Berufsakademie Mannheim

“Biopetrol”: A swot analysis of non-fossil fuels for cars within Europe 

by

Anja Müller

A Abstract 

Fuel and diesel petrol are derived from crude oil, and since this is a limited raw material, unevenly distributed over the world, it will become very important in the future to find alternatives to petrol; one of them are biofuels. 

The present paper was written in order to find out about the biofuels market in Europe. An overview of different types of biofuels, including Biodiesel, Bioethanol, Synthetic Fuels as well as various others was compiled, describing advantages and disadvantages of each biofuel. Afterwards, Biodiesel is the main focus of the conducted SWOT analysis. This is due to the fact that Biodiesel is the major biofuel consumed within the EU, with a market share of about 80% of all biofuels available. It is found that Biodiesel does have several Strengths, both product Specific and Environmental specific, which could help the product become even more successful. On the other hand, Weaknesses, also product Specific and Environment specific are shown. Also, Opportunities and Threats are told about, with both of the topics divided into Political influences, Environmental factors and Other factors. Opportunities and Threats are influences coming from the outside, and they cannot be directly influenced by the producers of biofuels. Yet, knowing about these factors can be helpful in order to plan for future actions and gain a better understanding of the current situation of the product. 

Finally, a Conclusion shortly sums up the information gained in course of the study, and afterwards an Outlook for the future of biofuels is given. An Overview of the SWOT analysis shows the researched information in a compressed way in the Appendix.

B Table of Contents

A Abstract  II
B Table of Contents  III
C List of Figures  V
D List of Abbreviations  VI

1 Introduction  - 1 -
1.1 Problem Statement  - 1 -
1.2 Focus and Limitations  - 1 -

2 Biopetrol as a special type of petroleum  - 2 -

3 Different types of biopetrol  - 2 -
3.1 Biodiesel  - 3 -
3.2 Bioethanol  - 4 -
3.3 Synthetic Fuels  - 6 -
3.4 Other kinds of Biopetrol  - 7 -

4 SWOT analysis of non-fossil fuels for cars within Europe  - 8 -
4.1 Strengths  - 9 -
4.1.1 Product specific  - 9 -
4.1.1.1 Price  - 9 -
4.1.1.2 No additional infrastructure costs  - 10 -
4.1.1.3 Valuable byproducts   - 10 -
4.1.1.4 Safety  - 11 -
4.1.1.5 Customer acceptance  - 11 -
4.1.2 Environment specific  - 11 -
4.1.2.1 Environmental Friendliness  - 11 -
4.1.2.2 Reduction in hazardous solid waste  - 12 -
4.2 Weaknesses  - 12 -
4.2.1 Product specific  - 12 -
4.2.1.1 Lower performance under cold conditions  - 12 -
4.2.1.2 Special equipment  - 13 -
4.2.2 Environment specific  - 13 -
4.2.2.1 Intensive agricultural practices  - 13 -
4.2.2.2 Nitrous oxides  - 13 -
4.3 Opportunities  - 13 -
4.3.1 Political influences  - 14 -
4.3.1.1 Political support  - 14 -
4.3.1.2 Tax incentives  - 14 -
4.3.2 Environmental factors  - 15 -
4.3.2.1 The Kyoto Protocol  - 15 -
4.3.2.2 New agricultural markets  - 15 -
4.3.3 Other factors  - 15 -
4.3.3.1 Substitute for diesel petrol  - 15 -
4.3.3.2 Less dependency on foreign oil  - 16 -
4.3.3.3 Rising world crude oil price  - 16 -
4.3.3.4 New production techniques  - 17 -
4.3.3.5 Growing number of cars  - 17 -
4.4 Threats  - 18 -
4.4.1 Political influences  - 18 -
4.4.1.1 Taxes  - 18 -
4.4.1.2 Biofuels Directive cannot be fulfilled  - 18 -
4.4.1.3 Missing support  - 20 -
4.4.2 Environmental factors  - 20 -
4.4.2.1 Supply of raw material  - 20 -
4.4.2.2 Limited amount of cultivation land  - 20 -
4.4.2.3 Negative image of Environmental Organisations  - 21 -
4.4.3 Other factors  - 21 -
4.4.3.1 Import cheaper than production  - 21 -
4.4.3.2 Falling world crude oil price  - 21 -

5 Conclusion and Outlook  - 22 -

E Bibliography  VII

F Appendix: Overview of the SWOT analysis  XII

1 Introduction 

“The use of vegetable oils for engine fuels may seem insignificant today. But such oils may become in the course of time as important as the petroleum and coal tar products of the present time" 

Rudolph Diesel¹ 

As early as back in 1912, Rudolph Diesel thought that vegetable oils will become of major importance in the future. Over the last couple of years, the use of biofuels has grown enormously all over the world. The worldwide production of biofuels ranges at 35 billion liters,² and even though this is only a small percentage of the overall use of petroleum, many people think that there is a bright outlook for the future. 

1.1 Problem Statement 

The topic of this paper is a SWOT analysis of non-fossil fuels for cars within Europe. The picture on the front page shows sunflowers (the seeds of which can be used for the production of biofuels), a manufacturing plant and cars, which represents the process of biofuel production.³ 

1.2 Focus and Limitations 

In the following chapters will be explained, what biopetrol is and which different types of biopetrol exist. Afterwards, a SWOT analysis will be conducted in order to find out about Strengths and Weaknesses of Biodiesel, a special kind of biopetrol, as well as Opportunities in the future and possible Threats. 

There are different definitions existing for the terms fuel and petrol. On the one hand, fuel can have the meaning of regular fuel and petrol as diesel, on the other hand, they can be seen as synonyms, both words used for either fuel or diesel. In this paper, the two terms are used as synonyms. 

As many regulations concerning biofuels within Europe are introduced by the EU, this paper will mainly focus on countries that are Member States of the EU25.⁴ 

2 Biopetrol as a special type of petroleum 

Petrol can be divided into diesel petrol and regular petrol. They both consist of hydrocarbon, condiment and additives, as well as some other minor substances. Diesel petrol and regular petrol differ in burning performance and the amount of carbon they contain. For example, diesel petrol consists of more carbon atoms than regular petrol does, and this is the reason why the emissions of CO2 are higher; one liter of diesel petrol yields to 2,6 kg CO2 emissions when burned, compared to only about 2 kg emissions from regular petrol.⁵ Diesel petrol and regular petrol are fossil fuels derived from crude oil. 

The idea of Biopetrol is to replace fossil primary energy carrier by the use of biomass. As early as during the seventies, it was seriously thought about this idea worldwide, triggered by high oil prices due to the oil crises as well as dependency on other countries for oil. Yet, the idea of biomass never really was followed back then. Today, this topic is current again and talked about widely. This is caused by high oil prices, but also new technologies as well as recent climatic changes. Biological energy sources can be gained from various biological resources including plants grown for this use, such as rape, and biological wastes.⁶ 

3 Different types of biopetrol 

There are many different kinds of biopetrol. It can be divided between non-fossil fuels, such as Biodiesel, Bioethanol and Synthetic Fuels, all of them being energy sources, and for example Hydrogen or Sun Fuels, which are energy

carriers. Due to the fact that both Hydrogen and Sun fuels are not yet used in the market for biopetrols, and they are still at the development stage, in this paper only Biodiesel, Bioethanol, Synthetic Fuels and Other fuels, including vegetable oil, Second-Generation fuels as well as fuel gained from frying fat and sewage sludge, are told about.⁷

[....]

1 Cf R.Diesel, 1912

2 “An EU Strategy for Biofuels”, p.3

3 Cf http://ec.europa.eu/

4 Member States of the EU25 are Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, The Netherlands and Great Britain

5 T. Puls 2006, p.21 ff.

6 T. Puls 2006, p.42

7 Eder 2004, p.8