Should biofuels production be confined to the tropics?

The Biopact blog has looked at the commercial viability of a number of potential biofuel crops.

The blogger suggests that people in temperate latitudes will only find growing crops such as rape seed and wheat making sense commercially when the price of oil is considerably higher than it is now.

Green fuels based on low yielding crops, such as corn or rapeseed, survive when the price per barrel of crude reaches record highs, like it did a few weeks ago, when oil hit US$77/barrel. But now, with prices down US$20/barrel, not many biofuels from the North can compete. Subsidies and market distortions are needed to keep them alive.

(my emphasis)

He suggests that there is more commercial sense for producers in the tropics for growing potential biofuel crops such as palm oil which are commercially viable at around $58/bbl.

The irony here is that growers in temperate regions have food to spare, while many countries in the tropics are often close to producing enough food for themselves with minimal scope for surplus. I guess the question for them is will there be enough profit in growing fuel crops to pay for food imports. Is this another case where northern farmers in Europe and North America will be featherbedded and protected by unfair tariff walls against competition from producers in the tropics?

Am I right? is there a moral argument for producing uneconomic biofuels in the North?

Let me know.

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