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Energies 2014, 7(7), 4430-4445; doi:10.3390/en7074430

Promoting Second Generation Biofuels: Does the First Generation Pave the Road?

1,2,*  and 1,2
1 Department of Economics, University of Gothenburg, 40530 Gothenburg, Sweden 2 Research Department of Statistics Norway, 0033 Oslo, Norway
* Author to whom correspondence should be addressed.
Received: 6 May 2014 / Revised: 3 July 2014 / Accepted: 7 July 2014 / Published: 11 July 2014
(This article belongs to the Special Issue Energy Transitions and Economic Change)
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The U.S., Brazil and a number of European and other countries worldwide have introduced various support schemes for bioethanol and biodiesel. The advantage of these biofuels is that they are relatively easily integrated with the current fossil fuel-based transport sector, at least up to a certain point. However, recent studies point to various negative effects of expanding the production of first generation (1G) biofuels further. 1G biofuels’ problems can be overcome by a transition to second generation (2G) biofuels. So far, 2G biofuels are much more costly to produce. We therefore ask: to what extent is targeted support to 2G biofuels likely to bring costs down? Additionally, are current support schemes for biofuels well designed in order to promote the development of 2G biofuels? We find that the prospects for cost reduction look better for 2G bioethanol than for 2G biodiesel. Bioethanol made from cellulose is far from a ripe technology, with several cost-reducing opportunities yet to be developed. Hence, targeted support to cellulosic ethanol might induce a switch from 1G to 2G biofuels. However, we find little evidence that production and use of 1G bioethanol will bridge the conversion to 2G bioethanol. Hence, to the extent that private investment in the development of 2G bioethanol is too low, current support schemes for 1G biofuels may block 2G bioethanol instead of promoting it.
Keywords: bioethanol; biofuels; learning; second generation bioethanol; biofuels; learning; second generation
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Eggert, H.; Greaker, M. Promoting Second Generation Biofuels: Does the First Generation Pave the Road? Energies 2014, 7, 4430-4445.

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