Advanced Biofuels - Potential for Cost Reduction: IEA Bioenergy: Task 41: 2020:01

Bioenergy already plays an important role in the global energy economy, and its expanded use is a critical element in future low carbon scenarios, where it can especially play an important role in reducing greenhouse gas (GHG) emissions from the transport sector. Decarbonising transport will require a range of bio-based transport fuels, and especially advanced low carbon fuels which are suitable for long-haul transport applications including aviation. A number of appropriate technologies to produce such fuels are being developed and commercialised. However so far, their production has only reached a limited scale.The costs of these advanced biofuels are currently higher than those of the fossil fuels which they can displace and of more conventional biofuels such as ethanol from sugar or corn, or biodiesel. It is therefore important to consider what scope there is to reduce the production costs of a range of advanced biofuels, and to identify under what conditions they could become affordable.This project used as its starting point a study on the costs of advanced biofuels carried out within the programme of work of the Sub-Group on Advanced Biofuels (SGAB) (under the European Commission’s Sustainable Transport Forum (STF)) and published in 2017. The report on this study reviewed data available on the current costs of producing a range of advanced biofuels, based on extensive contact with industry and other players active in the field. The aims of this project are to: (1) update and extend the SGAB study to provide estimates of the current costs of producing a selection of relevant advanced biofuels; (2) identify the scope for cost reduction for these advanced biofuels; (3) develop a model for likely cost reduction progress as deployment grows; (4) compare these costs and cost trajectories with likely trends in fossil fuel prices, and those of conventional biofuels; (5) examine the impact of policy measures, including carbon pricing, on the economic competitiveness of advanced biofuels.