February 26, 2013
The European Union’s biofuels policy is an outstanding example of the working out of the so-called ‘law’ of unintended consequences. At the time of the biofuels policy’s birth, the advantages of encouraging the conversion of food crops to ‘green’ fuel seemed obvious. In the mid-1990s Europe and the developed world generally were awash with surplus grain. In addition, beet sugar processing plants were expected to become increasingly redundant in the wake of the EU’s desire to cut back sugar production. What would be more logical than to reduce dependency on fossil source oil by replacing it with ‘green’ diesel and petrol (ethanol) manufactured from renewable crop materials?
Less obvious, unfortunately, were two main contrary factors: governmental determination on both sides of the Atlantic to cut back agricultural production and rising demand for food imports by increasingly economically rich but land-poor countries in Asia, the Middle East and Africa. As demand for and the price of food rose through the early years the 21st century, the green fuel drive seemed less and less credible. There were also hidden environmental costs to which little attention was given fifteen or so years ago. Most obvious was that much of the feedstock for biodiesel, in particular, would have to come from outside Europe. In addition , land diverted from food to fuel production in Europe would mean increased food production elsewhere.
Probably most important is the additional non EU production needed to supply vegetable oils to produce biodiesel. Such indirect land use change(ILUC) has to be in regions where the extra production could lead to a reduction in vegetation more useful in environmental terms as a ‘carbon sink’ capable of absorbing GHGs . A recent report by the International Food Policy Research Institute (IFPRI) indicates that nearly half of expected carbon absorption gains from switching to biofuels disappears when land use change effects are taken into account. Probably more important, it could also reduce the food production capacity urgently needed to feed local populations.
This view is strongly argued by leading development and aid NGOs. A recent report from Oxfam maintains that if the land used to produce biofuels for the EU in 2008 had been used to produce wheat and maize instead, it could have fed 127 million people for the entire year. While such a claim is extremely difficult to support, there is little doubt that diversion of land and crops to biofuel feedstock will affect food supply and the price of food. And all to very little point.
Greenhouse gas emission reduction resulting from replacement of fossil fuels with biofuels is, in any case, pretty marginal. In truth, policies like the EU and US renewables mandates were principally a political response to high oil prices, more than any genuine attempt to tackle the emission challenge. Computer modelling for the Oxfam report suggests that ploughing up land which currently act as very effective carbon sinks, to meet EU biofuel mandates could be as bad for the environment as putting an extra 26 million cars on Europe’s roads. This does assume that the whole of the EU biofuel feedstock would be met from such areas; this is clearly not the case. Nonetheless, the reduction in carbon sequestering capacity could be substantial.
While the environmental justification for biofuels was always pretty thin, the energy security argument was even thinner. Now that the concept of ‘peak oil’ has been replaced by the view that oil production is more likely to reach a ‘plateau’ over the second half of the 21st century and natural gas is being pumped up on an increasing scale, biodiesel and bioethanol are unlikely to become any more competitive than they are now. Given the latest information on ILUC, continuation of the EU biofuels policy on environmental grounds now looks even more difficult to justify.<25/02/2013>