Biofuels in Asia: What’s Next After Kyoto Protocol

Abstract:

Most countries in Asia have initiated policies to promote the production and utilization of biofuels recognizing that biofuels have the potential to reduce GHG emissions, enhance energy security and revitalize rural development. However, the path to realizing the full potential of biofuels is not straight forward. Ensuring sustainable production of biofuels remains a challenge. The rush to promote biofuels in Asia could be counterproductive if they are not produced in sustainable manner. LCA studies show that biofuels produced unsustainably could result in increased GHG emissions. Inappropriate production methods can exacerbate deforestation, water scarcity and eco-system imbalance. Worse, food security can be put at risk if energy crop production will compete with food production.

The sustainability issue is also dragging the prospect of biofuels to have a role in CDM. The CDM under the Kyoto Protocol has a dual goal of reducing GHG emissions and promoting sustainable development. Biofuels – perceived as ‘carbon neutral’ – have initial high expectations to be a major focus of CDM projects. However, as of October 2008, there are no biofuel projects among the 1186 projects approved in the CDM portfolio. Under the current system with only one approved methodology (AM 0047), the chance for approval of biofuel CDM project on a significant scale is highly unlikely.

There is a need to develop additional methodologies for biofuels in the future climate regime. In addition, the future regime should create financial and technological incentives for the production of second generation biofuels, as most LCA studies indicate that their production might be more sustainable. Asian countries, while having comparative advantage in producing first generation biofuels from cultivation of energy crops, should be prepared for the transition when second generation biofuels will be commercially viable.