A new method of producing fuel from biomass can produce higher yields of energy content compared with other methods, thus making cheaper fuels that can compete with $100-per-barrel crude oil.

Researchers from Purdue University created the fuel, called "H2Bioil," by heating biomass rapidly to about 500 degrees Celsius in the presence of pressurized hydrogen. The end product is passed over catalysts, causing reactions that separate oxygen from carbon molecules. This makes the carbon molecules high in energy content, similar to gasoline molecules.

"The process is quite fast and converts entire biomass to liquid fuel," said Rakesh Agrawal, a professor of chemical engineering at the university. "As a result, the yields are substantially higher. Once the process is fully developed, due to the use of external hydrogen, the yield is expected to be two to three times that of the current competing technologies."

Analysis indicates that the fuel could be even cheaper than the projected $100 per barrel if a federal carbon tax were implemented.

But it also shows that the energy source used to create hydrogen for the process makes all the difference when determining whether the biofuel is cost-effective. Hydrogen processed using natural gas or coal makes the H2Bioil cost-effective when crude oil is just over $100 per barrel. But hydrogen derived from other, more expensive, energy sources – nuclear, wind or solar – drive up the break-even point.

The researchers are currently working to develop catalysts needed for the H2Bioil conversion processes. The method's initial implementation has worked on a laboratory scale and is being refined so it will become effective on a commercial scale.