San José, April 22, 2022 (IICA) – The agricultural sector in the Americas has a vital role to play in strengthening global energy security following the outbreak of armed conflict in Eastern Europe, in addition to its traditional role as a key producer of food for the world.
The report notes that the Americas produce 71% of the world’s liquid biofuels. Biofuels have assumed strategic importance as a substitute for oil and natural gas in the current international scenario, as the armed conflict has jeopardized energy supply and energy security.
The conflict in Eastern Europe is having a negative economic impact not only on the Old Continent, but worldwide. In the past month, the price of liquefied natural gas (LNG) has risen by more than 600%, while shortages are expected to worsen the situation, with Russia being Europe’s largest supplier of natural gas.
Russia is also one of the largest oil producers in the world (estimated to account for 12% of the total crude oil supply), so the sanctions imposed by the international community prohibiting imports of fuel into coming from this country are bound to have serious consequences.
“Faced with this situation, the agricultural sector in the Americas can play a key role, since it is an agro-exporter par excellence, contributing to world food security and even to energy security. These two goals are not opposed, as diversification into the efficient and integrated use of biomass to produce biofuels can improve the efficiency and safety of agrifood systems,” the report observes. The author of the document is IICA biofuels and bioenergy specialist, Agustín Torroba.
Biofuels already contribute more than 150 million cubic meters to the global liquid fuels matrix, with biodiesel accounting for 33% of the total and bioethanol 67% (the latter being either blended with gasoline or used in its place). The Americas account for 88% of global bioethanol production and 36% of biodiesel production.
The main raw materials used to make bioethanol are corn and sugar cane, while biodiesel is produced from soybean and palm oils. The Americas have large exportable balances of these feedstocks, which could double global bioethanol production and increase biodiesel production by 80%, the document reveals.
“Today, liquid biofuels produced in the Americas cover 22% of the continent’s deficit in crude oil and its derivatives. Processed, the exportable balances of raw materials could cover 53% of the total. High oil prices, added to the tax differential, especially in countries that have imposed a carbon dioxide tax, place biofuels ¾and especially bioethanol¾ in an economically advantageous position,” the IICA study says. .
Thus, the continent has enormous potential to develop biofuel production and help achieve the goal of energy security.
The document emphasizes that the biofuels industry has reached a level of maturity and competitiveness that has enabled it to significantly lower its production costs over the last decade and to be increasingly competitive with fossil fuels.
The report adds that environmental commitments are a plus for the sustainable production and consumption of biofuels. This is reflected in the fact that more than 60 countries have mandated the use of biodiesel, bioethanol or both. High taxes also tend to make fossil products more expensive, especially given the increasingly widespread use of carbon dioxide taxes, which helps to create a window of opportunity that facilitates the energy transition and further development of biofuels.
IICA helps the countries of the Americas to disseminate and communicate information on the importance of the sustainable use of biofuels and to develop institutional frameworks and public policies that promote the transition to clean energy in the transport sector.
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