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close this book Alcohol fuels: Options for Developing Countries
View the document Acknowledgments
View the document Preface
View the document Overview
View the document 1 Production and Use
View the document 2 Biomass Sources
View the document 3 Ethanol Production
View the document 4 Methanol Production
View the document 5 Social, Economic, and Environmental Implications
View the document 6 Conclusions and Recommendations
View the document Advisory Committee on Technology Innovation
View the document Board on Science and Technology for International Development

5 Social, Economic, and Environmental Implications

The technical options associated with an alcohol fuel program must be coupled with organizational strategies that will ensure maximum social benefits. Substituting fuel crops for food crops in a marginally self-sufficient country, for example, could result merely in importing food instead of fuel. A small-scale production facility in a rural area will have a significantly different impact than a single large unit in an urban location, in terms of employment generation, transportation, environmental consequences, and overall economic effects. An awareness of the options, and a careful assessment of the impact of each, can provide a powerful planning and screening tool.


Alcohols have been made and used by man for thousands of years. Their use as fuels, while never large scale, was almost totally replaced by fractions of crude oil when these derivatives were cheaper than almost any other form of energy, including the lower alcohols. The interest in alcohol fuels for developing countries is almost entirely a result of the reversal of this situation, and alcohol fuels are therefore seen almost exclusively as a substitute for imported crude oil. However, the variety of energy uses for petroleum products cannot be replaced simply by alcohol fuels. This has implications for the choice of alcohol-producing technologies and ultimately for the social, economic, and environmental consequences. The advantages and limitations of alcohol fuels as opposed to alternatives (such as producer gas and vegetable oils) must be weighed, and the choices must be defined before the impacts can be assessed.


Alcohol fuels are attractive alternatives to some petroleum derivatives. Their use entails a minimum of adjustment to many engines now designed to run on petroleum fuels, and the whole fuel distributive network could readily be adapted to alcohol fuels. Indeed, in Brazil the replacement of gasoline in new automobiles designed to burn 95 percent ethanol was accomplished simply by distributing it through retail pumps previously used to dispense high-octane gasoline.

However, only 40-45 percent of crude oil, the "light distillate" fraction, yields gasoline in refining. The other 55-60 percent, the "middle and heavy distillate" fractions, yield mainly diesel oil and fuel oil, respectively, along with a variety of petrochemicals. Although the composition of crude oil from different sources may vary and yield different proportions of these three fractions on processing, the effect of this variability on the proportions is limited. It is also possible to alter the relative proportions of the fractions yielded in the refining process (to increase the proportion of diesel at the expense of fuel oil, for example), but without extensive and expensive further chemical treatment the effect is relatively minor. It is a convenient oversimplification to consider the proportions of the three fuel fractions yielded as a constant ratio of approximately 45:30:10.

As a result, substitution of imported crude oil requires alternative sources for all three fractions (since it is normally much cheaper to import crude oil and refine it locally than to import specific fractions). Figure 26 shows potential sources of substitutes for the three crude oil fractions used as fuels.

Light Distillate

Light distillate substitutes have been produced from renewable sources in several ways, mainly, as we have seen, from alcohol fuels.

An alternative substitute is found in the wood-gas-powered engines redeveloped in Europe and Asia during World War II. A firebox with smoldering wood or charcoal is interposed between incoming air and the unmodified auto-engine manifold so that a mixture of combustible gases is produced. These gases include a high proportion of carbon monoxide, which is sufficiently flammable to power the engine at only slightly less output than gasoline.

Figure 26. Oil substitution options.

Both these petroleum substitutes require large amounts of biomass. If 1 hectare of sugarcane is assumed to produce 3,600 lifers of alcohol, this can provide the average driver with 10 liters daily (enough for 23,000 km per year at 6.4 km per lifer); figures for current experimental producer gas powered automobiles in the Philippines are typically 8 km per kg of charcoal. An average 20,000 km driven annually would require 2.5 tons of charcoal, which would require upwards of 0.25 ha per year of trees, depending on species and location.

Middle Distillate

The middle distillate fraction can be replaced by alcohol fuels, but because of the compression-ignition character of diesel engines, this is not as simple as with spark-ignition engines. The simplest technique is to enhance the ignition of the alcohol fuel by adding about 20 percent of amyl nitrate, but this is a costly addition.

Another method of replacing part of the diesel fuel with alcohol is to aspirate alcohol into the air intake of the engine. Various devices that will do this are available commercially. Savings of diesel fuel of up to 35 percent are claimed, and the alcohol need not be pure, as it must be with gasohol; a 50:50 ethanol-water mixture (such as is obtained in the first distillation of yeast-fermented mash) is reported to work satisfactorily. Aspiration is reported to work particularly well in turbocharged diesel engines.

The most promising option for replacing diesel fuel with alcohol is by major engine modification, such as providing spark-assisted ignition and providing additional lubrication, which the diesel oil normally supplies. Some engine manufacturers are working on this.

An entirely different substitute that avoids these particular problems is light vegetable oil, such as soybean, sunflower, coconut, or peanut oil. Provided these oils are used in relatively warm conditions where their viscosity is low, they may replace large proportions of diesel fuel. Typically, an engine is fitted with a device that permits it to be started on the diesel fuel and then switched over to vegetable oil or to a diesel-vegetable oil mixture. The efficiency of combustion and fuel consumption is comparable to pure diesel. This must be carefully monitored, however, because residues can build up and cause the engine to seize.

In many countries engineers are experimenting with methods to overcome high viscosity of vegetable oils and their tendency to leave coke deposits on the injector nozzles and in the cylinders. One promising approach involves transesterification of the vegetable oil with methanol; the reaction mixture can have a viscosity closer to diesel oil. Noting that coconut oil or its simple derivatives have been used alone or in blends with diesel oil in engines ranging from 6 to 350 horsepower, Solly suggests that coconut oil is a practical and economic fuel in many areas of the Pacific at present. He states that a plant to produce 32 lifers of coconut oil per hour from 50 kg of copra costs about $20,000.

In the Philippines the United Guardian company is planning a $12million plant to produce 10 million gallons per year of coconut methyl esters for partial use as diesel oil substitutes. The Luzon project is scheduled to begin operation in early 1984.

As with light distillate, huge areas of crops would be required to provide the vegetable oils for any appreciable quantity of diesel fuel substitute. The highest average yield of oilseed in large quantity is palm oil, with typical maximum yields under plantation conditions of around 4 tons per hectare. This is about 2,200 lifers per hectare, which is somewhat less than the amount of fuel produced by a hectare of sugarcane. On the other hand, its extraction is less complicated and energy-consuming, because the oil has only to be pressed or solvent-extracted from the seed.

In an analysis of the potential for biomass fuels in vehicle engines, Jones and Chatterjee compared the investments required to replace 1,000 barrels per day of petroleum fuels with ethanol, methanol, or vehicle-mounted gasifiers. The total investment required for the gasifiers was only 10-20 percent of that required for the production of the alcohols.

Heavy Distillate

Heavy distillate is the fuel oil fraction of crude oil that is commonly burned to generate electricity and to power large ships. In developing countries, its main use is in electrical generation and industry. It can be replaced by a wide variety of solid fuels, including wood and charcoal; pyrolytic char; rice hulls (several generating plants in Thailand are fueled this way); coconut hulls; dried bagasse; and compressed and dried municipal garbage.


One concern in replacing crude oil fractions by fuels produced from renewable sources is that unless such efforts are carefully administered, the rich may divert resources from the poor. In Brazil, for example, as the demand for alcohol increased, land in Sao Paulo State had to be zoned to prevent food-producing land from being converted to grow sugarcane. Otherwise the cost of food would have increased because of increased transportation costs. The Brazilian federal government also limits land to be used for sugarcane production and plans to evaluate the potential for wood-to-alcohol production.

When the price of gasoline increases, the incentive to replace considerable quantities with alcohol will increase; however, grain alcohol prices will then also rise as farmers' costs rise. In effect, the competition of petroleum prices may cause grain prices to rise as more and more is used to make alcohol at increasing prices. Less grain will be available for export, and the price of the exports will be higher for the importing country. The price of food for grain-short countries will thus be higher.

It is argued that in the United States alcohol could be produced from cornstarch in corn that is now being fed to animals (mainly to fatten cattle) with the dried stillage residues fed to the animals after the alcohol has been produced from the starch. The other nutrients would remain, the material would be more fibrous, and the animals would produce leaner meat, which is healthier for the consumer. However, cattle gain weight, and thereby value, more quickly and profitably on whole corn than on stillage residues. Further, the stillage residues are contained in a volume of liquid 10-15 times the amount of alcohol produced, and the costs of handling, drying, and transporting this product are considerable. In Brazil the stillage residues (vinaça) from sugarcane fermentation are returned directly to the canefields to conserve nutrients and avoid the environmental effects of other types of disposal.

The potential saving of nutrients by feeding stillage residues to farm animals is not as relevant in developing countries as it is in the United States and Europe. There are few facilities in developing countries for intensive feeding of animals; in many countries, animals are scavengers, obtaining their food wherever it can be found. Scavenging animals do not produce nearly as much meat, milk, or eggs as their well-fed counterparts. Nevertheless, they do not compete for human food. Although poultry and dairy projects have been set up in many places, poultry and milking cows are least able to obtain the required level of nutrition from alcohol crop stillage residues, only small amounts of which can be used in their rations.

The Brazilian decision to develop eucalyptus as a future source of ethanol can have far-reaching effects; growing fuelwood plantations on poor soils will reduce the competition for food-producing land, help to reduce erosion, and support decentralized energy production, encouraging creation of industry in rural areas and stemming the growth of industrial areas.


Although there are many ingenious ways in which increased demand for alcohols can be met from nonfood sources in temperate regions, most of these are still experimental or uneconomic compared with the proven, large-scale technology of grain alcohol production. However, large-scale ethanol production is likely to lead to a shortage of grain stocks at reasonable prices on the world market.

This situation may require regulation to limit the amount of grain that can be converted to alcohol and to encourage, by tax incentives or other means, alcohol production from nonfood sources. Regulation might also stimulate research into more efficient, cost-effective ways to make alcohol from nonfood sources, such as cellulose.

In the developing countries, the situation is more complex, since the elements essential for a successful alcohol fuel program-capital, land to produce biomass, management for the technology-are likely to be in relatively short supply. Use of personal automobiles, however, is proportionally much lower than in industrialized countries so that an alcohol production program can meet the fuel demand, and most developing countries have a climate suitable for year-round growth of biomass. There is a need to inventory and analyze possible sources of fuel alcohols in specific countries to determine the potential conflicts with food supplies and the economics of producing alcohol fuels. Policies can then be based on this kind of comprehensive analysis.


Potential conflicts also are possible in the use of vegetable oils for diesel fuel. Global production of all vegetable oils is estimated at about 40 million tons per year or roughly 10 kg per head for the world population. Much of the oil produced remains at the farm and village level for cooking, where it is an important source of vitamins and unsaturated fatty acids in the diet; the remainder enters the market mainly for industrial and pharmaceutical uses for hardening into margarine and soaps and for cooking oil.

World production is viewed as insufficient for current needs, though maldistribution creates periodic surpluses in some locations; prices are wildly unstable compared with other commodities. The most common oil, soybean oil, is currently in good supply, and with a market price of $400 per ton, or about 40 cents per lifer. Production costs are linked to energy costs, so the price tends to rise with increasing energy costs. Yields per hectare are low compared with sugarcane or eucalyptus sources for alcohol fuels. The highest yielding oilseed is palm oil at around 4 tons per ha and coconut oil is second with a potential of up to 2 tons per ha. Other oilseeds are much lower yielding (Table 11), though they are annual crops, whereas the palms are perennial tree crops that require about 5 years to begin to bear fruit. The area required to support vegetable fuel oil production will thus tend to be greater than for the equivalent production of fuel alcohol.

It is therefore unlikely in the near future that a large portion of diesel consumption in developing countries will be replaced with vegetable oil. It is more likely that in unusual circumstances in industrialized countries-such as a temporary glut of vegetable oil-a certain amount of oil could be diverted to fuel use, particularly where lowered crude oil refinement might have led to a relatively high demand for diesel fuel compared with alcohol-substituted light distillate.

TABLE 11 Edible Vegetable Oil Production Worldwide




Price Range


(in millions of tons)


(dollars per ton)

Palm oil




























a USDA forecast for 1982/83.

b Yields vary widely depending on crop variety, soil, and season; these figures have been gathered from the literature as indications of the range of yield reported, rather than definitive values.

SOURCE: Foreign Agriculture Circular, Oilseeds and Products FOP 1-83, Foreign Agricultural Service, United States Department of Agriculture, January 1983.


Heavy distillate-fuel oil substitution is likely to have less direct impact on food production, since biomass sources, wood, and charcoal can be grown on marginal land unsuitable for most food crops.

A number of arguments have been advanced to counter the position that increasing fuel alcohol consumption in developing countries will inevitably lead to reduced food availability, rising food prices, and the rich fueling vehicles at the expense of the food supply of the poor.

In many developing countries, particularly in Africa, food crop yields are very low. Among the contributory factors are lack of market incentives, poor management, lack of delivery systems for high-yielding varieties and the fertilizers and pesticides that comprise the packages of "green revolution" technology, and weak research and extension infrastructures. Yields could be doubled or even tripled, with adequate incentives - without additional costly fertilizer and pesticides-in properly managed rotation systems. With added technical inputs, yields comparable to those obtained anywhere can be achieved, though it is true that lowland tropical soils are difficult to manage under sustained high-yielding annual food crop production other than paddy rice. Nevertheless, the potential for considerable expansion of crop production exists without costly inputs and without expanding acreage. These arguments include the point that fuel alcohol production, suitably organized, could provide a critical stimulus for agriculture. Fuel alcohol production could provide incentives for increasing production and farmers' incomes, as well as for upgrading the infrastructure and availability of services to farmers. It could also supply fuel to support farm mechanization and the use of equipment for which petroleum fuels are unavailable or too costly. In this way, both food and fuel requirements could be met. Plantation crops such as oil palm could meet diesel fuel needs and increase farmers' incomes, while also serving to stabilize the humid tropical soils. Developing countries could thereby enhance their productivity and take advantage of their more favorable photosynthesis location.


In considering the production of biomass for conversion to alcohol fuel, potential impacts should be assessed on two levels: at the plantation level, in which the biomass for alcohol production utilizes most or all of the land area; or on a smaller scale in which crop production for alcohol is subsidiary to the production of other crops or to other kinds of agricultural enterprise. In each system there are economic and social considerations and direct environmental effects.

Plantation Production

Land Ownership

Among the first considerations that affect the production of biomass for alcohol fuels in the commercial plantation sphere are the availability and ownership of large tracts of land. The consequences of bringing land into use or converting it from other uses to biomass production will obviously have to be weighed in terms of capital required and of alternative capital uses. The question of whether to encourage the private sector to develop land for this purpose or to do it through government investment depends on the political philosophy of those making the decision and the social structure of the area in question. In this context, the traditional size of farms and the organization of land use and labor will be important factors.


Possibly the most important consideration in a decision to produce alcohol fuels on a large scale is the potential competition of alcohol substrates for arable land on which food would otherwise be produced, along with the labor and other inputs, such as fertilizer and pesticides, that would be diverted to this purpose from food production. Governments will be faced with the need to control land use where market forces, in response to the profitability of alcohol, might displace food production in favor of large mechanized plantations.

Economies of Scale

In certain cases there may be difficult trade-off decisions, for example, where fuel is needed to support agricultural development or where questions of scale arise-whether it would be more in the national interest to forego the large plantation in favor of dispersed, smallscale production for local use, even at the higher cost of less-efficient technology. A decision in favor of less economic, small-scale production may, however, imply a permanent subsidy, as Eckhaus has argued. More cost-effective technology will tend to edge out the less efficient.

Capital Demand

Like large-scale biomass production, large fermentation and distillation alcohol plants are more energy-efficient than small plants and more cost-effective in terms of lifers of alcohol produced per unit of investment. However, this does not necessarily imply that large-scale plants are more desirable. The level of capital investment required, not only for the plant itself, but for crop land, housing, and other services for employees, may be in competition with other major national undertakings (a hydroelectric plant and dam, for example; or a major road to provide access to markets). High interest rates may make large loans uneconomic.

In this context, however, there may be other possibilities that would support the large plantation choice. In many tropical countries in the last decade, the high price of sugar on the world market encouraged the construction of sugar mills that, as the price of sugar fell, became unprofitable and were closed down. These could be valuable assets to alcohol production, in terms of both money and time that would otherwise be needed for construction. Smaller sugar mills no longer economic for sugar production may be economic for alcohol production. A 100,000 lifer-per-day distillery requires only 60 tons of cane per hour, operating on a 24-hour basis.


The potential competition of large-scale alcohol production for foodproducing land, along with the employment or displacement of food-producing farmers, has been noted. There is, however, a wider employment consideration: the extent to which a large-scale alcohol plant will attract industries to the area by the presence of the plant and its fuel, and the opportunities for utilizing its by-products, as well as the extent to which it will create employment by supplying goods and services to the entire community. The location of the plant and the scale and range of its production (for example, simple alcohol plus animal feed by-products or a complex alcohol-based synthetic chemical industry) will have a profound effect on employment levels and on the kinds of jobs created. Choices about fuel alcohol production will also affect the composition and distribution of society, stemming or encouraging urban drift and concentrating or dispersing economic activity.

Environmental Consequences

Plantation crop production may affect the environment through the use of chemical fertilizer, including the effects of energy used to produce the fertilizer itself and other consequences of its production, such as thermal or chemical pollution. Secondary considerations are more subtle and long range. They include loss of topsoil-which regenerates very slowly - owing to production of crops. They also include the loss of wilderness, of uncultivated land that serves as both an aesthetic and genetic resource, where wild plants, animals, birds, and microorganisms can maintain the original (or less-modified) ecology of the area. This is important for natural regeneration of species and for providing a reservoir of genes that may subsequently be needed for disease control or other biological purposes.

At present, unused land is lying fallow and regaining some natural fertility; the grass or legume cover is slowing erosion, when compared with the net loss of topsoil on cropped land (which amounts to many tons per hectare per year, depending on the crop). Ingraham estimates that soil loss due to erosion in developing countries is nearly twice as great as his estimate of 27 tons per ha per year in the United States. Pimentel et al. calculated that it may take 100 years to replace one year's loss of topsoil from land on which cereal grains are raised in the United States, and it is evident that soil losses in the tropics will require much longer to replace because the more even climate breaks down rock into soil more slowly than in temperate zones where freezing is an important factor.

Small-Scale Production

Economic and Social Impact

Small-scale production involves less capital and land investment; however, more investment is required in the system for collecting feedstock to be processed at a central point (such as crop residues from a group of farmers to be used by a village or town distillery). Smallscale production may also increase the price of food or feed by diverting traditional foodstuffs for use in alcohol production. In part, the animal feed may be replaced by stillage residues; human food may be replaced through the use of cash obtained from the sale of alcohol. One result may be the increasing monetarization of the rural economy. The net effect may be greater in a subsistence rural area because of the disproportionately large infusion of cash even where relatively small amounts of alcohol are produced, as compared with cash brought into a pert-urban area by a large-scale production plant.

Environmental Impact

Small-scale production may have the effect of bringing marginal land into production. Logistically, recycling of waste may be simpler. It may also lead to fermentable uses of wastes and residues that otherwise are normally local environmental nuisances.


Economic and Social Impact

The fermentation and distillation plant will create new employment profiles in the society, diverting skilled manpower to new areas, and depriving other areas of this resource. In both urban or rural situations it will generate new jobs or sources of income. The plant will also require a source of capital proportional to its scale. This capital, whether raised locally or abroad, will create secondary economic effects. Further, the licensing and regulation of dispersed production will necessitate its own bureaucracy, with the associated costs.

Environmental Effects

There are likely to be negligible direct emission pollution effects unless coal or oil is used to heat the still. Stillage residues will constitute the major pollutant, and their further use is an important consideration. They can contribute to thermal and water pollution; eutrophication of ponds and streams from the organic matter in the liquid effluent is a constant hazard. The solid residues can be used for animal feed but can create environmental problems if not properly handled. Hira et al. have examined the air, water, solid waste, and occupational safes, and health problems that might arise at biomass-based ethanol and methanol production facilities.


Large-Scale Utilization

Large-scale production and use of alcohol fuels in the short term will be for transportation rather than for industrial conversion. This use will place alcohol fuels in direct competition with petroleum fuels, and the impacts are likely to be beneficial. They will include additional employment and diminished need for imported oil in nonproducing countries. In those countries that produce oil, widespread use of alcohol fuel will free petroleum products for export or for processing as industrial feedstocks.

Direct environmental factors are also likely to be favorable. The emission characteristics from internal combustion engines are given by Pullman.

The main environmental impact of large-scale utilization of alcohol fuels is likely to be an increase in aldehydes in the atmosphere, but this should be more than offset by a reduction in other emitted pollutants.

With respect to direct pollution by the fuels themselves, spilled alcohol is likely to be much less hazardous than oil or gasoline spills in all but the most extreme cases; alcohol spills at sea could affect on marine life more severely than petroleum because alcohol is miscible with water.

Small-Scale Utilization

Small-scale uses include powering farm equipment and fishing boats, heating and cooking, and small-scale power generation.

The economic and social impacts are likely to be varied and farreaching. In areas where these technologies are used, they may lead to monetary economics as opposed to barter, which, in turn, will have an effect in changing the role of women by reducing the need to gather fuel. It may also change the roles of the family members and villagers who process food and feed and who thresh and mill grain or perform other tasks. To the extent that small-scale use of alcohol involves income generation and income use, it has the potential for changing many of the traditional home and village leisure and cultural activities. Availability of alcohol fuels opens up possibilities for cooperative uses of electricity to power radios or television. This can increase political involvement through greater awareness of local, national, and world events. On the negative side, there will also be increased possibilities for abuse of alcohol-intoxication, poisoning, and increased fire hazards.

Many factors will contribute to the local and national impact of alcohol fuel technology. The way in which the technology is used should be planned with considerable awareness of the consequences.


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