Integrated well-to-wheel assessment of biofuels combining energy and emission LCA and welfare economic Cost Benefit Analysis

The present study integrates material based Life Cycle Analysis (LCA) with welfare economic Cost Benefit Analysis (CBA) to evaluate resource and environmental consequences as well as welfare consequences for society of introducing biofuels in the Danish road transport sector. The integrated method focus on fossil energy consumption, CO2 emissions and total welfare economic changes within the whole LCA flow chain comprising both production of biomass and subsequent conversion into biofuel and combustion in vehicles. With regard to consequences for fossil energy consumption a global delimitation is used whereas only CO2 emissions and welfare economic consequences within Danish borders are included in the analysis. Consequently, calculated emission and welfare economic consequences can be interpreted as the consequences for Denmark of producing and using biofuels from biomass grown on Danish farm land. The method is applied with regard to production of rape diesel (rape methyl ester, RME), 1st generation ethanol from wheat and 2nd generation ethanol based on straw. Advantages and disadvantages of the LCA based material flow approach and the welfare economic based CBA approach are discussed. The influence of uncertainties on the results is evaluated illustrating the importance of paying attention to assumptions with regard to substitution of other products and resources and with regard to their relative prices.