Substitutional fuels are fuels that can replace, either partially or completely, conventional fuels. It includes biodiesel, biogas, alcohol, myco-diesel, algal fuel, and metal fuel. They have applications to replace conventional fuels in functions such as transportation, although they still compose a small proportion of global fuel sources. Lots of substitutional fuel use is the result of government-enforced mandates, exemptions, or subsidies.[1]
Conventional fuels include fossil fuels such as coal, oil (including fuel oil, diesel fuel, and gasoline), and natural gas.[2] Fossil fuels have many negative externalities, most notably air pollution and contributing to climate change. Both the extraction and combustion of conventional fuels have negative externalities.
Substitutional fuel has been gaining popularity along with renewable energy in the United States over the past several decades. The Energy Independence and Security Act of 2007 requires that U.S. transportation fuels contain 36 billion gallons of renewable fuels.[7]
"A market failure can arise in the transport fuels market if the potential differences in emissions from petroleum based fuels and those from biofuels are not taken into account in the decisions of fuel producers and consumers...Policy intervention through an emissions tax or a subsidy for avoided emissions could be justified to address this market failure."
Demand for substitutional fuel is also dependent on the availability of alternative energy vehicles, since 29% of energy consumption in the U.S. is from transportation. In 2017, biofuels composed about 5% of transportation fuels.[8]
Biofuels are currently a leading substitutional fuel. The U.S. Energy Information Administration forecasts a stable biofuel market through 2020. Due to relatively stable domestic motor gasoline consumption in recent years, the industry is not likely to see large growth in the near future without government support.[9]
2000 | 22.58 | 23.82 | 38.23 | 84.69 | 3.01 | 6.10 | |
2001 | 21.91 | 22.77 | 38.15 | 82.86 | 2.62 | 5.16 | |
2002 | 21.90 | 23.51 | 38.19 | 83.66 | 2.70 | 5.73 | |
2003 | 22.32 | 22.83 | 38.77 | 83.97 | 2.81 | 5.94 | |
2004 | 22.47 | 22.92 | 40.21 | 85.74 | 3.01 | 6.07 | |
2005 | 22.80 | 22.57 | 40.28 | 85.69 | 3.11 | 6.23 | |
2006 | 22.45 | 22.24 | 39.80 | 84.55 | 3.26 | 6.64 | |
2007 | 22.75 | 23.66 | 39.45 | 85.88 | 3.48 | 6.52 | |
2008 | 22.39 | 23.84 | 36.84 | 83.11 | 3.85 | 7.17 | |
2009 | 19.69 | 23.42 | 34.86 | 77.94 | 3.94 | 7.61 | |
2010 | 20.83 | 24.57 | 35.42 | 80.82 | 4.51 | 8.27 | |
2011 | 19.66 | 24.95 | 34.73 | 79.35 | 4.61 | 9.20 | |
2012 | 17.38 | 26.09 | 33.94 | 77.41 | 4.51 | 8.85 | |
2013 | 18.04 | 26.81 | 34.50 | 79.33 | 4.85 | 9.45 | |
2014 | 18.00 | 27.38 | 34.76 | 80.12 | 4.99 | 9.74 | |
2015 | 15.55 | 28.19 | 35.48 | 79.20 | 4.98 | 9.72 | |
2016 | 14.23 | 28.40 | 35.82 | 78.42 | 5.02 | 10.37 | |
2017 | 13.84 | 28.03 | 36.17 | 78.02 | 5.08 | 11.18 | |
Net change | -8.74 | +4.21 | -2.05 | -6.68 | +2.08 | +5.07 |