Biofuels and the energy transition: Green sprouts or biowashing?
- Biofuels come from biomass, and as such contain biogenic CO₂, while fossil fuels contain fossil CO₂
- As a result, burning biofuels does not increase the concentration of CO₂ in the atmosphere, which is why biofuels are deemed relevant to help decarbonise our economies
- However, ‘bio’ does not equal ‘sustainable’, because sourcing biomass and turning it into biofuels can have significant harmful impacts
- A careful and comprehensive lifecycle analysis is needed to assess the merits of any biofuel or biofuel project
- Two areas must be especially scrutinised: Is there competition with the food chain? And is there damage to the land and to local communities?
- We believe biofuels can be a good solution in the energy transition, but that sustainable jet fuel and biomethane have better credentials than bioethanol and biodiesel
- We suggest sustainably-minded investors could invest in this space, but selectively and after careful due diligence