EC report says biofuel policy will raise crop prices
Sat 27 March 2010
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A newly released report from the European Commission's Joint Research Centre (JRC) says that EU biofuel policy could lead to a 6.5% increase in crop prices in Europe, assuming a 7% share of biofuels in transport by 2020. Meanwhile, an impact assessment by the EC's trade directorate highlights the risk to biofuel sustainability and environmental damage through the impact of indirect land use change (ILUC).
According to the JRC report biofuel policy could raise ethanol prices by 8% while EU prices for oilseeds and plant oils would increase by 7 and 30% respectively, and 21% for soft wheat and sugar.
The JRC report, originally produced in 2008, was obtained through a freedom of information request by green transport group T&E and seen by ENDS. The report is now available on-line. Notably, the study did not model the impact of the full EU 10% target but suggested the effects would be greater.
The report goes on to say that land use would progressively increase globally, which means prices would eventually go down. The report does not focus on the environmental impact of increased production, but says EU biofuel policy will not be "environmentally neutral".
In a separate development, the European Commission’s trade directorate has released an impact assessment on biofuels. The assessment found that the EU’s current 10% target for the share of renewable energy in transport fuels by 2020 which includes a 5.6% share for biofuels does not consider the sustainability of biofuels.
The report highlights the risk of biofuel sustainability and environmental damage through the impact of indirect land use change (ILUC) should the share of biofuels need to increase if renewable energy sources fail to deliver the emissions reductions expected.
A spokesperson for T&E commented, “The report indicates that if the entire 10% transport target were met by biofuels, the environmental sustainability of the project would fall into doubt.”
T&E, together with 11 other NGOs, has written to the Commissioner for Climate Action raising concerns over a proposal for calculating the life-cycle greenhouse gas (GHG) intensity of fossil fuels under the 2009 Fuel Quality Directive.
The Commission is due to issue proposals on whether to include ILUC in EU renewables rules later this year.
In other biofuels-related developments, the EC has authorised French aid of €18.9 million for the GAYA biofuels research programme. The programme is aimed at developing production technologies for second generation biofuels by developing a decentralised biomethane production industry based on biomass gasification. (See associated link.)
In the UK, the Carbon Trust has announced that it has brought together a consortium of British businesses led by Axion Energy to pioneer the development of a world-class, commercially viable process to turn municipal and wood waste into transport biofuel. The consortium will work on the enhancement of a process called pyrolysis to process waste biomass to produce a greener and cheaper alternative to existing biofuels at mass scale, to blend with fossil fuels.
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