The UK’s biofuels industry is in crisis. Facing competition from imports of US bioethanol and renewable diesel, as well as Chinese biodiesel, domestic producers cannot compete. The UK government has decided not to offer direct support to the industry, meaning at least one, possibly both of the UK’s two existing bioethanol plants will close, and UK fuel suppliers will have to source ‘renewable’ and ‘low-carbon’ fuels from abroad to meet the requirements of the government’s Renewable Transport Fuel Obligation.
But what does it mean for transport fuels to be ‘low-carbon’? Clearly, burning organic molecules in an engine produces exhaust carbon emissions – regardless of the source of the fuel, so these fuels must be derived from sources that have absorbed carbon from the environment in their production, offsetting some of the CO2 from their combustion, and giving them lower net emissions overall.
There are various classes of low-carbon fuels, each with their advantages and drawbacks. Bioethanol is fermented from sugar crops – sugarcane in Brazil, corn in the US, or sugar beet in the UK. It can be blended into petrol at up to 10%, effectively lowering the overall fossil carbon content of the fuel and reducing net emissions. Likewise biodiesel – fatty acid methyl esters made by transesterifying triglycerides in oils and fats – can be blended into regular diesel at up to 7% in the UK.
But ethanol and esters have slightly different combustion profiles to regular petrol and diesel, affecting how they behave in engines designed for conventional fossil fuels. Increasing ethanol content in petrol lowers fuel economy, for example, while esters are hygroscopic, drawing water into the fuel. It is possible to run engines entirely on these biofuels, but there are technical challenges.
Renewable diesel, or hydrotreated vegetable oil, is a fast-growing alternative to biodiesel. It is made from a variety of oils, including used cooking oils and other oily wastes, and is a hydrocarbon mix that’s chemically similar to fossil diesel. That means it can be used as a drop-in replacement for diesel, rather than a minor component of blends – potentially having a larger impact on net emissions. Production often takes advantage of existing refinery infrastructure for hydrodeoxygenation and cracking/isomerisation of oils into diesel. However, there are concerns that some renewable diesel producers are processing virgin oils like palm oil – potentially fuelling deforestation – rather than waste like palm oil sludge.
Then there are electrofuels, or e-fuels – made by capturing carbon dioxide from point sources or directly from the air, and combining it with hydrogen to produce hydrocarbons using Fischer–Tropsch-style processes. Such fuels, while currently very expensive to produce, are held up as the most likely candidate for lowering emissions from aviation. They are also finding use in motor racing, where the performance losses associated with biofuels are unattractive.
Finally there are the fuels with no carbon content at all, such as hydrogen and ammonia. While hydrogen for vehicle transport is likely to be at best a niche application, ammonia has potential in shipping.
But in the end, even low-carbon fuels are burned and release their carbon back into the atmosphere. And while they can have small benefits in reducing net emissions from the existing vehicle fleet, if their use slows down a shift towards electrification, then their overall impact will be to raise emissions.

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