Unless governments begin to act now on policy initiatives to regulate the potential negative impacts of biofuels, the industry risks losing its momentum and failing to realise its role in the renewable energy mix, warns a new report released today by Arthur D. Little, the global management consultancy.
The report, "
What future for biofuels?" explores the likely impact the Gallagher Review of the indirect effects of biofuels production will have, not only on UK energy policy, but on the long term viability of the global biofuels industry.
Commissioned by the UK government and carried out by the Renewable Fuels Agency (RFA), the Gallagher Review delivered a sober and timely assessment of the current biofuels industry and found that the potential social and environmental impacts of biofuels demand a cautious scaling back of future government mandated biofuels targets.
According to Arthur D. Little's latest report, because the UK has enjoyed pole position in the development of a global biofuels industry, the Gallagher Review's findings will likely lead to a fundamental change in how biofuels are regulated not just in the UK but worldwide.  The report cautions that despite the RFA's findings, as there is still no consensus view between governments, scientists, and industry on the sustainability of particular biofuels, the industry risks slipping into inactivity whilst anticipating the next steps from government.
To avoid this stagnation, the report urges businesses that produce, use, or invest in biofuels to form a pragmatic view right now to determine how they will respond to the challenges of uncertain future regulation and growing concerns about sustainability and societal impact.
Based on an analysis of the various types of biofuels and the processes for production, Arthur D. Little's report outlines how the industry can begin to assess the likely future pressures it could face from regulators, environmental groups, and economic conditions.  It urges biofuels producers and investors to use this knowledge to ensure technological innovation and investment continue in order to ensure the development of a sustainable and socially-responsible biofuels industry.
"Biofuels have gone from being the great hope for clean transport fuels of the future to being in the dock accused of causing deforestation and increases in food prices for the world's poorest people," said Phillip Webster, an author of the report and senior consultant in Arthur D. Little's Energy Practice. "However, the potential remains for a sustainable biofuels industry to develop, supported by a delicately structured balance of strict social and environmental impact criteria, industry-imposed sustainability targets, and strategically aligned government incentives and regulation".
The full report, available online, details the key potential environmental, social and economic impacts of various forms of biofuel production, providing the industry with an outline of the key considerations for developing an effective innovation and advocacy strategy for sustainable biofuels.  It goes on to highlight Arthur D. Little's view of the sustainability of existing biofuels and biofuel development processes; including biodiesel and bioethanol, as well as the projected hopes for future development in: second-generation biofuels, novel high-energy fuel molecules, and processing innovation.
What future for biofuels? is now available for download at
www.adl.com/biofuels.