The reasoning in the study is pretty simple, at least as reported by the BBC. First, it's argued that supplying the fuel needs of cars would require biofuel crops to cover an area probably too large to be practical. The second reason is that planes, unlike cars, can't run on other alternatives like batteries or compressed natural gas. The high energy needs of a plane demands liquid fuel.
In the European Union, rules mandating 10 percent biofuels for all transport have already been reversed, and there has been plenty of acknowledgement elsewhere that biofuels probably won't be the perfect solution for cars -- except, of course, from the biofuel industry, which lobbies actively to sell more auto fuel. So this study can join many others sharing a common theme -- that biofuels are just one small piece of the transportation puzzle.
But the Policy Exchange also seems to be overlooking one big problem, which is that planes tend to run on specialized fuels with high energy content. At least in the United States, the most common biofuel produced is ethanol, which has a much lower energy content than gasoline, and wouldn't be suitable for any commercial plane.
The fuels that would work in aircraft are mostly up-and-coming. Fuels made from algae and jatropha, a berry-growing plant that is still being domesticated, have both been successfully tested on flights. But neither one of those sources currently accounts for a noticeable portion of the market.
So for the future, it probably makes sense to pay attention to the Policy Exchange, and start thinking about how new biofuel production can be directed to applications that require a liquid fuel. But what about existing biofuel capacity -- the many ethanol plants in the United States and elsewhere, that aren't going away any time soon?
One possibility, in the event that ground transportation starts switching off gasoline and its surrogates, is moving today's ethanol plants over to chemical production, a change that some startups as well as bigger companies like Dow Chemical are already looking at. As much as the biofuel industry seems tied to the idea of powering the cars of the future, there may be a number of better alternatives.