Biofuel imports - a costly trade in bunkum

The Times
April 18, 2009

Carl Mortished: On the money

Forget electric cars, you won't be driving one for decades, perhaps you never will. What matters is the liquid that fills the tank in the Mondeo and that liquid is becoming more peculiar every year. You may think that your car's diesel engine is burning brown sludge pumped out of a North Sea well and processed in a stinking jungle of pipes and pots on some blighted estuary in the North of England. That is only part of the story: what goes into your tank may be a cocktail of fossil-based fuels from Russia or the Gulf laced with vegetable oils imported from as far afield as Brazil and Malaysia. Making road fuel and delivering it to your car is a business that is becoming more complicated, costly and wasteful every year.
Fleets of ships, belching emissions of sulphur and carbon, are moving ethanol and other biofuels to Britain to ensure that the petrol and diesel sold at filling stations complies with the low-carbon diktat. A nightmarish transglobal web of logistics and manufacturing is required to meet the increasing biofuel obligation. In Britain, road fuel is currently 2.7 per cent ethanol or biodiesel (sourced from grains, such as wheat, rape or soya as well as palm oil and animal fat). The Renewable Transport Fuel Obligation will increase that to 3.5 per cent next year and an EU directive requires that it rise to 10 per cent by 2020.
It is a trade in bunkum: more ships burning more fossil fuel to move more biofuel in order to burn less fossil fuel. About 70 per cent of Britain's petrol and diesel is sourced from crude pumped from the UK and Norwegian North Sea, according to the UK Petroleum Industry Association, whose members run Britain's refineries.
The dwindling output of these wells means that more crude will in future be imported into Europe but biofuels will accelerate our rising dependence on imports. Only 8 per cent of the biofuel used in Britain is sourced locally. The biggest suppliers are Brazil, from which we import ethanol made from cane sugar, and the United States, which supplies grains, but our hunger for biofuels is forcing us to seek supplies from a host of countries including Indonesia, Malawi, Pakistan and Ukraine.

To make matters worse, Britain is now forced to import not just crude but oil products. Our refineries can no longer cope with the increasing clamour for diesel caused by the fashion for more fuel-efficient diesel cars. Petrol is spurned as the hunger for diesel increases. The imbalance between supply and demand (a barrel of crude can only produce so much diesel) has created more seaborne trade: 4.5 million tonnes of unleaded petrol shipped to America last year while 3.5 million tonnes of diesel arrived on our shores, mainly from Russia. At the same time, the budget airline industry is boosting demand for jet fuel and the refineries in the Gulf are supplying it — 5.3 million tonnes imported last year.
Perhaps we ought to make the stuff ourselves — build better refineries that can produce more diesel molecules from the sludge at the bottom of a barrel of crude. That is possible, say the refiners, but it's an energy intensive process: we should emit more carbon if we make more diesel. It would be harder for Britain to cut its emissions; it is easier to let the Saudis and Russians make the stuff offshore.
And so we run British industry into the ground, shying away from dirty processes, buying more fuels from distant lands that don't worry much about carbon in the hope that we can meet our self-imposed target of reducing emissions by 80per cent by 2050.
Today, agriculture ministers from the Group of Eight nations (including Britain) meet in Italy to talk about food security. Since last year's bout of severe food price inflation, the pressure has eased but the problems remain. Stockpiles of staple grains are very low and a drought could push the cost of rice and wheat higher again.
Meanwhile, at the refinery, diesel is being laced with methyl esters made from wheat and soya. It has cost us £100 million so far to build this low-carbon house. And the game has only just begun.