Study Highlights
The impact of biofuels on food supplies has been exaggerated during the "food versus fuel" debate
The debate is about whether the use of agricultural output for energy purposes competes with its use for food purposes, resulting in food shortages and/or higher food prices. This long-running discussion was catapulted to global prominence by the steep rises in global food prices that started in 2006. Some commentators have sought to make it a “biofuels-equals-bad” argument. However, this view ignores wider global socioeconomic trends, as well as the non homogenous nature of biofuels, especially second and third generation. For example, in volume terms, bioethanol accounts for more than 90 percent of the biofuels market and 90 percent of bioethanol production come from just two crops: sugarcane and corn. However, corn price rises have been the smallest among those of grains—up 31 percent over the year to March 2008, compared with the 78 percent rise in rice, which is not a common biofuel. Raw sugar prices actually fell in early 2007 and struggled for many months to recover. The reality is that biofu¬els can be produced sustainably or unsustainably. It is up to regulators to ensure that the incentive system around biofuels drives sustainable production and the use of feedstocks and processes that produce a net greenhouse gas reduction.
While governments are expected to guide sustainability through the legislative and regulatory environment, their support¬ing role as consumers is often underrepresented.
In most countries, the state controls or influences public services with a significant transport element—education, health, waste and recycling, parks, emergency services, armed forces—and there are many examples of countries where biofuels have begun to form part of this trans-port element. While such develop¬ments started off in an uncoordinated manner, there are opportunities for countries (especially within a region) to share ideas, information and experience about switching public-sector fleets to biofuels. The European Union, for example, is funding several coordination programs.
A number of private sector industries are also moving—or considering moving—toward greater adoption of biofuels, but they remain highly sensitive to public perceptions.
Several road and rail passenger transport companies have begun to position themselves with customers as environmentally friendly alternatives to personal car use or aviation, and are seeking to strengthen this dif¬ferentiation by investigating methods to improve their emissions profiles. Freight transport is a further key market for biofuels, and already several large logistics providers are either conducting trials or moving to biofuels. Retailing relies on customer perceptions and buying values—so it is not surprising that some large retailers initially voiced their public support for biofuels, and then scaled back amid the intense food-versus-fuel debate in recent months. Even airlines are looking to biofuels as a possible way to reduce their emissions. Despite the fact that the physical and chemical properties of jet fuel are different from auto fuels, the most bullish airlines is looking to biofuels to fulfill between 5 and 10 percent of their fuel needs.
Take-up of biofuels by the average motorist will be dependent upon three things evolving at the same time: the availability of new fuel and vehicles that use them—and the infrastructure that supports the new fuel.
One without the other two has limited effect. For example, flexible fuel vehicles (FFVs) form a significant proportion of new-vehicle sales in some places, but many times are driven on fossil fuels because of the scarcity of biofuels refueling sites.