| Biofuels have many different influencing factors, such as technical (e.g. raw material supply, conversion and engine technologies), economical (e.g. fuel and engine modification costs, infrastructure) and ecological/political factors (e.g. greenhouse gas emissions, efficient land use, reduced dependency on crude oil).
At the end of 2006, FESTEL CAPITAL carried out a quantitative comparison of different biofuels (e.g. biobutanol, bioethanol) to identify interesting technologies for investments. An analysis of customer acceptance and attitude towards biofuels showed that important to customers are prices no higher than those of fossil fuel, no engine modification costs or loss of power, high availability and easy handling.
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Biofuels need to meet the following criteria: competitive production costs, no additional distribution/infrastructure costs, problem-free blending with existing fuel types as well as similar chemical/physical properties. Therefore, as costs for the customer are a deciding factor for market success over the short to mid term, the comparative analysis considered only the economical factors and not the ecological aspects.
In order to identify interesting biofuel technologies for investors, publicly obtainable data regarding production costs were evaluated and included in a consistent model calculation. Besides plausibility checks, data comparability was evaluated and, if necessary, corrections were made. The results showed the costs and profit margins of the considered biofuels. As well as the raw material costs and production costs also the capital costs, blending costs and distribution costs to the filling pumps were calculated for each fuel separately. In order to reflect the various development stages and the economies of scale, realistic scenarios were calculated. In the calculation and comparison the normal mineral oil tax was considered also for biofuels. The profit margin (price at the filling station minus all costs and taxes) was the criterion for the profitability.
In the 2006 evaluation, a price of US$ 60 per barrel of oil for petrol and diesel production was taken and the results were conclusive. Both bio-diesel and bioethanol produced in Europe from wheat are not profitable. The producers' high margins are only due to the current mineral oil tax concessions. Also, biomass-to-liquids (BTL) fuel can also not be produced competitively. At the taken oil price, only bioethanol and biobutanol pro-duced on a large scale from lignocellulose-containing raw materials have the potential to be produced competitively. The model calculation showed that, in Europe, biobutanol produced from lignocellulose is mid term the most cost-effective biofuel, which can be produced with 38 Euro cent/litre and, therefore, with a reasonable profit margin without tax exemption.
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