Towards a Biofuel Policy for Energy Security

Biofuels have been a preferred fuel for a variety of reasons. These include energy security as most of the petroleum-importing countries have a large agricultural base producing ethanol; price stability which is a balancing insurance against mercurial oil price variations and shocks; emissions from burning biofuels in motor engines are considerably less than fossil-based gasoline and diesel; and ethanol is a good and benign octane booster.

Pakistan greatly needs all these four features. Biofuels, however, would not be able to completely replace fossil fuels as neither there would be adequate supplies to replace fossil fuels nor can biofuels be burnt alone as a single fuel.

Biofuels have to be mixed in a ratio of 5-15% into the existing automotive engines without requiring any modifications. However, with modifications higher percentages of biofuels can be used.

Ethanol is a great octane booster with octane rating of RON 113 as against RON 87 for an ordinary ex-refinery non-blended gasoline.

Only the Middle Eastern region appears to have ignored biofuels possibly due to oil abundance and less agriculture.

Pakistan exported ethanol to the tune of $425 million in 2018. In volume terms, it was 653,443 tons and average export price was estimated at $650 per ton. If blended with gasoline at a ratio of 5%, it can be mixed with 1.2 billion litres of gasoline.

Pakistan’s total annual consumption of gasoline is 7.5 million tons. If all of the exported ethanol is made available for blending with gasoline in the country, average ethanol content in gasoline would be around 10%.

It means that all of the ethanol requirement for making E10 gasoline can be met by local production. However, it may be too optimistic to prescribe E10 in one go, it may be advisable that a more realistic E5 target is applied.

Pakistan has not adopted any such target in this respect. No apparent explanation is available for this. Pakistan is a major ethanol producer and reduction in ethanol exports could be a possible reason.

Ethanol is cheaper than gasoline. It means that by exporting ethanol, we tend to lose net foreign exchange as an equal amount of expensive gasoline is imported. Thus, there is a net foreign exchange loss of 10-20% of ethanol exports per year.

Pakistan’s oil sector has been using manganese-based additives in excess quantities to enhance RON levels, prompting complaints from auto manufacturers. A good alternative could have been ethanol as an octane booster.

Reportedly, motorcycles would have some problems using E5. Admittedly, even RON 92 is overkill for motorcycles. A low RON 87 gasoline may be adequate for them. This may cause a price reduction of at least Rs5 per litre, which is significant for the low-income class.

Pakistan is short of cooking oil. A large amount of foreign exchange is spent on import of palm oil from Indonesia and Malaysia. Used cooking oil and animal fat may provide some raw material base for biodiesel. READ MORE