Life Cycle Analysis of Biofuel. A Comparative Study of the UK and Nepal

Table of Contents

Abstract

1.0 Introduction

2.0 Background

3.0 Situation of Biofuels

4.0 Life Cycle Assessment/Analysis

5.0 Description of a Complete Life Cycle Analysis of Biofuel crop

6.0 Life Cycle Inventory Analysis

7.0 RTFO in the UK

8.0 Would the RTFO Work in Nepal?

9.0Results

10.0 Discussion

11.0 Suggestion and Recommendations

12.0 Conclusion

13.0 References

Abstract

Biofuels; this renewable source of energy is gaining popularity all over the world to fulfil the global energy requirements. In Europe, including the UK, biofuel is used as liquid transport fuel. However, it is not used as widely as what people estimate. Therefore, the world is facing the problems of harnessing of renewable energy resources, and there are greater concerns about the emissions produced by burning of fossil fuels, such as petroleum and coal, it’s use is unquantifiable and hampering the world’s living ecosystem.

Accomplishing the ever increasing demand of energy and to mitigate the problems of climate change by reducing GHG emissions from transport fuel and to promote fuel security and reduces the imports of fuels from energy rich countries, European Union has formulated Biofuel Directive (2003/30/EC) stating that the member states will implement this policy to include at least 5.75% of biofuel in the fossil fuel and increased the recent scenarios of 7% to 20% by 2020. Supporting the directive, the UK government has formulated RTFO policy to implement to reduce the use of fossil fuel by 5% in 2010 and follow the process to obtain the renewable target.

Basically, this study focuses on the Life Cycle Analysis (LCA) of biofuel crops as a source of biofuel, such as biodiesel and bioethanol to be used in transportation sectors to meet the renewable target by reducing the GHG emissions and imports of fossil fuel. The subject of the study also gives an overview of the comparative study of the impacts of growing biofuel crops in Nepal and in the UK on environmental and socio-economic issues, like impacts on land, water, biodiversity, and food and energy security.

At the outcome of the study, will it be helpful to coin similar model to RTFO in Nepal and gives hint how the model is unfair to implement in Nepal.

Key words: Biofuels, fossil fuels, LCA, GHG emissions, impacts.

1.0 Introduction

Biofuels for transport produced from biomass is getting considerable attention in Europe and around the world as a strategy to alleviate the problem of climate change by reducing GHG emissions from transport, to improve fuel security and as a response to increasing oil price. By offering alternative blend of petrol and diesel with biofuels and contributing to regional development by improving employment activities for farmers via energy crops (Bomb et.al, 2006).

Looking at the present energy scenario of Nepal, it can be said that less than half (48.5%) of the population have access to the electrical power (Pradhan, 2009); nearly 90% of the urban population is connected to the power grid; only one fourth of the people in the rural household are benefitted by electricity (World Bank, 2007). Regarding the fuel source, it is certain that Nepal has to depend upon fuel from India. Nepal Oil Corporation (NOC) is one and only the registered oil corporation in Nepal, which always imports fuel from India and sells it at lower prices than it pays to import. In September 2007, it was reported that NOC lost $2.7 million (Republica, 2009). Similarly, there was significant increase in transportation cost (25%) in first 6 months of 2008(IRIN, 2008). Mentioning the situation of renewable alternative fuel such as biomass, which comprises of about 92% of the total share of primary energy in 1994/95, may be a vital energy source in Nepal. Being a landlocked country, Nepal has to face challenges of fuel price rises. The country should think to diversify its fuel options such as kerosene, liquefied petroleum gas (LPG), biogas, solar and electricity for household sectors and liquid bio fuels for example bio ethanol and bio diesel in the transportation sector.

Moreover, climate change is the major challenge faced by the world, the impact of GHG emissions on the global climate is technically well established. Climate change has significant impact on Nepal and its economy (Francis and Bell, 2008). Domestic transports presently represent around 304,000 tonnes of CO2 emissions (petrol: 54.4%, diesel: 40.3% and LPG: 5.3%) in 2006/07(Silveira and Khatiwada, 2010), excluding international air travel. This figure may go up for the short term due to the high transport demand and economic growth, but in the long run; it would be at stable level due to some demographic changes. Furthermore, the use of alternative fuel instead of fossil based fuel may help to decrease emissions despite increases in transport demand (Francis and Bell, 2008). An introduction of E10, also called as gasohol, is a mixture of fuel containing 10% anhydrous ethanol and 90% gasoline, which may be exercise in internal combustion engine without modification. They are rated as 2 to 3 octane higher than regular gasoline and apt in some reasons for emissions (Wikipedia), it can decrease amount of CO2 emissions by 11,283 tonnes (7% of the total gasoline emission) and an inclusion of E20 scheme may reduce the emission by 23,397 tonnes, which represents almost 14% of total gasoline production (Silveira and Khatiwada, 2010).

In a nutshell, life cycle analysis (LCA) of bio fuels will be conducted taking 1/1 crop for both the cases, i.e. one crop for biodiesel and one for bio ethanol. For making comparison between the UK and Nepal, 4 crops are taken, each for each case and for each country. Hence, oil seed rape (OSR) and wheat are taken from the UK for the purpose of extraction of bio diesel and bio ethanol respectively. Similarly, mustard and sugarcane are taken for the purpose of manufacturing bio diesel and bio ethanol from Nepal.

RTFO is a policy framework in the UK for reducing GHG emissions from the UK road transport. It lays a commitment on fuel suppliers to ensure 5% inclusion of biofuel in fossil based fuel in the UK by 2010(DFT, 2006; Calu, 2006; Government of the UK, 2005 and Upham et.al, 2009). At the end of 2008, bio fuels in the UK accounted for 2.73% of transport fuel supplied, of which 84% was supplied by bio diesel and 16% was supplied by bio ethanol (Upham et.al, 2009).

Regarding the situation of transport fuel in Nepal, the government of Nepal (GON) had decided to blend 10% ethanol in the petrol to cut off the import of petroleum products from India and to enhance the domestic energy security. However, it was lagged behind as the paper agenda rather than its implementation due to technical and economic problems (GON, 2008). There is no blend of ethanol found in the market for transport sector in Nepal. At the same time a high level committee was formed to find outlets to deduce the use of petroleum products by using alternative energy (MOEST, GON, 2008).

1.1 Objective of the Study

To study the increase in the utilization of biofuel crops in the energy sector, mostly liquid transport fuel with the aim of reducing GHG emissions and help in achieving the reduction targets. Secondly, the study will help in making comparison between the situation of the UK and Nepal and it critically assess the complete bio energy production chain to:

- Ensure GHG emissions and energy balances of production process are favourable.
- Determine the environmental and social impacts of adopting a similar scheme to the RTFO in Nepal.
- Examine the sources of alternative energy to the fossil based energy.

1.2 Scope and limitation of the study

Data and literature will be used to give a detailed overview of life cycle analysis (LCA) of bio fuel, especially road transport liquid fuel, i.e. bio diesel and bio ethanol in this research. Different elements, such as effects of bio fuel on livelihood, food security, conservation, soil, water will be discussed during the study. After describing the whole process involved in LCA, the study will be applied to compare the situation of the UK and Nepal. It tries to dig out some of the problems that arise while using the land to grow biofuel crops instead of using it to grow food crops. For example, the aim is to determine whether adoption of biofuels programme would have a positive effect in Nepal.

2.0 Background

2.1 Background of Nepal Nepalese Economy

Nepal, a landlocked country situated between India and China, has population of 26,427,399 which grows at 2.25 % per year (Population Census, 2007). It is found that more than 80% of the people in Nepal are below the poverty line (World Bank, 2003).It has a poor economy with only US $ 350 GDP per capita (CBS, Nepal in Figures- 2007) and stands at 107th position in the world by GDP (nominal) (GDP is equal to 12,531 million of USD) (World Bank, 2009) with GDP growth rate of 4.7 (CIA World Fact book, 2009). The economy largely depends upon rain fed agriculture, has a high level of unemployment (46%, 2008), low energy security, and is expected to be vulnerable to the effects of climate change, which is mainly due to its geographical location (Pradhan, 2009).

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(Source: www.sanog.org/sanog4/country.htm). Figure 2.1: Showing the map of Nepal

Agriculture Driven Country

Around 65 % of people in Nepal depend on agriculture (Agriculture Diary, 2008/2009). Total cultivated land of the country is 3,091,000 hectares (ha) and uncultivated land is 1,030,000 ha. Total irrigated land till 2006/07 is 1,031,137 ha. Rice is the staple food of Nepal, followed by wheat and maize (Agriculture Diary, 2008/2009). Oilseed crops, potato, tobacco, sugarcane are the main cash crops in Nepal. Similarly, lentil, chickpea, black gram, soybean are used as bean. The importance and scope of tea and coffee is unavoidable in Nepal, which can be the source GDP to the country. Ginger, garlic and turmeric, cumin are spices crops in Nepal (Agriculture Diary, 2008/2009). Although the share of agricultural GDP is falling down by 1% annually since 1974-75, favouring non-agricultural sector(ADB-UNCTAD, 2008), agriculture is still be the largest sector of the Nepalese economy and the main source of the livelihood for the population living in Nepal.

The trends of annual growth of GDP (in %) in Nepal from 2000 to 2005 is shown in Table 2.1 below.

illustration not visible in this excerpt

Source: ADB-UNCTAD, 2008.

Table 2.1: Showing the trends of annual growth of GDP in Nepal from 2000 to 2005.

Energy Security

To date, only 48.5% of the people in Nepal have access to electricity (Pradhan, 2008). Most of the people in village area are not getting the facility of electrical power; about 27% of them do get that facility (World Bank, 2007). From the previous time, biomass comprises of about 92% of total primary energy consumption since 1994/95 is an important source in Nepal (Pradhan, 2009).

Nepal has to depend on India for fuel completely; it has to import almost 100% of petroleum product (shown in Figure 2. 2 below) from India such as petrol, diesel, kerosene and it has to sell them at much subsidised price, bearing a huge financial lost to the government of Nepal. The transportation cost was raised in first 6 months of the year because of oil price increase in the global market. The merchandise export price in 2005/06 was $ 7.94 million and its expenditure was the greatest in petroleum imports, which accounted for 53% of the total export value. However, the merchandise value was less in 2000/01(Ministry of Finance, 2006).

Source: EIA, International Energy Annual , Short Term Energy Outlook; Table 3a and Table 3b(forecast values). Figure 2.2( left figure) : showing the consumption of petroleum products in Nepal and figure 2. 3(right figure): shows the net exports and imports of petroleum products in Nepal.

The Department of Transport Management, Government of Nepal revealed that 752,446 m³ of petroleum products (diesel: 39.8% and gasoline: 13.1%) were imported from India to meet the transportation fuel required by the country in the year 2006/2007. It is depicted the number of vehicle in the capital city; i.e. in Kathmandu rose unexpectedly since 1990/91 and greater than half (56%) of them were seem to be registered in the Kathmandu Valley (Pradhan, 2009).

It is the grim reality of Nepal that it is a landlocked country, which is vulnerable to the rise in fossil fuel prices. Therefore, there is no way rather than diversifying its fuel options such as kerosene, Liquefied Petroleum Gas (LPG), biogas, solar and electricity for household uses and liquid biofuels such as bioethanol and biodiesel in the transport sector.

However, the country is struggling against a fuel crisis and protests against rises (Khatiwada and Silveira, 2009). One and only the sole registered organization, Nepal

Oil Corporation (NOC) is selling petroleum products to its clients in fewer prices than it pays to the Indian Oil Corporation (Kantipur Newspaper, 2008).

Climate change and expected impacts

The combustion of fossil fuel, for example petroleum and coal release unexpected amount of greenhouse gases such as CO2 to the atmosphere there by rising the temperature of the earth by some extent. Similarly, deforestation and forest fire are two key factors that contribute to global warming in Nepal. Furthermore, the burning of fossil fuel also releases nitrous oxide (N2O) which causes respiratory problem due to the formation of ground level ozone. Various impacts of climate change that are significant in Nepal are the fluctuation in seasons, temperature changes, such as its too cold during winter and its more hot in summer, uneven distribution of rainfall, partial melting of ice in the Himalayan region of Nepal, less production of crops as compared to the previous year. The biggest threat from climate change is likely to come from Glacial Lake Outburst Flooding (GLOF) and the subsequent consequences of ecosystem degradation and reduction of fresh water for irrigation. The threat of GLOF is more prevalent in countries with high mountainous terrains, such as Nepal, where global rise in temperature will melt the ice of big glacial resulting into glacial lakes. The flood destroys bridges, homes, agricultural lands making more people food insecure (Horstmann, 2004). It has been highlighted that GLOF and variability runoff are two critical impacts of climate change in Nepal. This may pose significant impact on hydropower, livelihood and agriculture (Horstmann, 2004).

2.2 Background of the UK

RTFO in the UK

The European Directive on Bio fuel 2003 states that the implementation of the directive will force the member states to use biofuel for transportation. The directive in a commitment on using biofuel, such as bioethanol and biodiesel in transportation sectors and inclusion rate is 5.75% by 2010. Similar target is made in the UK, which is 5% by 2010. The basic thematic purpose of this target is to reduce the emissions of GHGs and to increase fuel security in the UK by reducing the import of fossil fuel with small number of energy rich nations. However, a number of possible changes such as land use, importation, efficiency of fuel, CO2 emission mitigation have to be addressed to meet the require target by the year 2010( Hammond et.al,2007).

3.0 Situation of Biofuels

3.1 Ethanol from wheat in the UK

illustration not visible in this excerpt

Figure 3.1: Showing the ethanol production Process.

Fermentation of starch and sugars followed by distillation yields bioethanol from wheat and sugar beet, which are then mixed with petrol, up to 5% inclusion rate, there is no any modification required in engines. Furthermore, bioethanol can be used with much more modification at 22% or even more up to 75-95% in highly modified engines (Rowe et al, 2009).

It is forecasted that a significant change in land use is needed to ensure sufficient feedstock production for meeting the demand from biomass based renewable energy. It is suggested that about 7% of land area of UK agricultural land (which is equivalent to

1.3Mha of 18 M ha) is needed for the production of energy crops for electricity, heat and transport to meet the carbon emissions targets for 2010(Rowe et al, 2009).

Biofuel not only reduce 98% reliance on fossil fuels on transport sector, but it can also expand and improve security of fuel supply and offer alternative sources of income to the rural people and it could be helpful to reduce the emissions, acting a potent missile to combat such emissions in the environment ( Hammond et al,2007). Several commentators have suggested that about 0.36 million hectares (M ha) of wheat and 0.23 M ha of sugar beet is required to produce bioethanol, and 1.15 M ha of OSR to produce biodiesel to meet the UK target of renewable biofuels by 2010( Rowe et al, 2009).

3.2 Ethanol from sugarcane in Nepal

It is predicted that 18,045 m³ ethanol could be produced from sugarcane in Nepal without compromising the food situation (Silveira and Khatiwada, 2010).

Similarly, Silveira and Khatiwada (2010) estimated that with the inclusion of ethanol in petrol, there would be 14% of gasoline import reduction and with an annual savings of US $ 10 million. Furthermore, they are of the view that the use of ethanol in the transport sector will leave a positive environmental effect while reducing CO2 emissions and combating pollution in the Kathmandu valley. The use of ethanol instead of petrol will help in reducing imports of oil products and there will be minimal wastage of resources from the Nepalese economy.

It can be forecast that the higher demand of bio fuels will maximize pressure on agricultural commodity prices. For example, if any of the biofuel crops like sugarcane, oilseed rape, mustard and wheat that are used to produce biofuel; they need extra input to produce them commercially. The diversion of those crops from food products to higher priced bio diesel or bio ethanol would limit the ability of the increased supplies to help contain international prices.

It is also an obvious fact that the higher oil prices lead to the greater price for food production as a result of high inputs, such as fertilizers, machinery, seeds, pesticides, herbicides, and which in return lead to higher food prices although there is no demand for bio fuels.

3.3 Biodiesel from Oilseed Rape (OSR) in The UK

Vegetable oil obtained from OSR can be changed via esterification process to biodiesel. This is an option for complete replacement for diesel, but now only 5% inclusion rate is warranted .Many varieties of vegetables and animal fat is used as feed stock to produce biodiesel, but oilseed rape (OSR) is considered to be the most feasible crop from processing point of view in the UK (Rowe et al, 2009).

In 2008/09, UK consumed 1087 million litres of biofuel or 2.7% of road transport fuel (Renewable Fuel Agency, 2009), of which 84% was bio diesel and 16% was bio ethanol. Most of the bio diesel was imported from other countries with only 6% of which was produced from home grown feedstock. OSR as a feedstock contribute to 29% of the biodiesel production, and UK grown OSR supply 7.5% or 20 million litres.

To fulfil the RTFO commitment of 5% of biofuel from home-grown rapeseed, the area of OSR need to be increased from 598,000 hectares (Defra Oilseed Rape Survey, 2010) to a total of 1.4-1.5 million hectares(Twining and Clarke, 2009). The above mentioned statistics highlights the great potential demand of oilseed rape in the UK. However, reaching the target is really a challenging task at this moment. The crop may face rotational constraints due to pests and diseases, and without good agronomical practices to control weed infestation in the field, the increase in area of OSR is not as easy as what people think.

In the World, much attention is paid to expand bio fuel industry to mitigate the impact of global warming, and to fulfil the demands of energy security within country and outside. Because of those concerns, many countries have established biofuel targets and pledged to help in the development of the biofuel based industry within their country. Situation of UK biofuel industry is still in its infancy

(www.hgca.com/publications/documents/UK_Biofuel_situation.pdf). However, the formulation and effective implementation of RTFO has increased the pace biofuels use in the country. Hence, biofuels is the main alternatives to fossil based fuel for transportation. In the UK, biofuel represented about 0.53% of total road fuel in 2006(170 ML of bio diesel and 93 ML of bio ethanol). However, its use is expected to grow in future as the RTFO is working at a good pace.

To attain RTFO target, there is a need to increase to 2.5 million tonnes of biofuel used by 2010. For that, about 3 million tonnes of OSR and 3 million tonnes of wheat would be required. It is also estimated that 0.4 M ha of wheat and 0.8 M ha of OSR would be demanded to supply that estimated production target (www.hgca.com/publications/documents/UK_Biofuel_situation.pdf).

3.4 Biodiesel from oilseed crops in Nepal

Oilseed crops in Nepal covers 184,218 ha area, which is almost 5.95% of the total cultivated land of Nepal (3,091,000 ha) with total production of 135,660 MT (Agriculture Diary, 2008/09).

There is curiosity about the production of liquid transport fuel in Nepal to decrease the percentage dependency of fossil fuel with India and to uplift the status of rural poor by creating jobs and employing them in such sectors. There could be various crops picked for the production of renewable energy in Nepal, which may include oilseed crops, wheat, maize, jatropha. Producing biofuel energy in food deficit countries like Nepal is chimera but in long run it might be good source of revenue to the country. Production of oilseed crops provide diversity of benefits, such as it improve the soil fertility by fixing nitrogen in the root nodules, it also acts a cover crop; a crop grown at the period of main crop production that prevent that land from soil erosion and it also adds humus or nitrogen to the soil. The by-product obtained such as straw, meal cake can be the good source of feedstocks for the cattle.

4.0 Life Cycle Assessment/Analysis

4.1 Introduction

Life Cycle Assessment (LCA) may be defined as: “the compilation and evaluation of inputs, outputs and potential environmental impacts of a product system throughout its life-cycle”. Life cycle analysis (LCA), also called life cycle assessment is a computational tool for measuring the effectiveness and greenhouse gas (GHG) impact of energy systems (Davis et al, 2009).

Amongst many reasons for conducting LCA studies in the possibility of comparing the total environmental impacts of alternative products or services; life cycle analyses are a potential tool for assisting policy analysis and decision making. Thus allowing the industry to deliver required information about the environmental impacts to promote best available technologies from environmental point of view and to communicate how the sustainable environmental activity can be achieved (Sharma, 2009). Considering the environmental and energy impact, LCA shows a direct and feasible contrast between two products or services taking so many factors, so many aspects ,such as the distance to where the input have to be sent, materials used for packing. This sort of survey helps to find out the correctness of the assessment.

By this kind of comparative review, LCA is supposed to be a perfect tool to consider costs and benefits of environment and greenhouse gas emissions.

Life cycle analysis is also a method to quantitatively measure the environmental impact and the energy requirements of a product or service from cradle to grave. The synopsis of the statement is supported by defining ‘’LCA as a holistic tool for industry which evaluate the environmental impacts associated with the resource extraction, transportation, manufacturing, use, disposal/recycle’’ (Sharma, 2009). During the time of development of energy analysis in 1970s, there was a great extent of depletion of the fossil fuel resource due to the first oil shock in 1971(David et al,2005), energy analysis emerged as a means of calculating total energy required to provide products and services. Many of the approaches and conventions incorporated into LCA have their roots in the principles of energy analysis. Broader environmental concerns and implementation of environmental management have resulted in increased interest in LCA (Mortiner et al, 2003). LCA can be used for informing policies that govern the use of alternative energy. LCA is more prominent in the field of Engineering and economics rather than in ecological and plant systems. For example, ecologists relate it to a food web or ecosystem model that traces the flux of energy through the system. The System limits taken in the example can be defined by physical boundaries, time or the number of tropic level taken into an account (Davis et al, 2009).

At the time of land conversion and growing of crops to produce biofuel, some sort of ecological impacts are associated; which are very important determinants of overall sustainability of the biofuel as an energy source (Davis et al, 2009).

The complete life cycle of the fuel production includes everything from raw material production and extraction, processing, transportation, manufacturing, storage, distribution and use (Soimakallio et al, 2009).

illustration not visible in this excerpt

Figure 4.1: Shows Life cycle analysis of biofuel (Source: FAO, the State of Food and Agriculture, Biofuels: Prospects, Risks and Opportunities (2008)).

A fuel chain and its lifecycle stages cause various harmful impacts on the environment. Furthermore, it has harmful effects or benefits of different ecological and social dimensions. Thus, the total management of complete fuel chain (cradle to grave) from various perspectives is of crucial important to get sustainable fuel products and systems in our society. Due to the above reason, LCA seems to be a valuable tool and its use for the assessment of the sustainability of not only fuel products, but also other commodities has also increased greatly in recent years (Soimakallio et al, 2009).

4.2 Stages of Life Cycle Assessment

Life cycle assessment is a complex term, which has different stages. Some commentators have said that LCA is comprised of 6 main stages, which are: goal and scope definition, life cycle inventory analysis, and life cycle impact assessment, life cycle interpretation, reporting and critical reviewing (Mortiner et al, 2003). However, the ISO 14000 series of standards emphasized only four stages that are involved in life cycle assessment as shown in diagram 2 below.

illustration not visible in this excerpt

(Source: Wikipedia).

Figure 4.2: Illustration of LCA phases. The phases are interlinked because the output of one phase will explain how other phases are completed.

4.2.1 Goal and Scope Definition

Goal and scope definition is the first phase of the LCA in which the experts make and specify the goal and scope of study in relation to proposed application (ISO 14044, 2006). ISO 14044 again focus that goal and scope should also focus on the overall approach used for establishing system boundaries.The goal of a life cycle assessment establishes the proposed application of following outputs, the reasons for why these outputs are generated and who could be the potential audience for these results. Scope of a life cycle assessment gives a detail measurement of the study and product or service which is being examined. In particular , scope indicates the ‘’functional unit’’ which is being explored by providing a clear, full and definitive description of the product or service which enables subsequent results to be interpreted correctly and composed with other results in a meaningful manner. Hence in this case, functional unit could be one kilogram of biodiesel or one litre of it obtained from rapeseed plant by-product. Alternatively, functional unit could be an amount of energy available typically mega joule (10⁶ joule), when either fuel is burnt or a given distance travelled by a road vehicle using either fuel. In recent discussion on agriculture interpret on plurality of functional units-expand, ie .both environmental impacts per kg of product (the essential function of production) and per unit of land area (the occupation of the countryside) (Nemecek et al. 2001 and 2005b; Payraudeau and VanderWerf, 2005).

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