OECD blasts EU biofuels rush

Government support for biofuels will cause food shortages and lead to the destruction of natural habitats – while making little impact on climate change, warned the Organisation for Economic Cooperation and Development (OECD), delivering a blow to EU plans to obtain 10% of its transport fuel from plants by 2020.

Even in the ‘best-case scenario’, biofuels will only be able to achieve a 3% reduction in energy-related CO2 emissions by 2050, thus failing to reduce petroleum fuel consumption, states a new report by the OECD
The study, which is to be presented to ministers and government experts from the OECD’s 30 member states on 11-12 September, adds that even this small benefit would come at a huge cost because “without subsidies, most biofuels cannot compete on price with petroleum products in most regions of the world”.

It explains that in the US, for example, around $7 billion is spent each year on support to ethanol, so that each tonne of carbon dioxide that is avoided in fact costs over $500 in taxpayers’ money. In the EU, the cost could be up to ten times higher, add the authors.

The report criticises current government policy bias towards biofuels, saying that subsidies and tariff-protection measures will drive land owners to divert land from food or feed production to the production of energy biomass, thereby driving up food prices.

“As long as environmental values are not adequately priced in the market there will be powerful incentives to replace natural ecosystems such as forests, wetlands and pasture land with dedicated bio-energy crops,” states the study, concluding that subsidies should be phased out – with the money reinvested in research on second-generation biofuels.

EurActiv