UK warns of biofuels effect on world food prices

07 July 2008 15:26  [Source: ICIS news]

LONDON (ICIS news)--World leaders must ensure that the rapid increase in global biodiesel production does not contribute to a surge in food prices, the British government said on Monday.

 

The EU and other biofuels targets for 2020 imply much greater output and diversion of foodstuffs into fuel than today, the government said, as it called for policy makers to be sensitive to differences in the various biofuels.

 

“The risks that biofuel policies could exacerbate global food price increases over the coming decade need to be much better understood so that any concerns can be addressed in advance,” said the government report, entitled Food Matters: Towards a Strategy for the 21st Century

 

The EU is targeting biofuels to make up 10% of Europe’s motor fuels by the year 2020.

 

The report said first generaton biofuels subsidies were a far less cost-effective way of mitigating carbon emissions than other strategies such as the EU Emissions Trading Scheme (ETS).

 

Costs have been estimated at between €575 ($903) and €800/tonne CO2 equivalent for bioethanol made from sugar beet and over €600 for biodiesel made from oilseed rape, compared with an EU ETS allowance price of €20-€30 per tonne, the report said.

 

As part of the report, UK Prime Minister Gordon Brown urged Britons to stop wasting food and pushed G8 leaders to aid food production in Africa to ease surging global prices.

 

In April, Brown said he would push for the EU to change its biofuels targets if a government report showed they were responsible for driving up food prices and harming the environment.

 

($1 = €0.64)

By: Mark Watts
+44 20 8652 3214

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