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The development of biofuel facilities that deploy cellulosic biomass conversion will require substantial capital as well. Since investment in large new technologies is inherently risky, governments will need to play a key role in helping to reduce some of the risks involved, including assuring that the infrastructure is in place for transporting biofuels and integrating them into the transportation fuel market.

Vehicle and Engine Technologies

Biofuels need to be processed to consistent standards for optimal performance in internal-combustion engines (in general, warmer operating temperatures tend to allow for a larger margin of error). Vehicle manufacturers typically warrantee ethanol blends of 10 percent or less with gasoline in conventional spark-ignition engines. Specially designed flexible-fuel vehicles can run on a range of ethanol-gasoline blends.

Biodiesel blends of as high as 20 percent are authorized in the warrantees for most compression-ignition engines, and in a few instances warrantees allow for 100- percent biodiesel. Other biofuels, such as straight vegetable oil, methanol, di-methyl ether (DME), and biogas require more extensive engine modifications.

Fuel Distribution

Biofuels can generally be distributed via the petroleum distribution infrastructure, though in some cases special measures must be taken. Ethanol has a high affinity for water, which can cause it to separate from gasoline. For this reason, colder climates may require dedicated ethanol pipelines, which are the cheapest means of fuel distribution. And because of the relatively high solvency of ethanol and biodiesel, their introduction into tanks and facilities previously used only for petroleum-based fuels may initially cause a release of deposits left by gasoline and diesel.

Technology Transfer

With its success in commercializing sugar cane ethanol, Brazil has accumulated a reservoir of experience that will prove valuable for countries developing new biofuel programs. As other countries develop expertise in cultivating new crops and utilizing new technologies for converting these into fuels, they can expedite both the displacement of petroleum and global economic development by sharing their knowledge. This interchange of technology and ideas offers an opportunity to promote the sustainable use of biofuels. As the next generation of these fuels is developed, it will be important to develop efficient systems for harvesting, pre- processing, and delivering new types of feedstock to processing facilities.

2.6

Policy Recommendations

The increased worldwide demand for oil has kept prices high in 2006, and the situation is not expected to change anytime soon. The rapidly industrializing economies of China and India, in particular, are projected to increase their consumption of petroleum fuels dramatically in the coming decades as levels of

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