Bridges Trade BioRes • Volume 6 • Number 17 • 6th October 2006

DEBATE RAGES OVER BENEFITS AND DRAWBACKS OF BIOFUELS

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DEBATE RAGES OVER BENEFITS AND DRAWBACKS OF BIOFUELS

The role of biofuels in helping solve a range of problems — including climate change and overproduction of agricultural products — has been heating up. Biofuels were debated at the annual WTO Public Forum — held on 25-26 September this year — with UN Foundation chair and media mogul Ted Turner championing these fuels as a way out of the Doha round deadlock. However, several other commentators have urged caution and sought to shed light on the potential problems associated with biofuels.

Meanwhile, research providing scenarios for bioenergy production in the European context has been released by the European Environment Agency, and WWF has taken a position on biofuel use and development in the EU.

Turner moots biofuels as way out of Doha Round subsidy conundrum

Speaking at the opening of the WTO Public Forum on 25 September, Ted Turner said it would be a "disaster" if governments gave up on multilateral trade talks, as this would entail giving up on fighting poverty. Instead, he proposed a way out of the deadlock caused by differences over farm trade. Blaming rich countries’ need for farm subsidies on excess production, Turner said that biofuels — fuels made from agricultural products — provided the promise of vastly increased worldwide demand for agricultural products. This, in turn, he argued, would give "developed countries a chance to end the stalemate over agriculture subsidies by giving farmers incentives to grow biofuels." Meanwhile, biofuel production would offer developmental and environmental benefits to developing countries.

To illustrate this, Turner pointed to Brazil, which has saved US$50 billion in oil imports by using ethanol made from sugar, as well as other examples of crops that have been used to make biofuels such as palm, soy, rapeseed and jatropha. He emphasised that biofuels were renewable, could "dramatically cut greenhouse gas emissions", and could help poor countries generate jobs, reduce poverty, and diminish their reliance on expensive imported oil.

Therefore, Turner proposed that "developed countries should agree to phase out tariffs and reduce their subsidies for food and fibre crops and replace them with support for biofuels" over a 5-10 year transition period.

Others sound note of caution

Others, however, cautioned that even though biofuels have great potential, expectations for them should be kept realistic.

Unilever Chair Antony Burgmans, who addressed the session following Turner’s speech, warned that a growing world population’s demand for both biofuels and food would put extraordinary pressure on land and biodiversity, raising the spectre of deforestation in rainforests in Brazil and Borneo. He urged the audience to be wary of ‘low-intensity’ biofuels such as rapeseed oil that require several chemical inputs and have relatively low energy yields, although newer biofuels offered far greater possibilities.

Ronald Steenblik, Director of Research for the Geneva-based Global Subsidies Initiative, also cautioned against viewing biofuels as a "magic bullet" for the trade talks as well as for poverty and the environment. In an interview, he noted that the deadlocked agriculture negotiations dealt with much more than biofuel crops, and that some of the most politically contentious subsidies — to rice, cotton, and dairy — went to crops that were not even used to produce biofuels. He also questioned Turner’s apparent assumption that biofuel crops would be produced (often with the help of subsidies) and consumed domestically, rather than freely produced and traded. "Orienting subsidies towards biofuels ignores that biofuels themselves can be traded," he said, adding that there was little evidence that higher prices would obviate the need for subsidies.

Furthermore, Steenblik said, increased global demand for crops would inevitably affect land and water use. Enormous price increases for agricultural products would likely have a negative impact on net food-importing developing countries. Policymakers should keep specific local conditions in mind when discussing cost-effective ways of replacing greenhouse gas emissions, he emphasised.

In a viewpoint piece published on the BBC website on 22 September, Jeffrey A McNeely, Chief Scientist of IUCN-The World Conservation Union, stressed the need for better policies, better science and genetic modification in order for biofuels to become a real success. He warned against, among other, habitat destruction to produce huge amount of as-of-yet relatively inefficient biofuels. "Little wonder that many are calling biofuels "deforestation diesel", he noted. He said biotechnology could make a real contribution and called for further research, as well as public sector involvement to ensure that social and environmental benefits without a market value are realised.

Biofuels in the European context

Meanwhile, environment organisation WWF clarified its position on biofuels in the EU, stressing that biofuels must be part of a broader strategy for transport and renewable energy. In a position paper from September, WWF emphasises that a large number of complementary policies and measures are needed in order to drastically decrease greenhouse gas emissions, with the transport sector being key to success given its large and growing emissions. WWF supports the EU biofuels target of 5.75 percent of transport fuel by 2010. The organisation lays out certain criteria for social and environmental sustainability, however: biofuels must deliver greenhouse gas and carbon life-cycle benefits over conventional fuels, and biofuels must ensure positive natural resource use and careful land-use planning. As such, WWF promotes a mandatory greenhouse gas certification scheme for biofuels. In addition, consideration should be given to where and how biofuel feedstocks are produced, including an assessment of potential food, land and water displacements.

A recent study by the European Environment Agency (EEA) sheds some light on the sustainability of bioenergy overall in the European context, of which biofuels are one component. While the report sees significant potential for the development of bioenergy from waste, forestry and agriculture, it stresses the need for environmental guidelines. "To further explore co-benefits with nature conservation" such guidelines need to become an integral part of planning processes at the local, national and European level. The study also stresses further development of better and more efficient bioenergy technology and options.

Additional resources

Commentary by Jeffrey McNeely for the BBC - "Biofuels: Green energy or grim reaper?" - is available at http://news.bbc.co.uk/2/hi/science/nature/5369284.stm.

WWF position on biofuels in the EU is available at http://assets.panda.org/downloads/wwf_position_eu_biofuels.pdf.

The EEA report entitled "How much bioenergy can Europe produce without harming the environment?" is available for download at http://reports.eea.europa.eu/eea_report_2006_7.

ICTSD reporting.