GREATER FLEXIBILITY NEEDED IN OPERATION OF BIOFUELS POLICIES

The European Commission’s proposals to cut back on the biofuels
section of its renewable energy policy is a wise move. In an atmosphere of
undoubtedly increasing tension over global food security such policies operated
without flexibility are inevitably going to be a political liability. To the
politically simple-minded converting food and feed grains into motor fuel when
a billion or more people are starving appears immoral. The fact that European
and world agricultural industries are well able to absorb both the demand for biofuel
use and for food is beside the point. Food availability is not the problem. Mass
starvation can only be cured by the provision of cash – to move food from surplus
to serious deficit areas.  But what matters is the apparent political unacceptability of the conversion of food crops into fuels.

In reality the policy is both economic and environmental nonsense.  In terms of GHG emissions  and distortions of agricultural product and farm input markets,  maintaining inflexible EU and US  mandates for minimum levels of biofuel use is both environmentally and economically unsound. GHG emission reduction compared with fossil fuel use is minimal and subsidising farmers to convert maize, wheat, rapeseed oil  and palm oil into petrol and diesel will inevitably compete with food demand and raise prices unnecessarily when harvests are substandard. The use of imported vegetable oils for  biodiesel also raises
unresolved questions on the indirect land use change (ILUC) issue.

Inevitably, there has been pressure from both environmental and humanitarian NGOs on both Brussels and Washington to cut back their biofuels policies. The Commission has responded with a recommendation to limiting the use of food crop origin biofuel to 5% of the renewable energy requirement by 2020. This effectively means a halving of the original target, since almost all of any biofuel contribution during the next eight years is likely to come from what are essentially food crops. The bulk of the EU’s production of biofuel is
biodiesel , produced from oilseed crops, both home grown and imported. A much
smaller proportion comes from ethanol produced from cereals and sugar.

It is probable that the Commission action was prompted by a number of analyses of the role of biofuels in the recent food price crises and also by work that has shown minimal environmental gain from their use. A recent study on the biofuels issue by the Institute for European Environment Policy (IEEP)  suggested  removal or reduction of the EU’s 10% target for renewable energy in transport; enforcement of  stricter sustainability standards, includingthe removal of subsidies for unsustainable biofuels and/or the promotion of
more sustainable biofuels and making biofuel mandates more flexible.

The IEEP report not only confirms that the current dominance of biodiesel over ethanol in the European biofuel market will continue, but also that  first-generation biofuels
produced from traditional food and feed crops would  continue to predominate , translating into a significant additional demand for these crops and contributing to increasing
prices.

It is worth bearing in mind that in the longer run the global energy market will take encouragement or otherwise of biofuel production out of the hands of governments.  As the
oil price rises so biofuel production will became profitable in its own right,without the aid of government subsidies or market protection. <19/11/2012>

 

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Commentary on European developments from the perspective of long term professional interest in European and international agriculture and food policy, nurtured over three decades spent in Brussels observing and analysing the development of the CAP. more.



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