INSIGHT: Tackling the biofuels backlash

16 April 2008 17:31  [Source: ICIS news]

Biofuels sowing dischordBy Mark Watts


LONDON (ICIS news)--As the UK introduced new rules for the blending of biofuels in vehicle fuel this week, charities and environmental groups queued up to throw the benefits of the global industry into question.


The mass change in land use to the cultivation of biofuels will not only cause deforestation and drive up food prices, but actually increase the output of greenhouse gas (GHG) emissions, they warned.


When the EU announced its initial push to meet biofuels quotas there was an air of optimism surrounding the idea.


Burning carbon-neutral fuel made from sustainable agriculture could both reduce carbon emissions and help achieve energy security for the continent.


But as higher blending quotas are introduced, the industry’s critics get louder and ask tougher questions: Can biofuels reduce GHG emissions? Can they be produced sustainably in large quantities? Does Europe’s economy benefit from the changing agricultural landscape?


On Tuesday the UK introduced the first stage of its renewable transport fuel obligation (RTFO), whereby all diesel and petrol sold must contain 2.5% biofuels.


Global charity organisation Oxfam wants the British government to stop the policy - which will increase to 5% by 2010 - until a thorough investigation into their impact has been carried out and enforceable standards are in place.


According to Oxfam, the policy will cost UK taxpayers £500m, and may lead to 60m people worldwide being forced off their land to make way for biofuels plantations.


Biofuels demand is estimated to be responsible for 30% of recent food price inflation, it said, citing the International Food Policy Research Institute.


The UK's Department for Transport said the RTFO requires fuel suppliers to submit reports on the biofuels they deliver -covering the carbon saving compared with the fossil fuels they replace, where the fuel comes from and whether the feedstock is grown to a recognised sustainability standard.


“Obviously sustainability needs to be at the heart of all biofuels production and it will remain at the forefront of all policy development in this area,” said environment minister Phil Woolas.


One London-based biodiesel broker felt groups such as Oxfam and Friends of the Earth were overplaying the links between biofuels consumed in the UK and deforestation in developing countries.


“The RTFO is the most sustainable biofuels policy in the world. It effectively eliminates palm methyl ester (PME) from being used in the UK so I don’t see what the issues are.”


PME is fuel sourced mainly from palm plantations in southeast Asia, which have been criticised by environmental groups for the loss of primary rainforests.


“The new quota has a strict sustainability clause which means you must guarantee the land used to grow the palm oil was already plantation,” he said.


He said it was possible the UK government could scrap the RTFO if it lost votes from the people worried about sustainability issues.


The government might also reconsider if it lost tax breaks from the European Commission and the cost of meeting quotas rose, he added.


The Royal Society – the UK’s national science academy – said it was “foolhardy to demonise all biofuels as unsustainable and environmentally damaging”. It argues that biofuels which can help tackle climate change should be promoted.


The society called for the government to amend the RTFO so that it promotes fuels with the lowest emissions by including a GHG reduction target.


Giving tax benefits to the most sustainable, climate-friendly biofuels producers would go some way to pleasing both camps, however there appears to be an equally heated debate over which fuels are carbon-saving.


Under current proposals, governments disagree as to which fuels qualify for carbon certification, according to a report by SRI Consulting.


According to Germany, bioethanol from US corn (maize) offers a carbon saving of 43%, the US rates it at 22% saving, while the UK says the product is 27% carbon negative.


Without a neutral scientific method of certifying individual products, it is impossible to create a pan-European system of promoting the most environmentally beneficial fuels.   


The European Commission is considering applying a 30% minimal cut-off point for greenhouse gas savings. This means, for example, a particular biodiesel’s cradle-to-grave carbon emissions would have to be 30% lower than conventional diesel to qualify for a tax break.


If tax-break plans in Europe are enacted, the disputed science of carbon savings could become the basis of profit or loss for the whole industry - which unlike conventional fuel, is heavily reliant on government subsidies.


Most commentators on the development of this industry would agree on the need to improve efficiency in both the cultivation and production process.


Our governments need to match the subsidies with research into developing new technologies such as highly carbon-efficient algal biomass, waste products from other industries and the use of specialised crops which can be grown on arid land.


Bookmark Simon Robinson's Big Biofuels Blog
for some independent thinking on biofuels

By: Mark Watts
+44 20 8652 3214

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