An integrated analysis of production costs and net energy balance of biofuels

Abstract

Up to now, the “low” price of oil has prevented the development of alternative fuels but with the current high price and increasing scarcity, biofuels could become an economically attractive alternative. However, the economic assessment of biofuels has to take into account total production costs, including impact on agriculture, and the energy balance of first generation alternative fuels (biodiesel and bioethanol). Moreover, plans to produce biofuels from agriculture should not be achieved without considering the latest developments and reforms of the common agricultural policy, which promotes a change towards sustainable rural development based on multifunctional agriculture. From the analysis carried out, it emerges that first generation biofuels do not seem to be the best solution because of high production cost, limited land availability and low net energy balance. Furthermore, only a small quantity of biofuels can be produced as alternative to fossil oil because an incremental production will lead to the rising of agri-food prices. Only second generation biofuels could be a possible solution, although they still require much supplementary research and analysis.