Biofuels and biogas may have niche applications, but they cannot replace fossil fuels at scale
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Despite their green image, biofuels and biogas are neither effective nor economical solutions for our energy needs. They remain costly distractions from more viable energy alternatives.
The Climate Crisis lobby frequently promotes biofuels and biogas as solutions to capture methane, a potent greenhouse gas, and as substitutes for natural gas, gasoline, diesel, and even jet fuel. However, both technologies suffer from inefficiencies, high costs, and limited scalability, making them unfit as long-term solutions for Canada’s energy demands.
Biofuels, primarily ethanol, are produced by fermenting biomass such as corn or sugarcane, which is then distilled into alcohol. The leftover material is often sold as organic fertilizer. On paper, this seems like a win-win: it repurposes agricultural waste and reduces reliance on fossil fuels. In practice, however, biofuels create more problems than they solve.
 Why biofuels and biogas fall short as energy solutions. |
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A significant portion of biofuel production relies on perfectly edible food crops, diverting resources from food supply chains. During the 2007-2008 global food crisis, for example, rising demand for biofuels was cited as one of the factors driving up food prices. This diversion of food crops not only wastes valuable resources but also makes food less accessible and more expensive for consumers, disproportionately affecting low-income populations.
Legally, oil refiners in Ontario, several U.S. states, and countries like Brazil and India must buy ethanol despite its higher cost relative to its energy value. Ethanol is blended with gasoline and sold at service stations. Unfortunately, this blending does little to reduce demand for petroleum-based fuel, as ethanol contains less energy by volume than gasoline – vehicles using ethanol blends experience lower fuel efficiency, as confirmed by the U.S. Energy Information Administration.
Even from an environmental perspective, biofuels fall short. Lifecycle emissions analyses reveal that the carbon emissions from growing, harvesting, and processing biofuel crops often negate the environmental benefits of burning ethanol. Yet the biofuels industry continues to thrive, heavily subsidized and protected, particularly in North America and Brazil.
Biogas, often produced from waste materials such as sewage, food scraps, and agricultural by-products, is less controversial than biofuels. Its reliance on waste makes it an admirable way to repurpose material that would otherwise require costly disposal. Denmark, for instance, has successfully integrated biogas into its energy mix through aggressive policies and subsidies, demonstrating how this technology can be viable in certain conditions.
However, biogas faces its own set of challenges. Producing biogas involves removing contaminants, such as water vapour and other gases, before the methane can be used. This purification process is costly, as is connecting biogas facilities to existing natural gas distribution systems. Even after purification, biogas remains more expensive than fossil-fuel-derived natural gas.
Biogas also has a scalability problem. According to the Canadian Biogas Association’s 2020 report, Canada’s realistic biogas potential is 155 petajoules (PJ) annually. By comparison, Canada consumed 4,164 PJ of natural gas in 2023. This means biogas could meet only 3.7 per cent of Canada’s natural gas demand – a fraction too small to replace fossil fuels meaningfully.
While biogas might make more sense in densely populated countries with high-intensity agriculture and expensive conventional natural gas, even there, its adoption remains limited. Aside from Denmark, countries like Ireland, the Netherlands, Germany, and South Korea have yet to achieve significant integration of biogas into their energy systems.
Expensive government programs will not make biogas a significant part of Canada’s energy future. While improving the efficiency of biogas production and gathering systems might reduce costs over time, it is unlikely to become a significant energy source. Biofuels, meanwhile, remain a heavily subsidized industry with minimal environmental or economic benefits. Legal mandates forcing refiners to blend ethanol with gasoline only sustain an inefficient system that does little to reduce emissions or fossil fuel dependence.
Biofuels and biogas may have niche applications, but they cannot replace fossil fuels at scale. Expensive government programs will not make it so.
Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy.
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