This report is by the Energy Sector Management Assistance Programme (ESMAP), a joint programme of the United Nations Development Programme (UNDP) and the World Bank, to help developing countries assess the potential of biofuels in the near to medium term.
This report responds to increasing requests from developing countries to help assess the potential of biofuels for transport in the near to medium term. It defines biofuels as liquid fuels produced from biomass; it excludes treatment of solid biomass as a source of energy. This report focuses on ethanol and biodiesel based on currently commercially available or near-commercial technologies and discusses their potential as alternative transportation fuels over the next five to ten years.
Chapter 1 gives background information. Chapter 2 reviews international experience with biofuels to date. Chapter 3 examines resource costs of biofuels, beginning with a description of the processes for fuel production, then covering feedstock costs, processing costs, co-product sales and use, and overall costs. Because of the significant role played by tax exemptions in all biofuel programs to date, the chapter also reviews fiscal measures in some detail. It then concludes assessing the environmental impacts of biofuel production and other economic impacts. Chapter 4 focuses on the impact of biofuels on vehicle exhaust emissions, vehicle performance, and lifecycle GHG emissions. Chapter 5 looks at the range of considerations for developing countries in deciding whether to encourage the use of biofuels in their transport sector. They include agricultural and macroeconomic policies, social and infrastructure spending, global trade policies, retail gasoline and diesel prices, and effects of world oil prices. It also outlines a methodology for an economic analysis of domestic biofuel programs. Chapter 6 draws conclusions.

By: M. Kojima and T. Johnson - Energy Sector Management Assistance Programme (ESMAP)

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