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Carlos Hernandez-Galaviz

Regulatory Framework for the Production of Agave-based Bioethanol in Mexico

Carlos Hernandez-Galaviz

Regulatory Framework for the Production of Agave-based Bioethanol in Mexico

 

The Government of Mexico (GoM) published in 2008 the “Biofuel Promotion and Development Law”. Its goals are to achieve energy and food security, mitigate the environmental impact of transport fuels, and promote rural sector development. The “Programme for the Sustainable Production of Biofuel Inputs” and the “Programme for the Introduction of Biofuels” define the actions needed to accomplish the law’s objectives. The Ministries of Agriculture (SAGARPA) and Energy (SENER) oversee these programmes, respectively.

Specifically, the biofuels policy aims to introduce ethanol into the petrol mix of Mexico. This will substitute the current additive methyl tert-butyl ether (MTBE), a water pollutant. In order to cover the ethanol demand of the three largest metropolitan areas in Mexico, 802 million l yr-1 are required by 2012. Petróleos Mexicanos (PEMEX) released a tender for the purchase contract of this volume but independent ethanol producers did not consider the retail price offered attractive, as it was lower than the market price. Current bioethanol production in Mexico is null.

This work suggests that PEMEX is not willing to pay for bioethanol more than the current cost of MTBE. The GoM must recognize that there are social and environmental benefits not captured in this biofuel’s price. Therefore, the offered contract price must be raised in order to attract investors. Since petrol in Mexico is subsidised and given that 6% (v/v) will be replaced by bioethanol, the associated monetary savings can be used to fund the price adjustment of this biofuel.

Agave is proposed as a sustainable biofuel feedstock crop, considering the Mexican scenario. This plant is used commercially for the production of tequila, mezcal fiber. It belongs to the Crassulacean Acid Metabolism (CAM) family, a photosynthetic adaptation that allows it to thrive in dry conditions and marginal agricultural land, important consideration in the context of climate change.

The potential of agave-based bioethanol lies in making it a valuable by-product of tequila and mezcal production. The residual biomass of these industries could be processed to ethanol in a 2nd generation process. Additionally, the current excess supply of “piñas” (agave stem) demonstrates the existence of unused cultivated land; its utilisation will avoid land-use change. Further opportunity exists in the unexploited agave species that are not of interest to the tequila and mezcal industry. This work concludes that the use of agave for biofuels does not compete with the alcoholic beverages industry.

If the entire plant were used to produce bioethanol and considering the corn-ethanol process conversion efficiency, 12,420 ha planted with agave would be needed to comply with the programme’s volume requirement. Feedstock cost of biofuel from agave would be US$0.59. This is higher than the price of corn-ethanol in the US and sugarcane-ethanol in Brazil. The data presented demonstrates that the approach of only using the agave piña to produce biofuels is not economically viable; the results also show that a higher conversion efficiency than that of the tequila process is needed.

To promote agave as a biofuel feedstock crop, SAGARPA could provide a subsidy to farmers so that they stop producing a percentage of their output. This will increase the crop’s price, prevent farmers from abandoning the fields and assure a production capacity necessary for the future increase in demand. Other financial programmes could be aimed at guaranteeing a price floor for agave, making this crop competitive against corn and sugarcane.

This subsidy is justified, as a recent study proves that agave’s energy output/input ratio and GHG balance are superior or at least comparable to those for ethanol derived from corn, switchgrass and sugarcane. The agricultural subsidies would provide confidence to investors about the GoM’s vision and thus lead to market establishment.

A government strategy should also aim to maximize the commercial impact of Mexico’s R&D related to agave. As bioethanol production from cellulosic material of this crop (e.g. leaves, bagasse) is a current topic of research in Mexican R&D centres, platforms must be provided so that these projects are translated into commercial ventures. Finally, abandoned agricultural land should be made accessible to agave farmers through government financing.