Web exclusive posted March 10, 2009, at 4:20 p.m. CST 
 
 The <a target="_blank" href="http://www.iea.org " rel="external">International Energy Agency</a>, an energy policy organization formed to council its 28 member countries, has released a report examining the current first- and second-generation biofuel industries and the challenges at-hand for second-generation biofuel development and commercialization. The report's researchers have concluded that while many technical challenges remain for second-generation biofuels, a steady transition from first- to second-generation biofuels is expected in the near- to mid-future.
 	
 According to the report, the transition to an integrated first- and second-generation biofuels industry will most likely be spread over the next one to two decades and will require continued significant governmental support. In the near- to medium-term, the biofuels industry will grow at a steady rate and will encompass both generations of biofuels. 
 

 Based on various company announcements, the IEA determined that the first commercial-scale second-generation facilities could be up and running by 2012. However, the report stated that a conversion technology must be successfully demonstrated before it can be commercially viable, "therefore given the complexity of the technical and economic challenges involved, it could be argued that in reality, the first commercial plants are unlikely to be widely deployed before 2015 or 2020." The report further stated that it remains debatable as to what degree second-generation biofuels can contribute to global fuel demands by 2030.
 
 Current wild fluctuations in oil and gas prices have made investments in second-generation biofuels "a high risk venture" according to the report, therefore requiring furthered governmental financial assistance. Commercial-scale production costs of second-generation biofuels have been estimated by the IEA to range from $3.02 to $3.79 per gallon for ethanol and at least $3.79 per gallon for synthetic diesel. The commercialization and rapid deployment of second-generation biofuels by 2020 could reduce those costs by $1 per gallon for both ethanol and synthetic diesel, which would make both fuels cost-comparative with traditional diesel and gasoline.
 
 Before commercial development and deployment of second-generation biofuels can be complete, the IEA found several areas in need of attention including:
 <ul>	<li>Improved understanding of feedstocks, reduction in feedstock costs and development of energy crops.</li>
 	<li>Technology improvements for biochemical and thermochemical production methods in terms of pre-treatment, enzymes and efficiency improvement and cost reduction.</li>
 	<li>Maximizing the value of coproducts such as heat, electricity and various chemicals as a way to increase overall revenue. Also, to ensure fair assessment of second-generation biofuels, market assessments should include items such as rural development, employment, energy security and carbon sequestration.</li></ul>
 The entire 124-page IEA report can be viewed at <a target="_blank" href="http://www.iea.org/Textbase/publications/free_new_Desc.asp?PUBS_ID=2079" rel="external">www.iea.org/Textbase/publications/free_new_Desc.asp?PUBS_ID=2079</a>.

IEA report examines second-generation biofuels

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