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AEI: Further increases in pump prices are expected from 2025

7 February 2024

The EU’s obligations regarding the increase in the amount of biofuels used in transport will cause the price of petrol to increase by around 2.5% in 2025 and 3.8% in 2030, in the conditions of maintaining the constant price of oil, claims the Intelligent Energy Association (AEI).

The global biofuels industry has seen steady growth and adaptation to continued growth. Global biofuel production was about 175 billion liters in 2022. And there is a strong indication from the World Energy Council that biofuels will meet 30% of the world’s energy demand by 2050. Currently, Brazil has the most advanced biofuel program in the world, where about 40% of gasoline consumption has been replaced by ethanol from sugarcane and other sources. About 9.1% of the world’s total primary energy in was provided by biofuels and waste. However, we still use very little biofuel, especially when compared to our overall energy consumption.

In addition to reducing GHG emissions and air pollution, biofuel industries can contribute to increased energy security on a local and national scale, as they do not rely on local fossil oil reserves. In addition, the creation of new jobs and economic growth, especially in rural areas, should also have a positive impact on the social environment.

However, in order to fully exploit all the positive features of biofuels, additional research and investment are required, as the production of biofuels requires several processing steps compared to conventional methods of drilling into the ground to obtain crude oil, followed by refining.

Therefore, biofuels currently typically exceed the production costs of fossil fuels. In addition, feedstocks for biofuel production do not compare to crude oil in energy density, requiring much larger amounts of biomass for the same energy production compared to fossil sources. The infrastructure needed for the biofuel production sector also needs to be developed on a large scale. An example is the primary energy required to run the process, which should be obtained through sustainable operations. Candidates for this include solar and wind power, among others. Thus, by reducing the total cost of production and increasing the efficiency of the process, biofuels could become more competitive with fossil fuels. In addition, the by-products of biofuel production should be efficiently used in a circular economy, which could increase the cost efficiency of these processes.

Transport is one of the most socioeconomically sensitive sectors for the use of liquid biofuels. It contributes about 17% to global CO2 emissions, and so far, sustainable solutions are not fully developed. Due to their limitations, current biofuel technologies are not likely to completely replace fossil fuels entirely, but they can provide new routes to valorize the waste stream in a circular economy and significantly contribute to minimizing our dependence on fossil fuels step by step .

The price of biofuels is about 3 times higher than the replacement products, which makes them unattractive today, but they are part of the future fuel mix.

A complementary approach to this goal is electric cars, which have zero tailpipe emissions, although CO2 emissions are associated with the car’s production and electricity source. Essential in electric vehicle batteries are metals such as lithium, cobalt, nickel and manganese. The demand for these metals is increasing, while at the same time, toxic e-waste is piling up around the world. Traditional recycling/extraction methods require high temperatures and strong acids. This is a high energy process involving toxic chemicals. An alternative is bioleaching or biomining, which uses microbes such as those that can bind and recover metals, bypassing the need for high temperatures and toxic chemicals. This emerging technology offers an environmentally friendly approach to recycling, but still requires extensive research and development. In addition, new infrastructure must be put in place to support millions of electric cars at the same time. Until this point, a combination of synthetic fuels and biofuels in synergy with electric cars could be an optimal solution for the coming years, partially replacing fossil fuels, thus drastically reducing the production of CO2 from the transport sector.

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