Could biofuels do more harm than good? OECD asks

By Jess Halliday

- Last updated on GMT

Related tags Biofuels Food prices Biofuel

European ministers will today discuss whether propounding use of
biofuels is justified given their impact on food prices, and
whether first generation technologies are causing more
environmental harm than good.

The development of biofuels has been cited as a major factor in rising farm commodity prices, which is having a knock-on effect on food prices the world over. Landowners see more gains to be had from fuel crop production than from feed crops, leading them to switch production and causing a shortage not only in crops for human consumption, but also for use in animal feed. What is more, in February EU energy ministers set a target for 10 per cent of fuel used for transport in the bloc to be derived from biofuels by the year 2020. On a global scale, subsidies channelled towards biofuel development are estimated to run at billions of US dollars. A paper on the topic, prepared by the Organisation for Economic Co-Operation and Development (OECD), is scheduled for debate at a round table on sustainable development, taking place at the organisation's headquarters in Paris today. It says: "To harness the real potential of bio-energy and biofuels an important shift in current expectations and policies is necessary." ​ A spokesperson for the OECD stressed to that the issues raised are questions for discussion and not recommendations. But the report does make some rather strong arguments that would support a more circumspect approach to biofuel development, rather than hurtling pell mell towards a new technological era without examination of the full consequences. There are two overriding perceptions of biofuels. On the one hand, advocates say that as an energy source they can increase supply security, reduce emissions and give farmers a new income stream. Critics, on the other hand, claim biofuels will increase energy-price volatility, food prices and greenhouse gas emissions. The paper aims to "shed light on these controversial issues and asks whether biofuels offer a cure that is worse than the disease they seek to heal."​ It tables claims that the rush to develop energy crops threatens to cause food shortages and damage biodiversity - while the benefits will be limited. "In theory there might be enough land available around the globe to feed an ever-increasing world population and produce sufficient biomass feedstock simultaneously, but it is more likely that land-use constraints will limit the amount of new land that can be brought into production, leading to a "food-versus-fuel" debate." ​ In another report, Agricultural Outlook 2007-2016​ prepared by the OECD and the Food and Agriculture Organization and published in July, it was propounded that growth in biofuels is likely to mean food prices will remain high and keep rising for at least a decade. OECD is also throwing an economic element into the mix. Stiff import tariffs - as much as 25 per cent - are stymieing trade in biofuels, it says, particularly when it comes to sugar cane and vegetable oils from tropical climates that are cheaper than crops from temperate climates. The OECD questions whether subsidising governments could end up supporting a fuel that is "more expensive and has a higher negative environmental impact than its corresponding petroleum product".​ It says the environmental impact of ethanol and biofuel could "very easily"​ exceed those of petrol and mineral diesel. Indeed there has been some attention to potential harm from first generation biofuels, but since there is an expectation that they will lead to the more advanced, second generation technologies that will use marginal land and waste materials, such fears have not yet resulted in policy change. However since second generation technologies are still on the drawing board, it remains to be seen whether they will actually become commercially viable, or remain niche players.

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