Producing biofuels from inedible feedstock and on marginal lands. It is often argued that using inedible energy crops for the production of biofuels would reduce pressures on food prices. Moreover, many of these crops, e.g.,Jatropha, poplar and switchgrass, could be grown productively on marginal land, without irrigation and potentially even contributing to environmental goals such as soil restoration and preserva­tion (GEF, 2006; IEA, 2004; Worldwatch Institute, 2006).

Inedible feedstocks. Food price increases can be caused di­rectly, through the increase in demand for the biofuel feed­stock, or indirectly, through the increase in demand for the factors of production (e.g., land and water). For example, land prices have risen considerably in the US "corn belt" over the past years—an effect that is largely attributed to the increased demand for ethanol feedstocks (Cornhusker Economics, 2007; Winsor, 2007). Such factor price increas­es lead to increasing production costs of all goods for which they are used as inputs. Thus, using nonedible plants as en­ergy feedstocks but growing them on agricultural lands may only have a limited mitigating effect on food prices.

Marginal lands. Cultivating energy crops on degraded land or other land not currently under agricultural production is often mentioned as an option but it is not yet well un­derstood.   Several   key   issues   deserve   further   attention: (1) The production of energy crops on remote or less pro­ductive land would increase biofuels production costs (due to lower yields, inefficient infrastructure, etc.), leading to low economic incentives to produce on these lands. In fact, while estimates of available marginal land are large, espe­cially in Africa and Latin America (FAO, 2000; Worldwatch Institute, 2006), much of this land is remotely located or not currently suitable for crop production and may require large investments in irrigation and other infrastructure. (2) Environmental effects of bringing new stretches of land into production are problematic and need to be carefully analyzed, especially with regards to soil erosion, water re­sources and biodiversity.

Development of next generation biofuels. Significant poten­tial is believed to lie with the development of new energy

conversion  technologies—next  generation   biofuels.   Sev­eral different technologies are being pursued, which allow the conversion into usable energy not only of the glucose and oils retrievable today but also of cellulose, hemicel-lulose and even lignin, the main building blocks of most biomass. Thereby, cheaper and more abundant feedstocks such as residues, stems and leaves of crops, straw, urban wastes, weeds and fast growing trees could be converted into biofuels (IEA, 2006; Ortiz et al., 2006; Worldwatch Institute, 2006; DOE, 2007). This could significantly re­duce land requirements, mitigating social and environmen­tal pressures from large-scale production of 1st generation biofuels (Table 6-5). Moreover, lifecycle GHG emissions could be further reduced, with estimates for potential re­ductions ranging from 51 to 92% compared to petroleum fuels   (IEA,   2004;   European   Commission,   2005;   GEF, 2005; Farrell et al., 2006). However there are also envi­ronmental concerns associated with potential overharvest-ing of agricultural residues (e.g., reducing their important services for soils) and the use of bioengineered crops and enzymes.
         The most promising next generation technologies are cellulosic ethanol and biomass-to-liquids (BTL) fuels. Cel-lulosic ethanol is produced through complex biochemi­cal processes by which the biomass is broken up to allow conversion into ethanol of the cellulose and hemicellulose. One of the most expensive production steps is the pretreat-ment of the biomass that allows breaking up the cellulose and removing the lignin to make it accessible for fermen­tation. Research is currently focused on how to facilitate this process, e.g., through genetically engineering enzymes and crops. BTL technologies are thermo-chemical processes, consisting of heating biomass, even lignin-rich residues left over from cellulosic ethanol production, under controlled conditions to produce syngas. This synthetic gas (mainly of carbon monoxide and hydrogen), is then liquefied e.g., by using the Fischer-Tropsch (FT) process to produce dif­ferent fuels, including very high-quality synthetic diesel, ethanol, methanol, buthanol, hydrogen and other chemicals and materials. Research is also focusing on integrating the production of next generation biofuels with the production of chemicals, materials and electricity in biorefineries (Aden et al., 2002; IEA, 2004; GEF, 2006; Hamelinck and Faaij, 2006; IEA, 2006; Ledford, 2006; Ragauskas et al., 2006; Woods, 2006).
         Next generation biofuels have to overcome several criti­cal steps in order to become a viable and economic source