UN biofuels report will not impact Europe markets

09 May 2007 17:39  [Source: ICIS news]

LONDON (ICIS news)--A UN report highlighting the apparent risks linked with the global growth in biofuels is unlikely to have any impact on the sector, buyers and sellers said on Wednesday.  

 

Negative publicity following the report would not affect demand or sales as mandatory blending would have to continue in spite of the UN’s warning, they said.

 

The UN-Energy report said the global surge in biofuels production could threaten food supplies and increase poverty unless new policies lead the growth in a sustainable direction.

 

However, impact from any negative publicity would be minimal since demand from the general public would make no difference to biofuels sales, brokers explained.

 

“Biofuels is not something that end-users see or touch – it is only oil companies that deal with the product,” one broker explained.

 

One area that came under attack in the subsequent media reports was palm oil-derived biodiesel, due to its impact on deforestation in parts of southeast Asia.

 

In order to remain ethically and environmentally aware, many oil companies selling biodiesel made from palm oil have started issuing a disclaimer stating that their product was grown using only sustainable agricultural techniques.

 

Several have even made the decision to stop buying and selling palm oil-derived biodiesel altogether.

 

One trader highlighted this difference between biodiesel and fuel ethanol.

 

“It is biodiesel which is under much closer public scrutiny,” it said.

 

“In Brazil, for example, ethanol is generally grown in traditional sugar cane crop zones. Biodiesel crop, which requires the felling of new areas, is much more problematic from an environmental point of view.”

 

It added that the recent bad press surrounding biofuels “would have no noticeable impact in the short term”.

 

The UN report also pointed to the development of new biofuel industries, which could provide clean energy services to millions of people who currently lack them, while generating income and creating jobs in poorer areas of the world.

 

This led some biodiesel industry sources to point to the development of new, second generation biofuels, which many in the market have pegged as the future of green energy.

 

(Charles Shaw also contributed to this article)

By: Nicolette Allen
+44 20 8652 3214

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