An Overview and Strategic Framework for Biofuel Development

High fossil fuel prices, energy security concerns, and environmental issues—particularly climate change—have motivated countries across the world to explore alternative sources of energy, including biofuels. The countries of the Greater Mekong Subregion, namely Cambodia, the People’s Republic of China, the Lao People’s Democratic Republic, Myanmar, Thailand, and Viet Nam, are poised to embark on, or have already begun, biofuel development. But this initial enthusiasm has been dented by the food crisis of 2008, which singled out the diversion of food crops to biofuel production as one of the factors responsible for driving up food prices. This allegation is partly correct and serves to highlight a potential pitfall of introducing biofuel policies without duly assessing their overall implications on the agricultural sector.

It is also the prime motivation for a study undertaken in the subregion that aimed to (i) preliminarily assess the economic and market potential of biofuels to assist in the identification of promising areas for investment to promote rural development; (ii) assess the adequacy of current technology for biofuel systems development and identify needs for research and development, training, and human capacity-building; and (iii) review current policies on promoting biofuel development and identify the policy levers that can promote sustained growth in the subsector, especially in relation to strengthening public–private partnerships, encouraging investment, and promoting cross-border trade. Five critical areas were analyzed: (i) the market outlook for biofuel development, (ii) characterization of the resource base, (iii) prioritization of potential feedstocks, (iv) agribusiness development schemes, and (v) existing policies and regulations in support of biofuels development.

The final output of the study is a framework of strategies and options to develop alternative renewable sources of energy with a focus on biofuels that would promote both energy security and diversification in agricultural production. This in turn would help raise incomes, primarily of small farmers, and hence strengthen food security and reduce poverty.

This report presents a synthesis of the results of the individual country assessment studies and sets out the subregional strategy for biofuel development in the Greater Mekong Subregion. It is part of the Greater Mekong Subregion: Status and Potential for the Development of Biofuels and Rural Renewable Energy series.