Time for a balanced debate on biofuels

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Harvesting corn for bioethanol. Bergheim, 2009. [Windwärts Energie/Flickr]

Public policy should be based on verifiable facts, rational analysis and, where possible, on solid science, writes Dick Roche.

Dick Roche is a former Irish minister for environment, and is currently an advisor to Hungary’s Pannonia ethanol company.

When Mark Twain wrote – “It ain’t what you don’t know that gets you in trouble. It’s what you know for sure that just ain’t so” he could have had Europe’s long-running acrimonious debate on biofuels in mind.

EU policy on biofuels has been dominated by a debate that often disregards facts, eschews calm or rational analysis and that falls short when it comes to science.

As we head into the debate on decarbonisation of road transport would it be too much to hope that old myths not be trotted and that rather more attention be paid to reality?

While the ink on the Renewable Energy Directive was still wet, key policy makers within the EU institutions became seduced by mythologies that posited an inextricable conflict between biofuels and food.

And they were not means alone. Following a dramatic price spike in commodity and food prices in the period 2004-2007 the food vs fuel myth became embedded in the thinking of many international bodies.

The price spike coincided with an upsurge of interest in and production of biofuels.

With little or no in-depth analysis a succession of international bodies put two and two together and came up with the wrong answer: biofuels were to blame for rising food prices and were contributing to world hunger and poverty along with a list of other evils.

That view was assiduously fostered by an unholy lobby of big oil and big food, augmented by a chorus of big NGOs.

In 2007, Jean Ziegler, the controversy-courting UN special rapporteur, branded the production of biofuels a “crime against humanity”. Few would dare question the opinions of a UN Special Rapporteur. The food versus fuel myth got legs.

The following year, World Bank President Robert Zoellick clamoured on the bandwagon branding biofuels a “significant contributor” to soaring world food prices. Zoellick’s intervention grabbed worldwide headlines. A ‘confidential’ report by the World Bank that was obtained by the Guardian went further blaming biofuels for forcing “global food prices up by 75%”, a figure that the newspaper noted,  “emphatically contradicts the US government’s claims that plant-derived fuels contribute less than 3% to food-price rises.”

In a spectacular demonstration of institutional herd behaviour the IMF, FAO, OECD all got in on the act. The IMF attributed a massive 70% of the increase in corn prices to the global increase in biofuel production and warned of more to come. The FAO predicted commodity price increases of 12-15% by 2017. The OECD settled on predicted rises of between 8% and 35%.

The European Commission came in with more modest figures predicting that EU production of 1st generation ethanol would cause price changes of at least 4% in cereals, with biodiesel hiking vegetable oil prices by at least 24%.

Looking back nine years with the benefit of actual data, as opposed to grossly incompetent projections, we now know that the all of the major international ‘authorities’ were wrong. Their dire predictions on price hikes in food prices never materialised.

In a little less than a decade, the rate of ethanol global production has more than doubled. In the same period, cereal prices dropped by close to 50%: food prices, in general, are down by over a third.

In 2010, the World Bank admitted that it got its predictions on biofuels wrong. A report by its Development Prospects Group found that “the effect of biofuels on food prices has not been as large as originally thought”. A policy paper prepared by the Bank’s Environment and Energy Team was more precise, finding “the impact of biofuels on global or aggregated food prices are rather small” and that “about 88% of the rise in global food prices is caused by factors other than biofuels”.  In a 2013 report, the Bank concluded, “oil prices account for almost two thirds of the prices from 1997-2004 to 2005-12”.

A May 2013 paper by the same World Bank Group ‘ Long Term Drivers of Food Prices’ again found oil was the primary driver of food prices. It also calculated the contribution of a whole host of other drivers. The paper does not rank biofuels as a player of any significance.

In its first progress report on renewable energy, the Commission implicitly admitted that it too got the sums wrong. It estimated EU biofuel consumption to have a 1%-2% price effect on the global cereals market and 4% on oil crops (rapeseed, soybean, palm oil).

In January 2015, there was an important shift in the FAO position on biofuels. Addressing the Global Forum for Food and Agriculture, the FAO Director General, Graziano de Silva, spoke of the need for a “paradigm shift” and “to move from the food versus fuel debate to a food and fuel debate”.  De Silva cautioned that ” biofuels should not be simply seen as a threat or as a magical solution. Like anything else, they can do good or bad.”

Publication of the Commission’s Communication on the Decarbonisation of Transport will inevitably reopen the biofuels debate. European policy-makers would be well advised to heed the advice of the FAO DG and get beyond the arid and unproductive debate in which they have been mired for the best part of a decade.

That rancorous debate has cost Europe dearly. When the Commission’s 2009 proposals on biofuels were under consideration, a senior executive of Abengoa cautioned that the uncertainties created by the Commission’s actions could turn renewables into a ‘zombie’ industry. In the case of Abengoa, the prediction has become an unfortunate reality, the company has had to close facilities and put a number of its refineries up for sale.

Across Europe, the chaotic, undifferentiated approach dictated by the Commission and its cheerleaders has cost workers their jobs, caused investors to flee the industry, robbed rural communities, particularly in central and eastern EU member states, of development opportunities, denied European farm families access to a valuable income stream, lost an opportunity to make Europe that little bit less dependent on fossil fuel imports, ensured that European agriculture remains heavily dependent on imported GMO based animal feed,  and ironically, has made it that much more difficult for the EU to meet its GHG targets, particularly in road transport.

Before we plunge into the next round of the debate on biofuels, it would be no bad thing to stand back and look at what has been achieved in the US through the development of a strong ethanol sector.

In 1960, the average US farmer produced sufficient to feed just 26 people. By 2012 the average US farmer could provide food for 155 people. In addition, US farmers produced over 13 billion US gallons [almost 53 billion litres] of ethanol and 34 million tonnes of animal feed.

The security of a strong domestic market provided US farmers with the capacity, and the confidence to invest in dramatically improving productivity. As a result, US farmers produce more food, more animal feed & more renewable fuel than ever on the same area of land.

By 2011, the US had 209 ethanol distilleries in 29 states, with 140 more under construction or expansion. Europe’s ethanol industry was at a standstill.

There is no reason why – with the right policies- the extraordinary achievements in the  US cannot be emulated in the EU.

The rural economies of central and eastern EU member states that have a huge, unrealised capacity to produce sustainable low ILUC bioethanol would be the biggest direct beneficiaries however we would all be ‘winners’ this need not be a zero-sum game.

All too often, the EU biofuels debate has been dominated by, no doubt, well-meaning politicians, bureaucrats and NGOs who have a near apocalyptic and undifferentiated view of all biofuels, who are oblivious to facts, science or reality, people and agencies that in Mark Twain’s words, know for sure (what) “just ain’t so”.

Would it be too much to ask that going into the next phase of the debate that we all park ‘the facts that we know for sure’ in our heads at the door and look instead at the facts as they are ‘on the ground’.

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