The Biggest Thing Anywhere Ever? The Story behind the Global Biofuels Alliance

September 13, 2023

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by Jim Lane (Biofuels Digest) ... What’s missing? The financial industry and investors in general. An actual scope of work. A leadership team. None of those impossible to produce, but none of those (yet) done — so, consider the Alliance to be a work in progress, for sure, and make some allowances when it comes to timelines and scope.

Look Southward, Pard’ner

One way to look at this announcement is to see India, using its presidency of the G20 this year as a platform to launch this initiative — if the line-up of nations was less than the G20, if the scope of work is still a little fuzzy, never mind. Brazil has the presidency of the G20 next year, it’ll be their job to add more members and definition. It’s tempting to see India-US-Brazil and focus on India-US or the US alone.

In this case, that would be a mistake. Look south.

The Global South has an awful lot of biomass, lacks the infrastructure to execute decarbonization via “electrify everything”, would like to build export markets to improve farm income, and wants this sector to thrive. Brazil couldn’t agree more. The US has been divided, Europe has been unhelpful at the Brussels policy level even if terrific in the technology arena. Despite an underwhelming response when India first floated the outline of this Alliance within the G20 community some time ago, and the obvious absence of meaningful support from Europe (excepting Italy, Finland and Iceland), they’ve decided with the Brazilians to go forward, for years if necessary, if necessary, alone.

The BRICS

Absent from the G20 stage were Russia’s President Putin and China’s President Xi, who joined the other members of the BRICS alliance (Brazil, Russia, India, China and South Africa), in announcing last month that they are increasing their group to a total of twelve members with the adds of Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates. Applications have been received from 14 other nations, including Bahrain, Kuwait, Thailand and Vietnam. A number of African nations plus Turkey and Syria are reported to be interested in this attempt, frankly, to create a rival to the G20 and shift more voice to the Global South in the global dialogue — with China and Russia merrily encouraging this rival to North American-European hegemony in world affairs, and using an accidental association to effect it. After all, BRIC is an acronym coined by a Goldman Sachs analyst, it just happened to become useful.

Not every nation in the BRICS is a nation that aims at destroying the G20. Some things are easier to do within the G20, such as this Alliance. What does Russia care about biofuels? And, lately, what does China?

A bidding war has emerged for India’s friendship, the Global Biofuels Alliance being table stakes for the United States in its long-term aim to replace China with India as its major US trading partner in that region of the world.

Why Jelly in Delhi?

Yes, the US has a long-standing interest in bioenergy R&D, and deep investments, but the US Trade Representative office would be queasy at the idea of subjecting US trade policy to a “virtual marketplace” in biomass operated by a political organization. After all, the US is still deeply divided over Obamacare and single-payer medical insurance. It wasn’t so many years ago that critics of ethanol dubbed it “Government Gas”. Government exchanges, mandates, private players controlled by a government regulator? Get out the Obamacare playbook, please.

So, yes, the Alliance is framed in vague terms. For now, a strength.

An actual, vibrant international development agency for agriculture-based energy is something the US went to some lengths to discourage in the heyday of the the old Global BioEnergy Partnership, known as GBEP.

Climate is more urgent, yes. But, with bioeconomy deployment the Biden Administration has been decisive in its indecision, committed to non-commitment — one footsie in to placate the heartland, one footsie out to placate the “electrify everything” crowd. For the Great Invertebrates of Washington DC, an Alliance made of jelly might be just the recipe.

What changed?

What’s really changed is not US attitude, but the global set-up. The world is not an American-European stage — hasn’t been for a while, but less so now than ever, excepting for the power of a revived NATO to redefine the conflicts on the eastern side of Europe.

The Middle East? They’re joining the BRICS in droves. And, you have to say, you wonder how we could possibly live in a world where the Emirates are joining the Global Biofuels Alliance at the outset, and no France. Iceland but no Germany, Singapore but no Malaysia, Bangladesh but no Thailand.

It’s interesting, the Emirates. Yes, they’re joining a lot of initiatives, they have a massive sovereign wealth fund and can see the headwinds that will come from the reliance on oil. HQ’ing this Alliance in Dubai might send the very signal that the world has shifted south, decisively, that the global bioeconomy needs.

Calling in the Coordinates

Futuria Fuels CEO Rebecca Groen (Futuria is the dedicated business unit within SHV Energy for renewable liquid gas development)) said that Futuria aims to play a key role in this initiative, and commented:

BREAKING NEWS! Yesterday the much-anticipated Global Biofuels Alliance (GBA) was launched at the G20 Summit in India. The platform will bring in synergies between G20 nations, international associations and industrial partners for sustainable biofuels production, trans-national energy financing, technology partnerships as well as developing appropriate policy and legal frameworks.

That’s a terrific summary of the ambition, that “what might the Alliance be one-day”. We’ll see whether this government-led, government-run Alliance will be able to nimbly foster trans-national energy financing and so forth. I have long suspected, since first getting word of the Alliance, that the organization needs a counter-party based in industry, think of the Alliance as a big, bright green piece of powerful artillery that needs some grunts in the field to call in the coordinates.

The four tasks ahead? READ MORE

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Excerpt from Manila Times: Here in the Philippines, the Biofuels Act of 2006 mandates that all liquid fuels for motors and engines must be blended with biofuel. The current mandated ethanol blend for gasoline is 10 percent, which has not changed since 2012 despite pressure from the Ethanol Producers Association of the Philippines (EPAP), which has repeated and quite correctly emphasized that the law actually mandates a blend of at least 20 percent. To put that in perspective, increasing the biofuel blend to 20 percent would reduce the Philippines' annual demand for diesel and gasoline by approximately 7.5 million barrels.

...

The specific activities or programs of the GBA are not yet defined, which is understandable given that the alliance has only just been launched, but according to official statements about it from the G20 presidency, it seems to have three general objectives. First, it will serve as a virtual marketplace for countries and stakeholders to better manage global supply and demand. Second, it is envisioned as a knowledge hub to exchange research and best practices. Third, it seeks to harmonize sustainability practices across member states and support development of new biofuel sources.

The Philippines would obviously benefit from all of these objectives as it is an important market for biofuels, as well as a potentially important source of them, mainly from the country's sugar industry. Put bluntly, the country needs assistance to realize that potential, because in spite of being able to grow enough sugar and other crops to produce an exportable surplus of ethanol, inefficient management and insufficient agricultural and processing infrastructure prevents that now. Earlier this year, EPAP disclosed that they would have to actually import up to 500,000 metric tons of molasses, a byproduct of the sugar milling process used in ethanol production, to meet their targets during the sugar nonmilling seasons. This is not because the total sugar harvest cannot produce enough molasses, but rather that not enough is produced due to a lack of capacity.

In addition to the direct economic benefits of expanding participation in the global biofuel sector, joining the alliance would also give the Philippines access to a few new channels of funding and other support for climate adaptation and mitigation goals. In addition, joining the GBA would offer some geopolitical advantages to the Philippines as well by diversifying its global trade and cooperative relationships. In a period of heightened tensions with China, the Philippines' most important and most problematic international relationship, diversification is a most prudent strategy. READ MORE