Success derails biofuels bandwagon

A global, government policy-fuelled rush to produce biofuels is backfiring as it pushes up costs and makes the environmentally-friendly alternative fuel far less competitive.

In the near term a looming biofuels glut plus falling rival crude oil prices, down a fifth on last summer’s highs, mean producers can less easily pass on their spiralling costs.
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Falling oil prices are hurting sales of biofuel which was barely competitive before, pricking European and U.S. europhia built on subsidies and ambitious targets.

Profits are still to be had but a continuing scramble for raw materials like corn, soy and wheat will knock margins as producers re-negotiate more pricey supply contracts.

AlertNet