylose or arabinose into ethanol (Herrera 2006)2. The purpose of this case study is to quantify the importance of bioethanol in liquid fuel production and job creation, and to assess the effect on fuel production costs. The situation in the EU25 will be compared with that in the USA, Japan and Brazil. Further, the effect on the use of non-renewable sources and CO2 emission will be quantified and compared in world regions. A prediction how these effects will develop in the next five years will be given. The social impact will be described qualitatively.

2.2

Case description

The technology considered is the fermentative production of ethanol from carbohydrate raw materials. In Europe wheat is the dominant raw material for ethanol production. The production process comprises grinding of the wheat grains, suspending in water, enzymatic liquefaction, enzymatic hydrolysis (yielding a glucose solution), fermentation using the yeast Saccharomyces cerevisiae, distillation, rectification (second distillation) and the removal of last traces of water from the ethanol. The suspended solids collected in the process are dried and sold as cattle feed. In the USA corn is used as raw material and the production process is similar to the European process. In Brazil sugar can is used: after pressing the sugar liquid from the canes, the liquid can be used in a fermentation process. No hydrolytic enzymes are required. The remains of the cane plant (bagasse) is used as fuel in the steam boilers of the bioethanol plant.

1 Haagensen, F.D. (2006) Next Steps in the Conversion of Biomass to Value Added Products; 2nd European Bioethanol Technology Meeting 2006; April 25-26, 2006, Detmold, Germany 2 Herrera, S. (2006) Bonkers about biofuels; Nature Biotechnology: 2497): 755-760


The product from these biotechnological processes is called bioethanol. In principle it is also possible to make ethanol chemically from fossil organic sources, which is an extremely minor practice at present, and is not included in this case study. Worldwide 79 % of the bioethanol produced is used as fuel (2005) and this percentage is increasing. 7 % is used in industry and 14 % in beverages3. In this case study the application of bioethanol as fuel is considered. In this application mostly mixtures of gasoline and ethanol are produced by oil companies. E5 (5 % volume per volume (v/v) ethanol in gasoline) is used in Sweden, E10 in the USA, while Brazil uses 20-25 % ethanol/gasoline mixtures, E85 and E100 (pure ethanol) (Erbert 2006)4. E85 is available in a small number of filling stations in Europe and USA. According to the EU directive no more than 5 % ethanol is allowed in gasoline for normal cars (this is just a political decision). Normal gasoline automobiles can accept 15 % ethanol5. For higher ethanol percentages special cars are required: the so called Flex-Fuel Vehicles (FFV), which are available in the market in various brands and models. An alternative is to incorporate bioethanol into ETBE (ethyl-tertbutylether), which can replace MTBE as an oxygenate in the gasoline. The advantage is that according the EU directive this compound can be used in a concentration of 15 % in gasoline (actually 7 % ethanol). This practice is carried out in France, Spain and Poland6. Ethanol cannot be mixed with diesel.

2.32.3.1

ApproachRational and description of approach

This study assesses the economic, social and environmental impact of fuel bioethanol production on the EU25 and compares it with the USA, Japan and Brazil. Economic impact One of the best indicators to measure the importance of a technology in a society are the revenues connected to using that technology. It expresses the effort society is prepared to make for a certain activity. Since fuel bioethanol is a biotechnological product that replaces the conventional product gasoline, the relative importance of fuel bioethanol can be expressed as the share of fuel bioethanol revenues out of total liquid fuel revenues (IBI4). This share is calculated from the revenues of the EU25 fuel bioethanol production and the EU25 total liquid fuel production (which comprises fossil liquid fuel, biodiesel and bioethanol). The revenues are estimated from the quantities produced in the EU25 (in tonnes per year) and the sales price provided by the factories. The change in production costs when replacing fossil fuel by bioethanol is a second important economic effect. It expresses if and how much consumers can benefit financially from the use of biotechnology. The production costs comprise the costs for raw materials, transport of the raw materials, capital costs, land costs, and costs for maintenance, personnel, energy, insurance and royalty fees. The production of bioethanol from wheat and that of gasoline from crude oil are compared. The costs can be expressed as Euro/litres, however, one litre bioethanol contains less energy (based on lower heating value) than a litre gasoline, with a ratio3 F.O. Lights World Ethanol and Biofuels Report 4(5) Nov. 11, 2005 4 Erbert, P.R. (2006) Alternative Fahrzeugtechnik; Presentation on Bio-Ethanol-Initiative in Straubing, Germany, March 22, 2006. (www.carmen-ev.de/dt/energie/ beispielprojeckte/biotreibstoffe/ethanol/downloads/erbert.pdf), accessed 20-6-2006 5 personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-6-2006) 6 www.eu.int/comm./energy/res/publications/doc/2004_brochure_biofuels_en.pdf, accessed 20-6-2006


of 0.67. Therefore, the costs are also expressed as /l gasoline equivalent. A ratio of the production costs of bioethanol (nominator) and liquid fuel (gasoline actually) (denominator) is calculated (IBI6). The revenue per employee expresses the connection between economic importance and employment. This parameter is calculated for both bioethanol factories (IBI7-7a) and oil refineries (IBI-7b). The revenue is calculated as described above and the number of employees in the EU25 in the sector of interest is estimated from employment and production volume figures from a few single bioethanol plants and oil refineries, extrapolated to the total EU25 using the total production volume data from the EU25. The EU25 strives to a high degree of employment among its inhabitants, since employment gives people security and contributes to the quality of life. Therefore, next to financial effects of biotechnology, job creation is included in this study. Jobs can be created in the biotechnology companies (direct job creation) (IBI10-10a) and in the sector that produce the raw materials and deliver services to the production factories (indirect job creation) (IBI10-10b). Documents are available that provide information about this indirect job creation. Social impact The social impact is addressed in a qualitative way in this study. The themes discussed have been selected on the basis of discussions at international bioethanol and bioenergy conferences in 2006. Environmental impact The two main reasons to replace gasoline by bioethanol is the reduction of the use of nonrenewable sources (IBI11-11a) and the reduction of CO2 emission (IBI11-11b). The emission of CO2 is reduced since a carbon cycle is created between the crop that consumes CO2, the bioethanol produced from the crop and the CO2 produced by incineration of bioethanol in cars. Although, there are other environmental effects connected to the use of bioethanol (on the emission of fine particles, NOx, SOx, etcetera), CO2 emission is the most important parameter.

2.3.2

Sources

Expert interviews: Mr Kenneth Werling: director of Lantmnnen Agroetanol in Sweden (the largest bioethanol factory in Sweden) Mr Robert Vierhout: chairman of the European Bioethanol Fuel Association (office in Belgium) Mr Thomas Gameson: employee of Abengoa (the largest bioethanol producer in Europe) Documents from IEA (International Energy Agency) IPTS RFA (Renewable Fuels Association; in the USA) European Commission IFP Dechema CSR Eurostat OECD US Congress


Conference proceedings and presentations eBio Conference World Summit on ethanol fro transportation, Quebec, Canada, Nov 2-4, 2003 2nd European Bioethanol Technology Meeting 2006; Detmold, Germany, April 25-26, 2006 World Bioenergy Conference, Jnkping, Sweden, May 30-June 1, 2006 Winter Fuels Conference. Oct 12, 2005 Bio-Ethanol-Initiative, Straubing, Germany, March 22, 2006. INVERDE studiedag Duurzaam actief en mobiel met biobrandstoffen, Hoboken, Belgium, May 8, 2006 Journals: F.O. Lights World Bioethanol and Biofuels Report Stromen (Dutch) Biofuels Barometer Renews (from the European Commission) AMFI Newsletter Science Autoweek NPN International Nature Biotechnology Websites: Company websites (bioethanol producers, refineries) University websites Market Researchers (McIlvain) Worldbank IMF Encyclopedia EU


2.42.4.12.4.1.1Table 2-1:

ResultsEconomic impactImpact on EU levelOverall EU economic indicators indicator Share of fuel bioethanol revenues out of total liquid fuel revenues value 0.15 % in 2003 0.14 % in 2004 0.21 % in 2005 comments Produced in Germany, Spain, France, Sweden, Hungary, Poland and Latvia7 8 9 1011 12 13 14 15 16 17 18 19 20 21

Phenomenon Impact of biotechnology on revenues

Impact of biotechnology on production costs

Production costs ratio fuel bioethanol/liquid fuels

2.5 (2004) on basis of litres or 3.7 on basis of gasoline equivalent In 2005: 1.6 and 2.3, resp. 650,000/year (2003 and 2004)

Impact of biotechnology on revenues

Revenues per biotech active em-

22 23 24 25 26 27

7 http://www.iea.org/dbtw-wpd/Textbase/stats/oildata.asp?country=European+Union+ %2D+ 25&SubmitA=Submit&COUNTRY_LONG_NAME=European %20Union %20- %2025 8 Promoting Biofuels in Europe (http://ec.europa.eu/energy/res/publications/doc/ 2004_brochure_biofuels_en.pdf), accessed 28-5-2006 9 http://www.biocap.ca/rif/report/Walburger_A.pdf 10 Schnepf, R. (2006) European Union Biofuels Policy and Agriculture: an overview. CSR Report for Congress, order code RS22404 11 Hackworth, J. and J. Shore (2005) Distillate in Depth The supply, demand, and price picture. Presented at Winter Fuels Conference. Oct 12, 2005 (http://www.naseo.org/Events/winterfuels/2005/presentations/Hackworth.pdf) 12 F.O. Lights World Ethanol and Biofuels Report 4(5) Nov. 9, 2005 13 F.O. Lights World Ethanol and Biofuels Report 2(15) April 13, 2004 14 IEA Key World Energy Statistics 2005 15 Renews issue 3, February 2005, European Commission 16 F.O. Lights World Ethanol & Biofuels Report 4(3) Oct. 10, 2005 17 IFP Panorama 2004; A look at Biofuels in Europe 18 Bhme W. (2006) Position of the Mineral Oil Industry to Ethanol; 2nd European Bioethanol Technology Meeting 2006; April 25-26, 2006, Detmold, Germany 19 Sen, T. (2006) Bioethanol Production Large Scale or Regional Plants?; 2nd European Bioethanol Technology Meeting 2006; April 25-26, 2006, Detmold, Germany 20 F.O. Lights World Ethanol and Biofuels Report 4(9) January 10, 2006 21 http://leeds-faculty.colorado.edu/lawrence/bcor4000/Lectures/Ethanol %20Energy.ppt. 22 Turley, D., Ceddia, G., Bullard, M. & D. Martin (2003) Liquid biofuels industry support, cost of carbon savings and agricultural implications. Prepared for Defra (UK) 23 personal communication K. Werling (Agroetanol, Sweden; June 2006) 24 F.O. Lights World Ethanol and Biofuels Report 4(5) Nov. 9, 2005 25 Promoting Biofuels in Europe (http://ec.europa.eu/energy/res/publications/doc/ 2004_brochure_biofuels_en.pdf), accessed 28-5-2006 26 http://www.biocap.ca/rif/report/Walburger_A.pdf


Phenomenon per employee

indicator ployee in bioethanol industry Revenue per employee in fossil liquid fuel industry

value 800,000/year (2005) 5,300,000/year (2005)

comments

Average of information on employees and production volumes 28 29 30 3132 33 34 35 Prices

Impact of biotechnology on job creation

Number of jobs created through bioethanol: direct effect Number of jobs created through bioethanol: indirect effect

293 (2004) 525 (2005)

36 37

5000 (2005)

38 39

27 Biofuels for Transportation (2006) Worldwatch Institute, Washingtonne, D.C. 28 http://www.laia.com/conoco.asp, accessed 7-6-2006 29 http://www.hoovers.com/western-refining,-inc./--ID_141020--/free-co-factsheet.xhtml, accessed 7-62006 30 http://www.tesoropetroleum.com/stellent/groups/public/documents/published/tsi_bus_ref_ t3_anacortes. hcsp, accessed 7-6-2006 31 http://www.tesoropetroleum.com/stellent/groups/public/documents/published/tsi_bus_ref_ t3_kapolei.hcsp, accessed 7-6-2006 32 http://www2.exxonmobil.com/Benelux-English/About/Bnl_CI_BG_AnterwepRefinery.asp 33 http://www.mcilvainecompany.com/industryforecast/refineries/overview/spec %20refinery %20act.htm, accessed 8-6-2006 34 IEA Key World Energy Statistics 2005 35 Renews issue 3, February 2005, European Commission 36 Turley, D., Ceddia, G., Bullard, M. & D. Martin (2003) Liquid biofuels industry support, cost of carbon savings and agricultural implications. Prepared for Defra (UK) 37 personal communication K. Werling (Agroetanol, Sweden; June 2006) 38 Turley, D., Ceddia, G., Bullard, M. & D. Martin (2003) Liquid biofuels industry support, cost of carbon savings and agricultural implications. Prepared for Defra (UK) 39 White Biotechnology: Opportunities for Germany; Position Paper of Dechema e.V.; Nov 2004


The share of ethanol in total liquid fuel (gasoline, diesel, kerosene, biodiesel, bioethanol) production was 0.21 % in the EU25 in 2005. Although this figure seems low, it represents an amount of 427 million euro40 41 42 43. This share is far away from the EU25 consumption guidelines of 5.75 % biofuel share in 2010. That goal mainly has to be reached by biodiesel and bioethanol. Since Europe consumes more diesel than gasoline44, the future share of bioethanol in 2010 may be about 2.5 %, an order of magnitude higher than the present production. Different scenarios exist how bioethanol and biodiesel contribute to this 5.75 %, depending on the use of set aside land area, import of feed stocks and feed stock price development45. One scenario calculates with the fact that in 2012 the demand for diesel is 2 times larger than the demand for gasoline, which will also reflect a higher biodiesel demand compared with bioethanol demand. A second scenario in which less import of feed stock takes place predicts that it will be more difficult to produce biodiesel than bioethanol46. In 2004 Spain had the largest revenues in fuel bioethanol production, followed by France. Sweden, Poland, Germany, Hungary and Latvia also produce large amounts of fuel bioethanol47. In 2005, the EU25 had 16 large fuel bioethanol factories, mainly converting starch from wheat. In addition, hundreds of farm scale ethanol producers are active, with central distilleries. In 2005 750,000 tonnes of fuel bioethanol were produced in the EU25. The production costs of bioethanol are higher than that of gasoline and diesel. In the EU25 the production costs of bioethanol from wheat amounted 0.53/l (2005) (Bhme 200648; Sen 200649) 50. For your information: lower estimations ( 0.42/l) exist51. 0.53/l includes the credits gained from co-product revenues. The most important co-products from bioethanol production from wheat are dried distillers grain and solubles (DDGS). Revenues of DDGS can be 12 % of the total revenues of a bioethanol factory52. The production of gasoline costs 1.6 times less per litre (at US$ 50 per barrel crude oil). Since a litre of ethanol contains less energy (67 %) than a litre of gasoline, the production costs of bioethanol on basis of gasoline equivalents are even 2.3 higher than that of gasoline. In 2004 the production cost ratio bioethanol/gasoline was higher: 2.5, or 3.7 on gasoline equivalent basis. The reason for the difference between 2004 and 2005 is the strong increase of gasoline production costs caused by higher crude oil prices. In order to stimulate consumers to use gasoline with added ethanol, the production cost (and price) difference between bioethanol and gasoline is compensated by tax exemptions. In this way the EU25 accepts the higher costs connected to driving on biofuels, in exchange for environmental benefits.

40 Promoting Biofuels in Europe (http://ec.europa.eu/energy/res/publications/doc/ 2004_brochure_biofuels_en.pdf), accessed 28-5-2006 41 http://www.biocap.ca/rif/report/Walburger_A.pdf 42 F.O. Lights World Ethanol and Biofuels Report 2(15) April 13, 2004 43 Biofuels for Transportation (2006) Worldwatch Institute, Washingtonne, D.C. 44 Bhme W. (2006) Position of the Mineral Oil Industry to Ethanol; 2nd European Bioethanol Technology Meeting 2006; April 25-26, 2006, Detmold, Germany 45 Well-to-Wheels analysis of the future automotive fuels and powertrains in the European context (2006); Version 2b; EC-DG JRC, Concawe, Eucar 46 Well-to-Wheels analysis of the future automotive fuels and powertrains in the European context (2006); Version 2b; EC-DG JRC, Concawe, Eucar 47 http://www.biocap.ca/rif/report/Walburger_A.pdf 48 Bhme W. (2006) Position of the Mineral Oil Industry to Ethanol; 2nd European Bioethanol Technology Meeting 2006; April 25-26, 2006, Detmold, Germany 49 Sen, T. (2006) Bioethanol Production Large Scale or Regional Plants?; 2nd European Bioethanol Technology Meeting 2006; April 25-26, 2006, Detmold, Germany 50 F.O. Lights World Ethanol and Biofuels Report 4(9) January 10, 2006 51 personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-6-2006) 52 personal communication K. Werling (Agroetanol, Sweden; June 2006)


Another dramatic difference between bioethanol production and fossil fuel production are the revenues per employee. The annual revenues per employee amount to 650,000 (2003, 2004) and 800,000 (2005) in bioethanol factories and 5,300,000 in oil refineries. The reason is the enormous size of oil refineries and the economy of scale reached, as compared to bioethanol factories. The average European oil refinery produces almost 6 million tonnes fuel per year53 54, while the average European bioethanol factory operates in the 100,000 tonnes/year range. Although the size of bioethanol factories may grow as a result of higher confidence in return of investments, the ultimate size will be limited by a need for decentralisation of the production due to transportation costs of voluminous raw materials (such as wheat) from agricultural fields to the factory. In 2005, 525 jobs had been created in bioethanol factories and another 5000 indirect jobs in agriculture, transportation and fuel blending. The replacement of gasoline by bioethanol will net create more jobs in the EU25 territory. The number of employees working at EU25 oil refineries is estimated 40,00055 56 57 58 59 60 6162. In the next 5 years the amount of bioethanol produced will increase tremendously. Already the amount has been increased since 2004 due to the start up of several new large bioethanol plants in Germany, Spain and France. Plans have been made in several other EU25 countries to construct bioethanol plants (e. g. Belgium, the Netherlands). According to Kenneth Werling63 the amount of bioethanol produced in the EU25 may triple the coming 5 years, or according to Robert Vierhout quadruplicate64. The EU production of fossil fuels is growing with 2 % each year (Hackworth &Shore 2005)65, but may level off because a lower demand caused by price increases. Therefore, the share of bioethanol in liquid fuel may grow beyond 1 %. In Sweden expansion of the bioethanol production will depend on an EU mandate to use a higher blending than 5 %, e. g. 10 %66. If that is allowed, then secure financing of new ethanol factories is possible.

53 http://www.iea.org/dbtw-wpd/Textbase/stats/oildata.asp?country=European+Union+ %2D+ 25&SubmitA=Submit&COUNTRY_LONG_NAME=European %20Union %20- %2025 54 http://www.iea.org/textbase/papers/2005/IEA_Refinery_Study.pdf, accessed 28-5-2006 55 http://www.laia.com/conoco.asp, accessed 7-6-2006 56 http://www.hoovers.com/western-refining,-inc./--ID_141020--/free-co-factsheet.xhtml, accessed 7-62006 57 http://www.tesoropetroleum.com/stellent/groups/public/documents/published/tsi_bus_ref_ t3_anacortes.hcsp, accessed 7-6-2006 58 http://www.tesoropetroleum.com/stellent/groups/public/documents/published/tsi_bus_ref_ t3_kapolei.hcsp, accessed 7-6-2006 59 http://www2.exxonmobil.com/Benelux-English/About/Bnl_CI_BG_AnterwepRefinery.asp 60 http://www.mcilvainecompany.com/industryforecast/refineries/overview/spec %20refinery %20act.htm, accessed 8-6-2006 61 http://www2.exxonmobil.com/Benelux-English/About/Bnl_CI_NL_RdamRefinery.asp, accessed 8-62006 62 Only employees that work at fossil oil refineries were considered. These employees also produce ETBE from bioethanol but do not produce bioethanol. If bioethanol is produced by an oil company, it does not take place in the oil refinery. 63 personal communication K. Werling (Agroetanol, Sweden; June 2006) 64 personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-6-2006) 65 Hackworth, J. and J. Shore (2005) Distillate in Depth The supply, demand, and price picture. Presented at Winter Fuels Conference. Oct 12, 2005 (http://www.naseo.org/Events/winterfuels/2005/presentations/Hackworth.pdf) 66 personal communication K. Werling (Agroetanol, Sweden; June 2006)


The production costs are expected to slightly increase the coming 5 years, due to the increase of the price of wheat67. The explanation for this increase is a higher demand for wheat, caused by the bioethanol factories. As a reaction, new low costs raw materials will become more attractive. In several European countries R&D is carried out to use lignocellulosic material (wood, straw and grass) for the production of bioethanol, and in Sweden a pilot plant for a daily production of 500 l bioethanol from (wood) saw dust is running. The application of modern biotechnology is a crucial factor in its success: genetically modified yeasts able to simultaneously convert various monosaccharides have been and are developed. Although the ligno-cellulosic materials are cheaper68, the pre-treatment and conversion costs are higher, and different opinions exists whether this development will lead to a low cost bioethanol production process69 70 71 (Groenestijn et al 2006)72. The EU15 (2002) prices for wheat were 120/tonne, while wood ranged between 33 and 99 per tonne and straw cost 51/tonne73. Dutch Staatsbosbeheer (Dutch State Forest Management) indicates prices of 25/tonne chipped wood and 0/tonne grass74. Estimations of the future production costs of ethanol from cellulose crops in the EU range between 0.20 and 0.55 per litre75 76 77 (Groenestijn et al 2006)78. However, the gasoline production costs may also increase within the next 5 years as well. If the bioethanol production in the EU25 will have a share of 1 % in liquid fuel production within 5 years, the number of jobs created in bioethanol plants will be 1600 and the indirect jobs 20,000, as has been extrapolated from the data above.

2.4.1.2

Summary of impact in USA, Japan and Brazil

The economic impacts of bioethanol production on the USA and Brazil are magnitudes higher than that on the EU25. In the period 2003-2005, the share of fuel bioethanol revenues out of total liquid fuel revenues in the USA ranged between 1.7 % and 2 % and in Brazil 10 %-13 %. In Japan no fuel bioethanol is produced. One of the reasons of the high production in the USA and Brazil are the lower bioethanol production costs. The ratio of production costs fuel bioethanol/liquid fuels in the USA is 1.0 on litre basis (2005) (Bhme 2006)79 and in Brazil 0.5 on litre basis (0.8 on basis of litre gasoline equivalents) (2005) (Pilgrim 2006)80 81. The driving67 personal communication K. Werling (Agroetanol, Sweden; June 2006) 68 International Resource Costs for Biodiesel and Bioethanol (2002) UK Department for Transport 69 personal communication K. Werling (Agroetanol, Sweden; June 2006) 70 Biofuels for Transportation (2006) Worldwatch Institute, Washingtonne, D.C. 71 IBUS (Integrated Biomass Utilisation System); www.bioethanol.info 72 Groenestijn, J.W. van, Hazewinkel, J.H.O., & R. Bakker (2006) Pre-treatment of ligno-cellulose with biological acid recyling (the Biosulfurol Process). In Proceedings World Bioenergy Conference, May 30 June 1, 2006, Jnkping, Sweden 73 International Resource Costs for Biodiesel and Bioethanol (2002) UK Department for Transport 74 Personal communication with Rudy van Hedel from Staatsbosbeheer (Dutch State Forest Management) 75 personal communication K. Werling (Agroetanol, Sweden; June 2006) 76 Biofuels for Transportation (2006) Worldwatch Institute, Washingtonne, D.C. 77 IBUS (Integrated Biomass Utilisation System); www.bioethanol.info 78 Groenestijn, J.W. van, Hazewinkel, J.H.O., & R. Bakker (2006) Pre-treatment of ligno-cellulose with biological acid recyling (the Biosulfurol Process). In Proceedings World Bioenergy Conference, May 30 June 1, 2006, Jnkping, Sweden 79 Bhme W. (2006) Position of the Mineral Oil Industry to Ethanol; 2nd European Bioethanol Technology Meeting 2006; April 25-26, 2006, Detmold, Germany 80 Pilgrim C. (2006) The Effect of a Novel Protease on Ethanol Fermentation of Whole Ground Grains and Endosperm; 2nd European Bioethanol Technology Meeting 2006; April 25-26, 2006, Detmold, Germany


factors to use bioethanol in the USA are: corn farmers interests, independence of oil and replacement of the toxic MTBE by bioethanol in gasoline. The revenues per employee in bioethanol factories in USA are slightly lower than that in the EU25, whereas this parameter is much lower in Brazil ( 173,000/employee in 2004), which, besides the smaller production units and lower production costs, may be due to a relative higher use of low salary employees. The impact of job creation in Brazil is two orders of magnitude higher than the impact in the EU25: 12,000 jobs have been created in bioethanol factories, while it is estimated that 700,000 jobs have been created in rural areas to support the additional sugar cane and bioethanol industry82. In the USA 10,000 jobs have been created in bioethanol plants, while it supported the creation of 155,000 jobs in all sectors of the economy, including more than 19,000 jobs in Americas manufacturing sector83. Note that the US estimation on indirect job creation is more optimistic than the European estimations. According to the estimations of Kenneth Werling84 and Robert Vierhout85 the bioethanol production in the USA will double the next 5 years (supported by Herrera 2006)86, while in Brazil the production will increase only 20 %. This relatively small increase of 20 % would be due to limited land area available for extension of the sugar cane fields. However, in Brazil a more optimistic view exists on extension of its bioethanol industry87. In addition, Brazils production is limited to its internal market. Export development is uncertain, with Asia as the most promising customers. Japan is planning to introduce ETBE in its gasoline in 201088, but national bioethanol production facilities the coming next year are not expected89 90. The USA has been ahead of Europe in technological development in the field of bioethanol, but Europe is now catching up91.

2.4.2

Social impact

An important social impact of bioethanol production is the development of wealth and jobs in rural areas. A large part of the indirect job creation takes place in agriculture. If the employment effect of gasoline production is compared with that of bioethanol production: the latter requires the cultivation of crops. In addition, bioethanol factories are mostly built in agricultural regions. The use of wheat as a raw material (which has been made possible by modern biotechnology: the use of amylases from genetically modified microorganisms) is a blessing for areas that have been produced this crop in a long tradition (e. g. the northern part of France). The margins and markets for wheat producers have been under pressure, but due to the creation of a new market (bioethanol) wheat farms can survive again. The outlooks for the next 5 years are promising: the ethanol market will strongly increase which leads to a growing demand for wheat and higher prices for this crop. R&D on the use of wheat straw for the production of bioethanol may lead to another improvement of the situation of the farmers.81 F.O. Lights World Ethanol and Biofuels Report 3(5) Nov., 2004 82 IEA Biofuels for transport an international perspective 83 Ethanol Industry Outlook 2006 From Niche to Nation RFA (USA), Feb 2006 84 personal communication K. Werling (Agroetanol, Sweden; June 2006) 85 personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-6-2006) 86 Herrera, S. (2006) Bonkers about biofuels; Nature Biotechnology: 2497): 755-760 87 World Bioenergy Conference, Jonkping, Sweden, May 30 June 1; figures presented by Cortez 88 AMFI Newsletter, Jan. 2006 89 personal communication K. Werling (Agroetanol, Sweden; June 2006) 90 personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-6-2006) 91 personal communication K. Werling (Agroetanol, Sweden; June 2006)


The situation is similar for the USA. The pronounced strong increase in ethanol production will not only make the USA less dependent on oil but also will be beneficial for the corn farmers in the Mid-West. Bioethanol will not save the European wine producers. The recovery of fuel ethanol from surplus wine should be considered as a temporary measure and not as a new market: the value of fuel ethanol is much lower than the value of wine. Grapes are not a good energy crop. A second social effect of a bioethanol production and use within the EU25 is the energy supply security. The present dependence of the EU25 on a limited number of crude oil suppliers is felt as a risk and as an unsafe and unsustainable situation. This feeling creates tension between people, internationally and nationally. It is one of the reasons why Sweden is number one in Europe with respect to the implementation of biofuels: it is planning to be independent of foreign oil supplies by the year 2020.

2.4.32.4.3.1Table 2-2:

Environmental impactImpact on EU levelOverall EU environmental indicators indicator Reduction of the use of non-renewable sources value 158,000 tonne oil equivalent Comments 0.31 MJ fossil fuel is saved by producing 1 MJ ethanol from corn, compared to I MJ gasoline; from production of corn to the use in cars (Farrel et al 2006)92. 2005 As calculated for corn and wheat production, ethanol production and use in cars 93. 2005

Phenomenon Environmental impact

Reduction of CO2 emission by production and use of bioethanol instead of gasoline

0.75 million tonnes (corn) 0.70 million tonnes (wheat)

Replacing 1 MJ of gasoline by 1 MJ of ethanol saves 0.31 MJ fossil fuel. The cultivation of corn and the production of bioethanol from corn together use 0.79 MJ fossil fuels in form of gasoline, coal and natural gas. For the recovery of crude oil and the refining process an additional 0.1 MJ of fossil fuels are used as energy source apart from the 1 MJ produced (Farrel et al 2006)94. The difference is 0.31 MJ. The amount of oil equivalents saved in the EU25 is calculated from the amount of fuel bioethanol produced, the lower heating values of ethanol and gasoline (MJ/kg) and the factor 0.31. In 2005 the amount was 158,000 tonnes. The EU25 is preparing for the use of ligno-cellulosic biomass as a raw material for bioethanol production, the so called second generation bioethanol production. Besides a possible cost reduction, another reason exists to shift from first to second generation production. This is the92 Farrel, A.E., Plevin, R.J., Turner, B.T., Jones, A.D., OHare, M. & D.M. Kammen (2006) Ethanol can contribute to energy and environmental goals. Science 311:506-508 93 IEA Biofuels for transport an international perspective 94 Farrel, A.E., Plevin, R.J., Turner, B.T., Jones, A.D., OHare, M. & D.M. Kammen (2006) Ethanol can contribute to energy and environmental goals. Science 311:506-508


amount of fossil fuel saved per MJ bioethanol produced from cellulosic biomass which is substantially higher: 0.9 MJ higher than the first generation (Farrel et al 2006)95. The EU15 has ratified the Kyoto Protocol which says that in the year 2008-2012 greenhouse gas emission should be 5 % below the reference year 199096. The EU15 emitted 3,137 million tonnes CO2 in 1990 and the trend will lead to a 3,310 million tonnes emission in 201297. Therefore, the EU15 has to make an effort to reduce CO2 emission with 330 million tonnes. In 2007 the contribution of bioethanol produced in the EU25 countries was only 0.7 million tonnes98. The expectations are that bioethanol production will increase an order of magnitude by 2012. The Well-to-Wheels future analyses carried out by the EU predicts that it should be possible to produce 8.6 million tonnes of bioethanol in the EU in 2012 if more set aside land area is used for wheat production99. By shifting the raw material from wheat to wood, grass and straw, another factor 3 can be gained in CO2 emission reduction (Farrel et al 2006)100. EEA has calculated that in 2010 significant amounts of biomass will be available in the EU to support ambitious renewable energy targets in 2020, 2020 and 2030, even after environmental constraints are taken into account. In 2010 175 million tonnes primary biomass will be available from agriculture, forestry and in form of waste101. 2500 litres of bioethanol can be produced annually from wheat per ha of land102. For the future production of 8.6 million tonnes of bioethanol solely from wheat, using conventional technologies, 44 million ha of land area is required in the EU25 (more than the total area of Germany). The crops used for bioethanol production are not (yet) genetically modified. But such modern biotechnological approach may also help to create more CO2 reduction per MJ ethanol produced in case crops are used which cultivation needs less energy and fertilisers. This can be seen as a future opportunity. Nielsen & Wenzel (2005)103 quantified other environmental effects of the whole chain of corn production, bioethanol production, intermediate transportation and use of bioethanol in cars and compared it with the production and use of gasoline. The environmental effect of driving 1.6 km (one mile) was calculated for cars fuelled with gasoline and flexible fuel vehicles fuelled with E85.

The effect on global warming is determined by CO2 and N2O (which is released by cropland). One mile driving on gasoline caused the emission of 0.53 kg CO2 equivalent, while one mile driving on E85 0.36 kg CO2 equivalent.

The effect of acidification is determined by SO2 (by fuel burning) and NH3 (produced fromfertilisers). One mile driving on gasoline caused the emission of 1.1 g SO2 equivalent, while one mile driving on E85 2 g SO2 equivalent.

95 Farrel, A.E., Plevin, R.J., Turner, B.T., Jones, A.D., OHare, M. & D.M. Kammen (2006) Ethanol can contribute to energy and environmental goals. Science 311:506-508 96 www.peakoil.net/IWOOD2002/ppt/pptRR.ppt 97 http://www.oecd.org/dataoecd/39/8/1923119.pdf 98 IEA Biofuels for transport an international perspective 99 Well-to-Wheels analysis of the future automotive fuels and powertrains in the European context (2006); Version 2b; EC-DG JRC, Concawe, Eucar 100 Farrel, A.E., Plevin, R.J., Turner, B.T., Jones, A.D., OHare, M. & D.M. Kammen (2006) Ethanol can contribute to energy and environmental goals. Science 311:506-508 101 EEA Briefing (2005) (02) How much biomass can Europe use without harming the environment?; European Environment Agency 102 Biofuels for Transportation (2006) Worldwatch Institute, Washingtonne, D.C. 103 Nielsen, P.H. and H. Wenzel (2005) Environmental assessment of ethanol produced from corn starch and used as an alternative to conventional gasoline for car driving. The Institute for Product Development; Technical University of Denmark


The effect of nutrient enrichment is determined by the amounts of phosphate and nitratereleased in the soil. One mile driving on gasoline caused the emission of 0.1 g PO4 equivalent, while one mile driving on E85 1.7 g PO4 equivalent.

Photochemical ozone formation is caused by the emission of NOx and volatile organic

compounds. One mile driving on gasoline caused the emission of 0.58 g ethylene equivalent, while one mile driving on E85 0.2 g ethylene equivalent.

Shifting from gasoline to E85 will reduce global warming and photochemical ozone formation, but will increase acidification and soil nutrient enrichment. The run off of pesticides and herbicides from corn fields is another adverse environmental effect connected to bioethanol production104. However, modern biotechnology can also solve these problems, e. g. the use of Bacillus thuringiensis toxins instead of chemical pesticides.

2.4.3.2

Summary of impact in USA, Japan and Brazil

Due to the higher bioethanol production volumes in the USA, the reduction of the use of nonrenewable sources by the shift from gasoline production and use to bioethanol production and use amounted 2,180,000 tonne oil equivalents in 2005 (Farrel et al 2006)105. In Brazil the amount of non-renewables saved are considerably higher106. In the USA a much higher reduction in CO2 emission is attained (14 million tonnes in 2004) as compared to Europe. As a result of the efficient use of sugar cane in bioethanol production (the co-product is used as fuel in the factories) the reduction of CO2 emission in the chain sugar cane production to use in cars amounted 33 million tonnes in 2005 in Brazil, based on bioethanol production figures, almost 50 times higher than in the EU25107. As in 2004 Brazil exported 16 % of its produced ethanol, the CO2 emission reduction has an international character108 109. Japan does not produce ethanol and the use of ethanol in car fuels is only in an experimental stage. With a predicted duplication of bioethanol production in the USA, the next 5 years, environmental benefits will proportionally increase as well, staying ahead of the EU25 all the time. In the USA R&D is carried out to use ligno-cellulosic biomass, particular corn stover, as a raw material, but for the coming years an increase in the use of corn has a higher priority. In the latest US Energy Bill R&D and pilots for the use of ligno-cellulose are strongly stimulated with funds110. Bioethanol production will increase in Brazil as well, but presumably less fast than in the USA. Japan is not planning to start fuel bioethanol production the coming 5 years, but ETBE, made from imported ethanol will be introduced in 2010111.

2.5

Summary and Conclusions

The fermentative production of ethanol is one of the oldest biotechnology activities with a history of thousands years. It still holds a number one position in industrial fermentation with respect to volumes produced, which implies a significant impact on society. The production of bioethanol has got a boost by an increased demand of renewable energy sources and by104 Bioethanol needs biotech now (2006) Nature Biotechnology: 24(7):725 105 Farrel, A.E., Plevin, R.J., Turner, B.T., Jones, A.D., OHare, M. & D.M. Kammen (2006) Ethanol can contribute to energy and environmental goals. Science 311:506-508 106 IEA Biofuels for transport an international perspective 107 IEA Biofuels for transport an international perspective 108 F.O. Lights World Ethanol and Biofuels Report 4(4) Oct. 25, 2005 109 F.O. Lights World Ethanol and Biofuels Report 4(2) Sept 27, 2005 110 personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-6-2006) 111 AMFI Newsletter, Jan. 2006


developments in modern biotechnology. Many countries all over the world have decided to limit the emission of greenhouse gases, CO2 being the most important, and the use of biofuels produced from renewable sources is one of the measures being implemented in several world regions. The EU has formulated a guideline of 5.75 % biofuel share in transportation fuels by 2010. In Europe the use of biodiesel and ethanol (in a few countries incorporated in ETBE as a replacement of MTBE in gasoline) are most promising to reach the EU demands. In Europe bioethanol is mainly produced from wheat. The cost-efficient production of bioethanol from wheat starch has been made possible by modern biotechnology. The required enzymes (amylases) for the conversion of starch into glucose (the substrate for ethanol producing yeasts), can now be purchased at low prices due to the efficient production of amylases by genetically modified microorganisms in large scale fermentations. Fuel ethanol biotechnologically produced from renewable organic matter is the subject of this study. The purpose of this case study is to quantify the importance of bioethanol in liquid fuel production and job creation, and to assess the effect on fuel production costs. The situation in the EU25 will be compared with that in the USA, Japan and Brazil. Further, the effect on the use of non-renewable sources and CO2 emission will be quantified and compared in world regions. A prediction how these effects will develop in the next five years will be given. The social impact will be described qualitatively.

2.5.1

Significance of the impact

Economic impact The share of ethanol in total liquid fuel production was 0.21 % in the EU25 in 2005. Although this figure seems low, it represents an amount of 192 million euro. This share is far away from the EU25 consumption guidelines of 5.75 % biofuel share in 2010. That goal mainly has to be reached by biodiesel and bioethanol. Since Europe consumes more diesel than gasoline, the future share of bioethanol in 2010 may be between 1 % and 2 %, an order of magnitude higher than the present production. In 2004 Spain had the largest revenues in fuel bioethanol production, with a share of 48 % of the EU bioethanol production volume, followed by France (19 % share). Sweden (14 %), Poland (9 %), Germany (5 %), Hungary and Latvia (2 %) also produce large amounts of fuel bioethanol. In 2005, the EU25 had 16 large fuel bioethanol factories, mainly converting starch from wheat. In addition, hundreds of farm scale ethanol producers are active, with central distilleries. In 2004 419,000 tonnes of fuel bioethanol were produced in the EU25 and in 2005 750,000 tonnes. The production costs of bioethanol are higher than that of gasoline and diesel. In the EU25 the production costs of bioethanol from wheat amounted 0.53/l (2005). The production of gasoline costs 1.6 times less per litre. Since a litre of ethanol contains less energy (67 %) than a litre of gasoline, the production costs of bioethanol on basis of gasoline equivalents are even 2.3 higher than that of gasoline. In order to stimulate consumers to use gasoline with added ethanol, the production cost (and price) difference between bioethanol and gasoline is compensated by tax exemptions. This way the EU25 accepts the higher costs connected to driving on biofuels, in exchange for environmental benefits. Another dramatic difference between bioethanol production and fossil fuel production are the revenues per employee. The annual revenues amount to 800,000 (2005) in bioethanol factories and 5,300,000 in oil refineries. The reason is the enormous size of oil refineries and the economy of scale reached, as compared to bioethanol factories. The average European oil refinery produces almost 6 million tonnes fuel per year, while the average European bioethanol factory operates in the 50,000 tonnes/year range. Although the size of bioethanol factories may grow as a result of higher confidence in return of investments, the ultimate size will be limited by a need for decentralisation of the production due to transportation costs of voluminous raw materials (such as wheat) from agricultural fields to the factory.


In 2005 about 525 jobs had been created in bioethanol factories and another 5000 indirect jobs in agriculture, transportation and fuel blending. The replacement of gasoline by bioethanol will net create more jobs in the EU25 territory. The number of employees working at the EU25 oil refineries is estimated 40,000. Social impact An important social impact of bioethanol production is the development of wealth and jobs in rural areas. A large part of the indirect job creation takes place in agriculture. In addition, bioethanol factories are mostly built in agricultural regions. The use of wheat as a raw material (which has been made possible by modern biotechnology: the use of amylases from genetically modified microorganisms) is very advantageous for areas that have been produced this crop in a long tradition (e. g. the northern part of France). The margins and markets for wheat producers have been under pressure, but due to the creation of a new market (bioethanol) wheat farms can survive again. A second social effect of a bioethanol production and use within the EU25 is a feeling that a start has been made towards a lower dependency. The present dependence of the EU25 on a limited number of crude oil suppliers is felt as a risk and as an unsafe and unsustainable situation. Environmental impact Replacing 1 MJ of gasoline by 1 MJ of ethanol saves 0.31 MJ fossil fuel, a number that includes energy used in crop production and crude oil recovery, the production process and the use in cars. The amount of oil equivalents saved in the EU25 in 2005 was 158,000 tonnes. The EU15 has ratified the Kyoto Protocol in which in the year 2008-2012 greenhouse gas emission should be 5 % below the reference year 1990. The EU15 emitted 3,137 million tonnes CO2 in 1990 and the trend is a 3,310 million tonnes emission in 2012. Therefore, the EU15 has to make an effort to reduce CO2 emission with 330 million tonnes. In 2005 the contribution of bioethanol produced in the EU25 countries to CO2 emission reduction was only 0.7 million tonnes.

2.5.2

EU/non-EU comparison

The impacts of bioethanol production on the USA and Brazil are magnitudes higher than that on the EU25. The share of fuel bioethanol revenues out of total liquid fuel revenues in Europe dropped from 0.15 % (2003) to 0.14 % (2004). In the USA it rose between 1.7 % (2003) and 2 % (2005) and in Brazil from 10 % (2003) to 13 % (2005). In Japan no fuel bioethanol is produced. One of the reasons of the high production volumes and revenues in the USA and Brazil are the lower bioethanol production costs. The ratio of production costs fuel bioethanol/liquid fuels in the USA is 1.0 on litre basis (2005) and in Brazil 0.5 on litre basis (0.8 on basis of litre gasoline equivalents) (2005). Revenues per employee in bioethanol factories in USA are slightly lower than in the EU25, whereas this parameter is much lower in Brazil ( 173,000/employee in 2004), which, besides the smaller production units and lower production costs, may be due to a relative higher use of low salary employees. The impact of job creation in Brazil is two orders of magnitude higher than the impact in the EU25: 12,000 jobs have been created in bioethanol factories, while it is estimated that 700,000 jobs have been created in rural areas to support the additional sugar cane and bioethanol industry. In the USA 5760 jobs have been created in bioethanol plants, while it supported the creation of 153,725 jobs in all sectors of the economy, including more than 19,000 jobs in Americas manufacturing sector (estimation made in February 2006). Note that the US estimation on indirect job creation is more optimistic than the European estimation (the ratio indirect jobs / production volume is higher in the USA).


Although bioethanol stimulation by tax exemption varies between states in the USA, in the EU25 the situation is even more complex. Due to the relative high price of bioethanol in the EU, tax exemptions are required for a certain period. However, most countries in the EU do not stimulate the use of bioethanol with tax exemptions. In the EU some Member States are running ahead of the EU25 with respect to government regaulations directed to the stimulation of the use of bioethanol as a fuel. France and UK have strict obligations for the oil companies to offer certain blends in an ever higher percentage every year. The Netherlands and Germany start obligations in 2007. In Hungary and Italy an ethanol obligation has been developed as well. Furthermore, the countries that are ahead in bioethanol use are hindered by the fact that EU does not allow more than 5 % ethanol to mix in all gasoline pumps. In the USA 10 % is allowed and in Brazil 25 %. That is a decision of European decision makers. Experts112 113 argue that another way the EU can stimulate the use of bioethanol, is a larger support for energy crop production (including wheat). According to the US Energy Bill114 bioethanol production will be stimulated by

Application goals for 2012 Funds, e. g. to do pilot plant test using ligno-cellulosic biomass Incentives to use ligno-cellulose as raw material (the environmental value will be definedas 2.5 times higher than that of corn-based ethanol). Experts115 116 argue that the EU could introduce similar measures. The USA has been ahead of Europe in technological development in the field of bioethanol (more experience in first generation bioethanol production and a large R&D working force on second generation bioethanol production), but Europe is now catching up117. The social impact defined for the EU25 is also true for the USA. The pronounced strong increase in ethanol production not only make the USA less dependent on oil, but also will be beneficial for the corn farmers in the Mid-West. Due to the higher bioethanol production volumes in the USA, the reduction of the use of nonrenewable sources by the shift from gasoline production and use to bioethanol production and use amounted 3 million tonne oil equivalents in 2005. In Brazil the amount of non-renewables saved are considerably higher. In the USA a much higher reduction in CO2 emission is attained (14 million tonnes in 2004) as compared to Europe. As a result of the efficient use of sugar cane in bioethanol production (the co-product is used as fuel in the factories) the reduction of CO2 emission in the chain sugar cane production to use in cars amounted 33 million tonnes in 2005 in Brazil, based on bioethanol production figures, almost hundred times higher than in the EU25. As in 2004 Brazil exported 16 % of its produced ethanol, the CO2 emission reduction has an international character. Japan does not produce ethanol and the use of ethanol in cars is only in an experimental stage.

112 personal communication K. Werling (Agroetanol, Sweden; June 2006) 113 personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-6-2006) 114 Energy Policy Act of 2005; Public Law 109-58- Aug. 8. 2005; 42 USC 15801 note 115 personal communication K. Werling (Agroetanol, Sweden; June 2006) 116 personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-6-2006) 117 personal communication K. Werling (Agroetanol, Sweden; June 2006)


2.5.3

Outlook

The next 5 years the amount of bioethanol produced will increase tremendously. Already the amount has been increased since 2004 due to the start up of several new large bioethanol plants in Germany, Spain and France. The production of bioethanol in the EU25 is estimated near 1 million tonnes. Plans have been made in several other EU25 countries to construct bioethanol plants (e. g. Belgium, the Netherlands). The amount of bioethanol produced in the EU25 may triple the coming 5 years118 119 120. Therefore, together with the increases between 2004-2006, the share of bioethanol in liquid fuel may grow beyond 1 % in the next 5 years. In Sweden expansion of the bioethanol production will depend on an EU mandate to use a higher blending than 5 %, e. g. 10 %. If that is allowed, the cost/benefit ratio will become positive and it is feasible to run ethanol factories in Sweden 121. The bioethanol production in the USA will double the next 5 years122 123 (Herrera 2006)124, while in Brazil the production will increase with a lower factor125. This smaller increase would be due to limited land area available for extension of the sugar cane fields and uncertainties on the export opportunities. Japan is planning to introduce ETBE in its gasoline in 2010, but an own bioethanol production the coming next year is not expected126 127. The production costs are expected to slightly increase the coming 5 years, due to the increase of the price of wheat. The explanation for this increase is a higher demand for wheat, caused by the bioethanol factories128 129. As a reaction, new low costs raw materials will become more attractive. In several European countries R&D is carried out to use lignocellulosic material (wood, straw and grass) for the production of bioethanol, and in Sweden a pilot plant for a daily production of 500 l bioethanol from (wood) saw dust is running. The application of modern biotechnology is a crucial factor in its success: genetically modified yeasts able to simultaneously convert various monosaccharides have been and are developed (Herrera 2006)130. Although the ligno-cellulosic materials are cheaper131 132, the pretreatment and conversion costs are higher, and different opinions exists if this development will lead to a low cost bioethanol production process133 134 135 (Groenestijn 2006)136. However, the gasoline production costs may also increase within the next 5 years as well.118 personal communication K. Werling (Agroetanol, Sweden; June 2006) 119 communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-62006) 120 Well-to-Wheels analysis of the future automotive fuels and powertrains in the European context (2006); Version 2b; EC-DG JRC, Concawe, Eucar 121 personal communication K. Werling (Agroetanol, Sweden; June 2006) 122 personal communication K. Werling (Agroetanol, Sweden; June 2006) 123 communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-62006) 124 Herrera, S. (2006) Bonkers about biofuels; Nature Biotechnology: 2497): 755-760 125 personal communication K. Werling (Agroetanol, Sweden; June 2006) 126 personal communication K. Werling (Agroetanol, Sweden; June 2006) 127 communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-62006) 128 personal communication K. Werling (Agroetanol, Sweden; June 2006) 129 Well-to-Wheels analysis of the future automotive fuels and powertrains in the European context (2006); Version 2b; EC-DG JRC, Concawe, Eucar 130 Herrera, S. (2006) Bonkers about biofuels; Nature Biotechnology: 2497): 755-760 131 International Resource Costs for Biodiesel and Bioethanol (2002) UK Department for Transport 132 Personal communication with Rudy van Hedel from Staatsbosbeheer (Dutch State Forest Management) 133 personal communication K. Werling (Agroetanol, Sweden; June 2006)


If the bioethanol production in the EU25 will have a share of 1 % in liquid fuel production within 5 years, the number of jobs created in bioethanol plants will be 1600 and the indirect jobs 20,000 (based on extrapolation of the present figures). For the European wheat farmers the outlooks for the next 5 years are promising: the ethanol market will strongly increase which leads to a growing demand for wheat and higher prices for this crop. R&D on the use of wheat straw for the production of bioethanol may lead to another improvement of the situation of the farmers. The EU25 is preparing for the use of ligno-cellulosic biomass as a raw material for bioethanol production, the so called second generation bioethanol production. Besides a possible cost reduction, another reason exists to shift from first to second generation production. The amount of fossil fuel saved per MJ bioethanol produced from cellulosic biomass is substantially higher: 0.9 MJ. Cost-efficient pre-treatment processes for ligno-cellulosic biomass are now being developed, and genetically modified strains that can convert the mixture of monosaccharides in the biomass hydrolysates have recently become available. Other attractive properties of ligno-cellulosic biomass are that it can be harvested at any time of the year, it can grow in nutrient-poor soils and it is a by-product of the forest industry (Herrera 2006)137. The EU is now mainly using wheat for ethanol production, but will increasingly use wheat straw, grasses and wood (willow, pine). The USA will use more corn stover and wheat straw next to corn as the main feedstock, while Brazil will use more bagasse (residu part of the sugar cane) next to sugar recovered from cane. The reduction of CO2 emissions via the bioethanol produced in 2005 amounted less that 0.2 % of the obligations the EU has for 2012. Considerable growth of this activity still is required. The expectations are that bioethanol production will increase an order of magnitude by 2012. By shifting the raw material from wheat to wood, grass and straw, another factor 3 can be gained in CO2 emission reduction. The production and import of much more bioethanol is a political decision. The next border are limits of crop production due to the limited land area on this planet138. The crops used for bioethanol production are not (yet) genetically modified. But such modern biotechnological approach may also help to create more CO2 reduction per MJ ethanol produced in case crops are used which cultivation needs less energy and fertilisers139. This can be considered as a future opportunity.

134 Biofuels for Transportation (2006) Worldwatch Institute, Washingtonne, D.C. 135 IBUS (Integrated Biomass Utilisation System); www.bioethanol.info 136 Groenestijn, J.W. van, Hazewinkel, J.H.O., & R. Bakker (2006) Pre-treatment of ligno-cellulose with biological acid recyling (the Biosulfurol Process). In Proceedings World Bioenergy Conference, May 30 June 1, 2006, Jnkping, Sweden 137 Herrera, S. (2006) Bonkers about biofuels; Nature Biotechnology: 2497): 755-760 138 Own calculations TNO 139 Bioethanol needs biotech now (2006) Nature Biotechnology: 24(7):725


33.1

Case study: BiopolymersIntroduction

Since 1976, plastics are the most used material. Due to their qualities and low costs they have been selected over traditional materials like glass. Their versatility enables their use in a broad range of applications ranging from packaging (29.5 % of the plastics market), building and construction (24.5 %), motor industry (9 %), electrical industry (7.5 %), furniture (7 %), households goods (4.5 %), agriculture (2 %) and other including high-tech composites (16 %) (VKE 2004)140. In 2003, 202 million tonnes of plastics was produced world wide (ibid). Plastics represent the fastest growing group of bulk chemicals with annual growth figures for Europe of 4.4 % per year (Crank et al 2005)141 and growth rates outpacing GDP until 2020 and slightly lower rates in the period 2020-2030 (Phylipsen et al 2002)142. Biomass-based polymers are already very old. Cellulose-based polymers are used in a wide range of applications; it is the major ingredient of paper and through further processing it can be transformed to cellophane and rayon. Viscose also based on cellulose is an important fibre already since the beginning of the 20th century. However, cellulose has lost its markets mainly to polyolefins. Since the 1980s starch-based polymers have been introduced and are now the most important groups of commercially available biomass-based polymers. Since the 1930, as the petrochemical industry grew, these biomass-based polymers were more and more replaced by petrochemical-based polymers (Crank et al 2005)143. High oil prices, worldwide interest in renewable resources, growing concern regarding greenhouse gas emissions and new emphasis on waste management have created a renewed interest in biopolymers. These demand drivers have been combined with the technological advances in biotechnologies leading to the development of a new class of what has been called in this study biotech-based polymers. Biotechnology is used to rearrange biomass carbon in such a way that new products are yielded that are equivalent or that outperform the fossil/petro-based products. Due to the use of biotechnology techniques new and improved microorganisms can be created that convert biomass components (such as sugar, starch, cellulose) into end products or intermediates that can be thermo-chemically upgraded as plastics. Biotechnology is also used to improve the processing and performance characteristics of biomass feedstock. This is done by increasing the content of desired components, decreasing the content of negative

140 VKE (2004) Plastic Business Data and Charts, published on 16/04/2004, by the Verband Kunststofferzeugende Industrie e.V. (VKE), Germany, http/www.vke.de, accessed 30-05-2006 141 Crank, M., Patel, M., Marscheider-Weidemann, F., Schleich, J., HUsing, B., Angerer, G. Wolf, O. (Ed) (2005) Techno-economic feasibility of large-scale production of bio-based polymers in Europe. European Commission Institute for Prospective Technological Studies (IPTS) Seville, 2005, EUR 22103 EN 142 Phylipsen,D., Kerssemeeckers, M., Blok, K., Patel, M., de Beer, J., Eder, P. (Ed), Wolf, O. (Ed) (2002) Clean technologies in the materials sector Current and future environmental performance of material technologies. European Commission Institute for Prospective Technological Studies (IPTS) Seville, 2002, EUR 20515 EN 143 Crank, M., Patel, M., Marscheider-Weidemann, F., Schleich, J., HUsing, B., Angerer, G. Wolf, O. (Ed) (2005) Techno-economic feasibility of large-scale production of bio-based polymers in Europe. European Commission Institute for Prospective Technological Studies (IPTS) Seville, 2005, EUR 22103 EN


components such as lignin, and adding the capability to produce new components (Carole et al 2004)144. Biotechnology has great potential for the development of new types of biopolymers; this makes it an interesting case for the study of the impact of biotechnology on Europe145. In this case study the economic, social and environmental impact of this new class of biotechnologybased polymers on Europe is presented and compared with the US and Japan.

3.2

Case description

This case study is on biopolymers. The term biopolymer can stand for a number of different types of bio-related polymers: polymers produced on the basis of biomass (biomass-based polymers), polymers that are (partly) produced through modern biotechnological production processes (biotech-based polymers) and biodegradable polymers or a combination of them. Biotech-based polymers and biodegradable polymers can be either biomass-based polymers or petrochemical-based polymers. Several combinations of biomass-based polymers, biotech-based polymers and biodegradable polymers are possible. On the basis of these three, seven classes of biopolymers have been identified (see box). Classes of biopolymers 1. Biomass-based polymers produced from polysaccharides a. polysaccharides extracted from biomass or produced by bacteria and than modified b. polysaccharides (partly) fermented leading to new products 2. Polyesters synthesised through biotech-based production processes on the basis of biomass-based produced monomers: Polylactic acid - PLA 3. Other polyesters from biomass-based intermediates: a. Poly(trimethylene terephthalate) PTT: from biotech&biomass-based PDO which is polymerised together with petrochemical-based PTA or DMT: production to be realised soon b. Poly(butylene terephthalate) PBT: from biotech&biomass-based BDO which is polymerised together with petrochemical-based PTA or DMT: is still theory. Chemo-PBT is biodegradable c. Poly(butylene succinate) - PBS: from biotech&biomass-based BDO which is polymerised with biotech & biomass-based succinic acid: biotech route to succinic acid is in development phase 4. Direct biotech-based production of polyester by fermentation or in a crop (mostly GM engineered): Polyhydroxyalkanoates - PHAs, including PHB, P(3HB), and PHV 5. Biomass-based polyols that together with the petrochemicals-based isocyanate is used for the production of polyurethanes. Most biomass-based polyurethanes are not easy biodegradable 6. Biotech-based production of polyamides: nylons (-6, -66, -69). In research phase. 7. Biotech-based production of polyacrylamide on the basis of biotech-based produced acrylamide. In production The focus of this case study is on polymers that are produced through (partly) biotech-based production processes and that are now in production or will come into production the next few years: starch-based through fermentation (class 1b), PLA (class 2), PTT from BioPDO (class 3a), PHA (class 4) and Polyacrylamide (class 7).144 Carole, T.M., Pellegrino, J. and M.D. Paster (2004) Opportunities in the Industrial Bio-based Products Industry, in Applied Biochemistry and Biotechnology, Vol. 113-116, page 871-885, 2004 145 There is also interest in the use of biotechnology to make conventional polymers. An example is the condensation of a diol to a diacid to make a polyester uses lipase at 60O rather than sulphide acid at 200o


Starch-based through fermentation Solanyl is a potato waste-based product produced through a fermentation step converting the starch in the potato peelings to lactid acid (via glucose) by means of lactic acid bacteria that are naturally present in the feedstock. The product is then dried and extruded to obtain thermoplastic properties. The process has been developed in public-private partnerships of the Rodenburg Group together with the research institute ATO, both located in the Netherlands. In 1997 the Rodenburg Biopolymers company was created, with a pilot plant of 7000 t/s capacity of Solanyl. Production capacity is now 40 000 t/a146. Polylactide acid Polylactid acid (PLA) was first made in 1932 by Carothers, who developed a process involving the direct condensation polymerisation of lactic acid under high vacuum (Woodens 2006). The new biotech-based process of NatureWorks - the registered name of the biotech-based PLA developed by Cargill and Dow involves extracting sugars from corn starch, sugar beet or wheat starch and then fermenting it to lactic acid. The lactic acid is converted to the dimer or lactide which is purified and polymerised to polylactic acid using a special ring-opening process147 without the need for solvents. The family of polymers in part form the stereochemistry of lactic acid and its dimer. As fermented lactic acid is 99.5 % L-isomer and 0.5 % Disomer, polymerisation of the lactide to give polymers rich in the L-form gives crystalline products, whereas those rich in the D-form (>15 %) are more amorphous. The enhanced control of the stereochemistry achieved in the dimer route accounts for the superiority of the new product over the 1932 products through the Carothers approach. The resulting PLA resins can be extruded like other thermoplastic resins to make fibres, films, spunbounds, etc. (Woodens 2006)148. In a second route, used by Mitsui Toatsi, lactic acid is converted directly to high molecular weight PLA by an organic solvent-based process with the azeotropic removal of water by distillation (Crank et al 2005)149. Polyhydroxyalkanoates Polyhydroxyalkanoates (PHAs) are a family of natural polymers produced by many bacterial species and exhibit a broad spectrum of performance properties, enabling them to compete with a large share of the plastic market. PHA are produced through fermentation, using sugar and lipids as feedstock. Already since the 1970s companies have been working on costeffective fermentation processes. Introduced in the market by ICI and its successor Zeneca (and subsequently bought by Monsanto) the production costs of the bacterial fermentation of PHBV (Biopol ) were still not competitive with petrochemical-based routes. Metabolix, a USbased high tech company, has bought in 2001 the Biopol patents from Monsanto on the insertion of genes that control the enzymes involved in PHBV production into bacteria and corn. The company has developed an enzyme catalysed polymerisation route that produces very high pure PHAs for biomedical applications and also has expressed PHAs in E. coli to reduce production costs and simplify purification (BioPlastics 2003150; Carole et al 2004151).

146 www.biopolymers.nl 147 www.NatureWorksLLC.com 148 Woodens, C. (2006) New developments in biodegradable non-wovens, in New Fibres, Mag@zines On-line, www.technicanet/NF/NF3/biodegradable.htm, accessed 12/06/2006 149 Crank, M., Patel, M., Marscheider-Weidemann, F., Schleich, J., HUsing, B., Angerer, G. Wolf, O. (Ed) (2005) Techno-economic feasibility of large-scale production of bio-based polymers in Europe. European Commission Institute for Prospective Technological Studies (IPTS) Seville, 2005, EUR 22103 EN 150 Bioplastics (2003), Summary of Report prepared for Agriculture and AgriFood Canada, 29 August 2003, www.agr.gc.ca/misb/spec, accessed 30-5-2006 151 Carole, T.M., Pellegrino, J. and M.D. Paster (2004) Opportunities in the Industrial Bio-based Products Industry, in Applied Biochemistry and Biotechnology, Vol. 113-116, page 871-885, 2004


1,3 propanediol Bio-PDO, the biotech-based 1,3 propanediol, is together with purified terephthalic acid used for the production of polytrimethylene terephthalate (PTT), a new type of polyester fibre marketed under the name Sorona. This is a polymer with remarkable stretch-recovery and properties such as softness, resiliency, toughne

Bio4EU-Task2Annexindustrialproduction

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