Suggested Citation:
Fulton, Lewis, Geoffrey M. Morrison, Nathan C. Parker, Julie Witcover, Daniel Sperling (2014) NextSTEPS White Paper: Three Routes Forward for Biofuels – Incremental, Transitional, and Leapfrog. Institute of Transportation Studies, University of California, Davis, Research Report UCD-ITS-RR-14-12

Large quantities of low carbon fuels will likely be needed to meet the world’s increasing levels of travel and need to achieve climate change goals. For example, electricity and hydrogen appear to be potentially attractive fuels for light duty vehicles, but these energy carriers may not be suitable for aviation, shipping or long haul trucking. Biofuels made from non-food sources such as agricultural,municipal, and forest waste, high yielding cellulosic crops, and algae are potentially important low-carbon liquid fuel options. Despite billions of dollars invested over the last decade in these advanced biofuels, the jump from labs and small demonstrations to commercial-scale operations is proceeding slowly. Progress is being made, however, at many existing commercial biorefineries to incrementallylower the carbon intensity of fuels; these facilities are improving efficiencies and adding new processfuels, as well as expanding into small scale cellulosic production using existing infrastructure and feedstock supply logistics.

This white paper characterizes the complex landscape of biofuels into three routes: (1) an Incremental route in which progress happens at existing biorefineries, (2) a Transitional route in which “bolt-on” equipment leverages existing production facilities to process small amounts of cellulosic material, gaining experience; and (3) a Leapfrog route that focuses on major technological breakthroughs in cellulosic and algae-based pathways at new, stand-alone biorefineries.

There is a tradeoff between investment risk today and carbon emissions reductions in the future. We examine how the industry is developing over time in terms of technologies and finances. Since 2007, investments in the Leapfrog route have averaged $1.9 billion per year from federal, private equity, and corporate backers. Incremental and Transitional routes, on the other hand, have been supported through biofuel tax credits and low carbon transport fuel policies. We discuss how, to date, California's Low Carbon Fuel Standard (LCFS) and the U.S. Renewable Fuel Standard (RFS) have tended to support the Incremental route. We conclude that the Incremental and Transitional routes will likely achieve the greatest near-term CO2e reductions but that the Leapfrog route is ultimately needed to achieve deep, long-term reductions. Federal and state policies must continue to evolve to create an environment that ensures large-scale, low-carbon, advanced solutions are implemented.

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