ISTANBUL (Reuters) - Output of biofuel made from crops such as soybeans and rapeseed is surging in Europe and the United States, but researchers are probing how to expand beyond a limited market by cutting prices and boosting performance.


They are looking into using cheaper raw materials such as corn stalks, by-products from vegetable oil refining such as "soapstock," used restaurant grease, acid oil, and glycerine, an edible oils conference in Istanbul heard on Tuesday.

"The price differential between current biofuels and their petroleum counterparts serves as the biggest barrier to their wider implementation," said researcher Manfred Woergetter of the Austrian Federal Institute of Agricultural Engineering.

Governments mostly subsidise the difference to encourage use of biofuels.

In the United States, biodiesel currently costs around $1.30 per gallon, about twice that of ordinary diesel fuel. The most widely used biofuel, ethanol, still only makes up around 1.6 percent of total gasoline use in the United States, he said.

The price gap fluctuates due to market prices -- it was much narrower two years ago when petroleum prices had shot up but grain and oilseed levels were rock bottom with biodiesel zero to 30 cents per liter dearer, Woergetter said.

U.S. Department of Agriculture (USDA) researcher Robert Dunn told of research into cheaper raw materials for making biodiesel than soyoil, which costs around 58 cents per litre. Animal fats cost 40 cents, used frying oils 24 cents and "soapstock" only 13 cents.

A USDA team successfully transformed soapstock into biodiesel that met U.S. specifications.

In Europe, researchers are studying using corn stalks as a raw material for ethanol production, said Melvyn Askew from the UK Central Science Laboratory.

OUTPUT SURGING

In the United States, where the September 11 attacks intensified a search for alternatives to petroleum imports from Middle Eastern nations, ethanol output could jump to 10 billion litres in a few years from the 2000 level of six billion, Woergetter said.

U.S. biodiesel output is due to surge to 130-140 million litres this year from 95 million in 2001 and only two million in 1999, Dunn said.

In Germany, biodiesel production capacity is due to soar to 1.2 million tons per year from 650,000 tons this year and 300,000 tons in 2001, Woergetter said.

Dunn said scientists are also working at reducing nitrogen oxide emissions from biodiesel, which are 10-15 percent higher than conventional diesel. Release of other pollutants are less, however, with 20 percent less carbon monoxide, 30 percent less hydrocarbons and 50 percent less soot.

Other downsides of biodiesel that researchers are working on are flow problems at cold temperatures and storage stability, he added.