Canada: Biofuels Heating Up: But Are They Greener?

Last Updated: November 29 2012
Article by Marketing, Advertising & Regulatory Group

Bottom Line: Biofuels are all about making fuel out of things that grow rather than using limited, greenhouse gas-emitting fossil fuels. Corn, sugar cane, algae, waste from wood chips and corn husks – these are some of the many renewable bases for biofuels. There can be a complex set of trade-offs with some biofuels, however. They may help solve CO2 problems but raise other concerns. They are also at a relatively early stage in development, so the long term implications of some of them may not yet be understood. If you want to make claims about their virtues, then, you should tiptoe carefully, ensuring that your substantiation is tight, authoritative and on point, that your claims don't overstate your products' benefits and that material disclosures are made as appropriate.


Moving toward sustainability does not happen with easy, straightforward steps. It repeatedly feels like a 'one step forward, two steps back' journey as we stride and stumble towards solutions to our challenges. One such example is biofuels. These fuels demonstrate a complicated product set where the devil is always in the details – some may present a better eco-balance than others and some are criticized as simply greenwash.

What will the real impact be of changing lands for food production to lands for fuel production? Does the growth, processing and use of biofuels really result in lower greenhouse-gas ("GHG") emissions than fossil alternatives? Are government regulations moving the development of biofuels in the right direction? Many vital questions are being raised – and the answers will vary depending on which of the many sources of biofuels are being used and how efficiently they are processed. What seems clear for marketers, at the least, and as we canvassed in our 2011 Green Marketing & Advertising Law Update, is that environmental organizations have their eye on this issue and are on alert for what they perceive as greenwashing attempts by those promoting biofuels.

Who is Using and Developing Biofuels?

Currently in the automotive industry, gasoline can comprise up to 10% of ethanol in North America. This results in the use of about 15 billion gallons of ethanol annually in the US alone. However, recently, the US Environmental Protection Agency ("EPA") approved the use of "E-15," a 15% ethanol-gasoline blend, which will increase the amount used. Many targets have ambitious goals of increasing ethanol use in vehicles to much higher levels.

Biofuels are also being actively adopted by the airline industry. One of the first robins in this biofuel spring has been Boeing, which is reportedly planning to generate at least 1% of its fuel from biofuel sources by 2015. This "minuscule" amount adds up to about 600 billion gallons of fuel annually. Lufthansa is preparing to build an algae aviation fuel production plant and also plans to buy at least half of the produced fuel. British Airways is going to open a biofuel producing plant and plans to start using biofuels in 2014. Virgin is working on a project of recycling waste gases from steel production into aviation fuel and routinely testing other new technologies.

This is only the tip of the iceberg. In terms of airlines testing biofuels, Biofuels Digest published an article on June 5, 2012 chronicling airlines doing this around the world. This included Porter Airlines which, in April 2012, reported the first biofuel-powered revenue flight in Canada, from Billy Bishop Toronto City Airport to Ottawa. It used a 50/50 blend of biofuel and Jet A1 fuel in one of its engines. Air Canada followed in June with its first biofuel flight (from Toronto to Mexico City) using biofuels made from recycled cooking oil.

Following the trend, oil and gas companies are actively directing R&D and production resources to biofuels. For some examples, BP is investing in research to extract biofuels from sugar cane. Exxon Mobil is working on a project to turn algae into biofuel. Shell is purchasing sugar-producing facilities to convert beet and organic waste into biofuel. Some skeptics consider this activity constructing a green smoke-screen, to divert attention from extensive oil explorations. The effort – and debate – surges on, however.

What's the Political Landscape?

Some governments address the environment by ignoring the issue altogether and some by solving it with the full power of their bureaucratic fist. The EU, for example, imposes emission limits on GHG, forcing the replacement of fossil fuels with lower carbon alternatives. Other jurisdictions may use carrot and stick approaches, such as incentives, taxes and limitations to regulate the fuel producing and fuel consuming industries. In the US, for example, there are renewable fuel standards to ensure that transportation fuel sold in the US contains a minimum volume of renewable fuel/biofuel consumed each year. On top of that, the US, Canada and EU governments provide grants and loans to ethanol producers. This practice, however, can negatively affect the food supply for consumers and livestock, who become direct competitors for the crop.

In any event, it is clear to most that the development of alternatives to fossil fuels is an important initiative. Besides the obvious environmental aspects, the development of biofuel addresses concerns of, "What will power our engines when the price of oil reaches economy-shaking levels?" and, eventually, "What will replace depleting oil supplies altogether?"

Getting to the Punch Line: Are Biofuels Actually "Greener" than Fossil Fuels?

Several studies have been published on the eco-efficiency of biofuels. On the good news front, some studies have found that CO2 savings with the present biofuel technologies can be significant, estimating them to be between 20% and 80% compared with using conventional petrol. This may increase to 90% – and higher – for second-generation biofuel such as cellulosic ethanol or syn-diesel. Why is that not unqualified good news? Because biofuels may still lead to other environmental problems. Some of the adverse effects can include soil pollution due to over-fertilization, water pollution in the lakes and rivers, deforestation to vacate more land to grow crops for biofuels, and others. Unfortunately, the biofuel production processes currently utilized are not perfect and more research in the area has to be done to close the gap.

Here's what is reasonably clear: There is an urgent need for cleaner and more cost-efficient biofuels to replace depleting and costly hydrocarbons.

Here's what is less clear: How we can eliminate the environmental impact of biofuel production instead of deflecting it into other areas, and when will the industry start addressing it as a primary goal and not simply, according to some, as high school projects.

What To Wish For When You Blow Out The Candles

As in so many areas, the best scenarios and solutions may come from a closer collaboration between government, industry, and agricultural and environmental groups. Hopefully, that collaboration will ensure that at the end of the day we all will have food on our plate and planes in the air, while keeping clean rivers and air to breathe. It is hard, it is expensive, but many believe it is achievable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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