Another Inconvenient Truth: Biofuels are not the answer to climate or fuel crisis

Today’s biofuel policies are not solving the climate or fuel crises but are instead contributing to food insecurity and inflation.

In today’s report “Another Inconvenient Truth”, Oxfam calculates that rich country biofuel policies have dragged more than 30 million people into poverty, according to evidence that biofuels have already contributed up to 30% to the global rise in food prices.

“Biofuel policies are actually helping to accelerate climate change and deepen poverty and hunger. Rich countries’ demands for more biofuels in their transport fuels are causing spiralling production and food inflation,” said report author, Oxfam’s biofuel policy adviser Rob Bailey.

“If the fuel value for a crop exceeds its food value, then it will be used for fuel instead. Thanks to generous subsidies and tax breaks, that is exactly what is happening. Grain reserves are now at an all-time low.”

Rich countries must stop and revise their policies now. “The evidence about their damage is overwhelming,” Bailey said. Even in poor countries where biofuels may offer some reward, the potential costs are severe and they should proceed with caution.
Rich countries are supporting their own biofuel production through targets, subsidies, tax breaks and tariffs. This has been described as a new “tax on food”.

“Rich countries spent up to $15 billion last year supporting biofuels while blocking cheaper Brazilian ethanol, which is far less damaging for global food security. That’s the same amount of money that Oxfam says is needed to help poor people cope with the food crisis,” said Bailey.  “This is a regressive tax that hits poor people the hardest because their food bills represent a greater share of their income,” he said.

The biofuels being grown today are not an effective answer to climate change, Oxfam says. Instead, biofuels are taking over agricultural land and forcing farming to expand into lands that are important carbon sinks, like forests and wetlands. This triggers the release of carbon from soil and vegetation that will take decades to repay.

Oxfam estimates that by 2020, as a result of the EU’s 10% biofuel target, carbon emissions from changing land use for palm oil could be almost 70 times greater than the annual savings the EU hopes to achieve from biofuels by then.

Bailey says that biofuels will not address rich countries’ need for fuel security. “Even if the entire world’s supply of grains and sugars were converted into ethanol tomorrow – in the process giving us all even less to eat – we would only be able to replace 40% of our petrol and diesel consumption,” Bailey said.  “Rich country governments should not use biofuels as an excuse to avoid urgent decisions about how to reduce their unfettered demand for petrol and diesel,” he said.

In developing countries, Oxfam says that biofuels could provide a sustainable energy alternative for poor people in marginalized areas – but that the potential economic, social and environmental costs can be severe, and countries should proceed with caution. In Mali for example, bioenergy projects provide clean renewable energy sources to poor women and men in rural areas. But, as the main plank of a policy to substitute transport fuel by rich nations, biofuels are failing.

“Biofuels were meant to be an alternative to oil – a secure source of new transport energy. But rich countries have designed their policies too much for the benefit of domestic interest groups. They are making climate change worse, not better, they are stealing crops and land away from food production, and they are destroying millions of livelihoods in the process.” said Bailey.

Read the report: Another Inconvenient Truth: How biofuel policies are deepening poverty and accelerating climate change