"Biopetrol": A swot analysis of non-fossil fuels for cars within Europe

II

A Abstract

Fuel and diesel petrol are derived from crude oil, and since this is a limited raw material, unevenly distributed over the world, it will become very important in the future to find alternatives to petrol; one of them are biofuels.

The present paper was written in order to find out about the biofuels market in Europe. An overview of different types of biofuels, including Biodiesel, Bioethanol, Synthetic Fuels as well as various others was compiled, describing advantages and disadvantages of each biofuel. Afterwards, Biodiesel is the main focus of the conducted SWOT analysis. This is due to the fact that Biodiesel is the major biofuel consumed within the EU, with a market share of about 80% of all biofuels available. It is found that Biodiesel does have several Strengths, both product Specific and Environmental specific, which could help the product become even more successful. On the other hand, Weaknesses, also product Specific and Environment specific are shown. Also, Opportunities and Threats are told about, with both of the topics divided into Political influences, Environmental factors and Other factors. Opportunities and Threats are influences coming from the outside, and they cannot be directly influenced by the producers of biofuels. Yet, knowing about these factors can be helpful in order to plan for future actions and gain a better understanding of the current situation of the product.

Finally, a Conclusion shortly sums up the information gained in course of the study, and afterwards an Outlook for the future of biofuels is given. An Overview of the SWOT analysis shows the researched information in a compressed way in the Appendix.

III

  B Table of Contents  

  A Abstract  II

  B Table of Contents  III

  C List of Figures  V

  D List of Abbreviations  VI

1  Introduction  1

1.1  Problem Statement  1

1.2  Focus and Limitations  1

2  Biopetrol as a special type of petroleum  2

3  Different types of biopetrol  2

3.1  Biodiesel  3

3.2  Bioethanol  4

3.3  Synthetic Fuels  6

3.4  Other kinds of Biopetrol  7

4  SWOT analysis of non-fossil fuels for cars within Europe  8

4.1  Strengths  9

4.1.1  Product specific  9

4.1.1.1  Price  9

4.1.1.2  No additional infrastructure costs  10

4.1.1.3  Valuable byproducts  10

4.1.1.4  Safety  11

4.1.1.5  Customer acceptance  11

4.1.2  Environment specific  11

4.1.2.1  Environmental Friendliness  11

4.1.2.2  Reduction in hazardous solid waste  12

4.2  Weaknesses  12

4.2.1  Product specific  12

4.2.1.1  Lower performance under cold conditions  12

4.2.1.2  Special equipment  13

4.2.2  Environment specific  13

4.2.2.1  Intensive agricultural practices  13

4.2.2.2  Nitrous oxides  13

4.3 Opportunities........................................................................................... - 13 -

IV

4.3.1  Political influences  14

4.3.1.1  Political support  14

4.3.1.2  Tax incentives  14

4.3.2  Environmental factors  15

4.3.2.1  The Kyoto Protocol  15

4.3.2.2  New agricultural markets  15

4.3.3  Other factors  15

4.3.3.1  Substitute for diesel petrol  15

4.3.3.2  Less dependency on foreign oil  16

4.3.3.3  Rising world crude oil price  16

4.3.3.4  New production techniques  17

4.3.3.5  Growing number of cars  17

4.4  Threats  18

4.4.1  Political influences  18

4.4.1.1  Taxes  18

4.4.1.2  Biofuels Directive cannot be fulfilled  18

4.4.1.3  Missing support  20

4.4.2  Environmental factors  20

4.4.2.1  Supply of raw material  20

4.4.2.2  Limited amount of cultivation land  20

4.4.2.3  Negative image of Environmental Organisations  21

4.4.3  Other factors  21

4.4.3.1  Import cheaper than production  21

4.4.3.2  Falling world crude oil price  21

5  Conclusion and Outlook  22

  E Bibliography  VII

  F Appendix: Overview of the SWOT analysis  XII

V

  C List of Figures  

  Figure 1: Advantages and Disadvantages of Biodiesel  

  Figure 2: Advantages and Disadvantages of Bioethanol  

  Figure 3: Advantages and Disadvantages of Synthetic fuels  

  Figure 4: Prices of Diesel and Biodiesel including taxes  

  Figure 5: Crude Oil Price October 2001 October 2006  

Figure 6: Meeting target quantities in 2005 ...................................................... - 19 -

VI

D List of Abbreviations

ASFE Alliance for Synthetic Fuels in Europe BtL Biomass-to-Liquids CtL Coal-to-Liquids EU European Union GtL Gas-to-Liquids Ha Hectare IEA International Energy Agency N.a. Not available nPAH Nitrated Polycyclic Aromatic Hydrocarbons PAH Polycyclic Aromatic Hydrocarbons RME Rape Methyl Ester RNZ Rhein-Neckar-Zeitung UFOP Union for the Promotion of Oil and Protein Plants

- 1 - 1Introduction

“The use of vegetable oils for engine fuels may seem insignificant today.

But such oils may become in the course of time as important as the petroleum and coal tar products of the present time" Rudolph Diesel 1

As early as back in 1912, Rudolph Diesel thought that vegetable oils will become of major importance in the future. Over the last couple of years, the use of biofuels has grown enormously all over the world. The worldwide production of biofuels ranges at 35 billion liters, ² and even though this is only a small percentage of the overall use of petroleum, many people think that there is a bright outlook for the future.

1.1 Problem Statement

The topic of this paper is a SWOT analysis of non-fossil fuels for cars within Europe. The picture on the front page shows sunflowers (the seeds of which can be used for the production of biofuels), a manufacturing plant and cars, which represents the process of biofuel production. 3

1.2 Focus and Limitations

In the following chapters will be explained, what biopetrol is and which different types of biopetrol exist. Afterwards, a SWOT analysis will be conducted in order to find out about Strengths and Weaknesses of Biodiesel, a special kind of biopetrol, as well as Opportunities in the future and possible Threats.

There are different definitions existing for the terms fuel and petrol. On the one hand, fuel can have the meaning of regular fuel and petrol as diesel, on the other hand, they can be seen as synonyms, both words used for either fuel or diesel. In this paper, the two terms are used as synonyms.

¹ Cf R.Diesel, 1912

² “An EU Strategy for Biofuels”, p.3

³ Cf http://ec.europa.eu/