From darling to dragon

C&I Issue 14, 2008

The tide appears to have well and truly turned on biofuels. A recent report has recommended that the UK, and by extension the EU, should reconsider the rate of expansion of the use of biofuels. Another report has laid the blame for the recent spike in food prices at the door of biofuels.

The Gallagher report, produced by the UK’s Renewable Fuels Agency, concluded that fuel and food could co-exist if crops destined for biofuel production are not grown on land currently used for food. In addition, the UK should slow its push for biofuels to a 0.5% increase by volume in transport fuels annually. At this rate, the UK would hit its transport fuel target of 5% biofuels by 2013-14 rather than 2010-11. The report emphasises the possibility of expanding biofuel production onto marginal or idle land, as well as using agricultural and other waste and non-food crops for biofuels.

The EU is already having second thoughts about its own biofuels targets. A European parliament panel voted in favour of lowering the target for transport to just 4% by 2015. The target currently stands at 5.75% by 2010 rising to 10% by 2020. Eric Johnson, a biofuels consultant for Atlantic Consulting, says, ‘It’s amazing how quickly biofuels went from the being the darling to the dragon.’ He says governments are now backing up and looking at how best to move forward.

Another report, produced by a senior economist at the World Bank and leaked to The Guardian newspaper, blamed the rush to biofuels for three-quarters of food price rises since 2002. According to the World Bank’s index of food prices, the cost of food rose 140% between January 2002 and February 2008. The remaining quarter was due to higher energy and fertiliser costs, a weakening dollar and drought in Australia.

Green groups oppose the widespread roll out of biofuels and have said that ‘if you are in a hole you should stop digging’ and that these targets should be thrown out. Johnson says, ‘To my mind there’s a middle ground – biofuels were too popular and now they’re too hated.’

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