This report summarises 20 case studies on investments in the production of biofuel and the feedstocks used for biofuel (palm oil, soybeans, sugarcane and jatropha) in forest-rich countries in Africa, Asia and Latin America. The investments were financed by private entrepreneurs, public financing and private financial institutions. A large number of private financial institutions such as banks, asset managers and pension funds were investing, most of which are located outside the country where the investment took place. Dozens of public financial institutions—many of which are foreign—play a significant role. Since the availability of finance is a crucial precondition for the further growth of the biofuel sector, these actors could play an important role in leveraging more sustainability in the sector. However, our findings suggest that most investors are not yet effectively addressing key environmental and social sustainability challenges, either because they lack sustainability policies or because their policies are of insufficient quality. Realising the potential influence of investors on minimising the negative social and environmental costs associated with feedstock expansion and biofuel production requires improved dissemination of high-quality governance instruments. Whilst private and public investors could develop and adopt better policies voluntarily, we also discuss regulatory options available to governments in production and consumption countries. These options could motivate or assist private financial institutions in developing and applying sound, responsible financing policies.

Interest in biofuels began with oil shocks in the 1970’s, but the more rapid development and consumption of biofuel industry in recent years has been primarily driven by mandates, subsidies, climate change concerns, emissions targets and energy security. From 2004 to 2006, fuel ethanol grew by 26% and biodiesel grew by 172%. As biofuel production continues to expand, investments in capacity expansion and research and development have been made. The 2008 food crisis emphasized the need to re-examine biofuel consequences. Biofuels remain an important renewable energy resource to substitute for fossil fuels, particularly in the transportation sector, yet biofuels’ success is still uncertain. The future of biofuels in the energy supply mix relies on mitigating potential and improving the environmental gains. This book brings together leading authorities on biofuel from the World Bank to examine all of the impacts of biofuel (economic, social, environmental) within a unified framework and in a global perspective, making it of interest to academics in agricultural and environmental economics as well as industry and policy-makers.

Biofuels are currently in the middle of a heated academic and public policy debate. Biofuel production has increased fivefold in the past decade and is expected to further double by 2020. Most of this expansion will happen in developing nations. This volume is the first of its kind, providing a comprehensive overview of the biofuel debate in developing countries. The chapters are written by a multidisciplinary team of experts, exposing the key drivers and impacts of biofuel production and use. The book covers impacts as diverse as air pollution, biodiversity loss, deforestation, energy security, food security, greenhouse gas emissions, land use change, rural development, water consumption and other socioeconomic issues. Its wide focus accommodates examples from countries in Africa, America and Asia. As such, this book will become an indispensable companion to academics, practitioners and policy makers who wish to know more about biofuel issues in the developing world.

With the rapid growth of biofuel production and consumption and the proliferation of policy decisions supporting this expansion, concerns about the biofuel sector’s environmental and social impacts are increasing. Consequently, a range of actors – among them governments, multilateral institutions, nongovernmental organisations and multistakeholder industry groups – have created sustainability frameworks, some mandatory, others voluntary. This report examines how the most developed sustainability frameworks for feedstock production (including biofuels) address key environmental issues. It identifies critical gaps in these frameworks and proposes areas for improvement. The main finding is that the frameworks share broad sustainability principles yet they differ greatly in terms of their comprehensiveness and how they apply specific indicators for environmental issues, particularly with respect to land use change (both direct and indirect), allocation of degraded land for feedstock cultivation, and related accounting of greenhouse gas emissions. In the absence of sufficient hard data with which to gauge the effectiveness of existing sustainability frameworks, the report notes that the standards of these frameworks are not sufficient to mitigate the effects of direct and indirect land use change and promote environmental conservation. A key recommendation is that such standards should be complemented by other policy instruments. Furthermore, as sustainability frameworks are only a means to an end, they must be supported by practical guidance, effective interpretation of standards, principles and criteria, and development of verifiable indicators, along with the provision of appropriate tools, approaches and capacity building activities.

Biofuels are a renewable source of energy used mainly for transportation. They link together food, energy and natural resources sectors, and involve ecological, social and inequality issues. They are an emblematic example of the interactions between economic, environmental, social and political decisions and, as a recent and complex issue, require updated and detailed information to be understood. This book aims to shed light on several economic, social and environmental issues connected to biofuel production and policies. The Economics of Biofuels adopts detailed descriptions, rigorous data analysis and precise econometric methods to estimate the effects of biofuel on different socio-economic factors, avoiding complicated and sometimes ineffective models based on context-specific parameters. In particular, the book focuses on the impact of bioenergy policy on biocommodity production and trade, and on the related phenomenon of land acquisitions to grow biofuel commodities. The book’s main findings are derived by an original and unique dataset collecting information on the investors acquiring land in Africa and on the voluntary standard, certification and labelling schemes adopted by them as Corporate Social Responsibility (CSR) strategy. The analysis links together in an original way public and private initiatives to make biofuel sustainable. Therefore, this book represents an improvement in the understanding of biofuel production and policy’s sustainability. This book is of interest to those who study environmental economics, agricultural economics and sustainable development. It is also suitable for those in the renewable energy sector, with a particular focus on biofuel sustainability.

In December 2007, the Congress expanded the renewable fuel standard (RFS), which requires rising use of ethanol and other biofuels, from 9 billion gallons in 2008 to 36 billion gallons in 2022. To meet the RFS, the Departments of Agriculture (USDA) and Energy (DOE) are developing advanced biofuels that use cellulosic feedstocks, such as corn stover and switchgrass. The Environmental Protection Agency (EPA) administers the RFS. This report examines, among other things, (1) the effects of increased biofuels production on U.S. agriculture, environment, and greenhouse gas emissions; (2) federal support for domestic biofuels production; and (3) key challenges in meeting the RFS. GAO extensively reviewed scientific studies, interviewed experts and agency officials, and visited five DOE and USDA laboratories. GAO suggests that the Congress consider requiring EPA to develop a strategy to assess lifecycle environmental effects of increased biofuels production and whether revisions are needed to the VEETC. GAO also recommends that EPA, DOE, and USDA develop a coordinated approach for addressing uncertainties in lifecycle greenhouse gas analysis and give priority to R & D that addresses future blend wall issues. DOE, USDA, and EPA generally agreed with the recommendations.

This open access book presents a comprehensive analysis of biofuel use strategies from an interdisciplinary perspective using sustainability science. This interdisciplinary perspective (social science-natural science) means that the strategies and policy options proposed will have significant impacts on the economy and society alike. Biofuels are expected to contribute to reducing greenhouse gas emissions, revitalizing economies in agricultural communities and alleviating poverty. However, despite these anticipated benefits, international organizations such as the FAO, OECD and UN have published reports expressing concerns that biofuel promotion may lead to deforestation, water pollution and water shortages. The impacts of biofuel use are extensive, cross-sectoral and complex, and as such, comprehensive analyses are required in order to assess the extent to which biofuels can contribute to sustainable societies. Applying interdisciplinary sustainability science concepts and methodologies, the book helps to enhance the establishment of a sustainable society as well as the development of appropriate responses to a global need for urgent action on current issues related to biofuels.