Cooperative Insurance warns of biofuels backlash

14 May 2007 15:26  [Source: ICIS news]

LONDON (ICIS news)--Companies are jeopardising future profits by rushing to invest in the biofuels boom without considering the long-term issues, warned a report by UK-based group Cooperative Insurance on Monday.  

 

In the report - Biofuels: Risks and Opportunities of an Emerging Industry - which echoed last week’s United Nations study, Cooperative called on the companies it invests in to tackle feedstock issues and build sustainability into biofuels supply chains.

 

“The current growth of the industry must be pushed in a more sustainable direction and complemented by fuel efficiency measures and reducing our use of fossil fuels,” said Cooperative Insurance analyst and the report’s author Sam Lacey.

 

If not managed correctly, meeting increased biofuels demand could lead to deforestation, push up global food prices and have disastrous effects on biodiversity, the report added.

 

UK-based biodiesel producer D1 Oils, which is developing fuel from jatropha crops in India and southern Africa, said its feedstock was “environmentally elastic”.

 

“We never believed that edible oils would be the mainstay of biofuels production. We use inedible vegetable oils which grow on marginal and waste land,” said spokesman Graham Prince.

 

However, the report said D1 Oils’ integrated supply chain was not the norm, adding most refiners had less control over their feedstocks.

 

It highlighted Greenergy, the major biodiesel blend supplier for the UK’s largest supermarket chain Tesco.

 

“Greenergy uses primarily UK grown rapeseed for its biodiesel but we have found no evidence of sustainability standards covering any of its other raw materials,” said the Cooperative Insurance report.

 

Greenergy was not available for comment.

 

By: Mark Watts
+44 20 8652 3214

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