Source: Unilever

What’s wrong with agrofuels?

Diverts attention and resources from real solutionsCar efficiency proposals already weakened

Perceived by public as green transport solution

Heavily subsidised - estimated at €3.7 billion

Continues to exploit Southern CountriesEU already importing 3.8 m tonnes palm oil for food

40 million tonnes soy products as cheap animal feed

Plans for 10 million hectares for new palm plantations

What’s wrong with industrial agrofuels?

Their energy balance is very low and negative for corn ethanol

May increase greenhouse gas emissionsMost direct GHG savings are minimalLeads directly or indirectly to deforestation or damage to other carbon sinks Impacts of fertilisers underestimated?

Threatens biodiversityExpansion of monocultures in SE Asia and Latin America leading to deforestation, etcSet-aside in EU?More intensive agriculture

What’s wrong with agrofuels?

Increase in poverty and hunger

Food versus Fuel

Harmful to farmers who do not own land as well as rural and urban poor - UN

World grain stocks lowest for 30 years

Human rights and social problems

New monocultures often linked to land expulsions of local communities and indigenous peoples

Poor working conditions eg sugar cane

Agrofuels and hunger

forecast demand for biofuels will push corn prices 26.3% higher by 2020 (International Food Policy and Research Institute)

Poor people spend in the region of 60-80% of their income on food

Ca 25% increase untenable

European Commission predicts 3-6% increase in world cereal prices due to the EU’s 10% target = 50-100 million extra people being hungry in 2020.

The Farmers perspective

Local agrofuels from oilseeds directly pressed on the farm and used on the farm or neighbours are a positive contribution to reduce oil consumption in agriculture, to increase farm´s autonomy. And the by- products are a good animal feed for the farm.

Industrial agrofuels are not efficient on economical level and they are only produced with large subsidies

Industrial agrofuels will lead to intensification of agriculture, will accelerates the concentration of agriculture on bigger farms

The Farmers perspective

Farmers need fair and stable prices from market regulation and not from competition for land use with industrial agrofuels

Industrial agrofuels lead to land price increase

they produce animal feed, what is good for the EU, but because of land competition they raised the grain prices too rapidly on a very unstable way, leading to economical crisis for animal,milk,egg production (prices for these products doesn´t follow)

Biodiesel

Biodiesel

Growing evidence

EU’s Joint Research CouncilMoney better spent elsewhere - costs outweigh the benefits

Will lead to more imports of commodities

Employment effects neutral

Cannot say the 10% will reduce GHG’s

Better uses of biomass

Growing evidence

European Environment Agency (this week)Other uses of biomass better economically and environmentallyBiomass finite resource - efficiency in cars and housing missing10% increases not possible within EU, pressure on soil, water and biodiversityWill need large amount of imports, sustainable production outside Europe difficult to achieve and monitorSuspend 10% target - “the overambitious 10% biofuel target is an experiment, whose unintended effects are difficult to predict and difficult to control.”

Global warnings - IMF

“Rising biofuel production in the United States and European Union has boosted demand for corn, rapeseed oil, and other grains and edible oils. Although biofuels still account for only 1.5 per cent of the global liquid fuels supply, they accounted for almost half the increase in consumption of major food crops in 2006-07, mostly because of corn-based ethanol produced in the United States. Biofuel demand has propelled the price of corn, but also other grains, meat, poultry, and dairy through cost-push and crop demand and substitution effects.”

IMF World Economic Outlook, April 2008

Global warnings - World Bank

Increased bio-fuel production has contributed to the rise in food prices…Concerns…have prompted governments to increase bio-fuel production and use leading to greater demand for raw materials including: wheat, soy, maize and palm oil. Food price hikes are also linked to higher energy and fertilizer prices, a weak dollar and export bans.

(Rising Food Prices Threaten Poverty Reduction,

Press release April 9, 2008)

EU Policy

Renewables Package -10% mandatory target by 2020

Fuel Quality Directive could also create demand

Heavily subsidised

All hope on second generation and certification2nd generation not yet commercially available

No one looking at the social or environmental aspects

Economically feasible? OECD doubts it.

Renewable Energy Directive

10% mandatory target

No indirect land use changes

Article 95 and not 175 (member states can’t introduce stronger laws)

Greenhouse gas emission savings only 35%

Deforestation allowed up to January 2008

Fuel Quality Directive

Currently in negotiations between Council and Parliament. Possible 1st reading?

Calls for 10% reduction in GHG emissions by 2020 in all road transport fuel

Sustainability criteria being developed for FQD and RES

Parliament Environment Committee supported reasonable criteria

Key problem: how will the 10% be met? Oil companies cutting flaring or oil companies using biofuels?

Timeline

Renewable Energy DirectiveEnvironment Committee vote 14-16 June

Trade Committee vote 7 July

Fuel Quality Directive1st trialogue meeting 11 June

2nd trialogue meeting 23 June

Plenary vote 7 June