Europe’s thirst for biofuels spells hunger for millions, as food prices shoot up

Land used to power European cars with biofuels for one year could produce enough wheat and maize to feed 127 million people, Oxfam reveals ahead of today’s important EU Energy Ministers’ meeting.

With the world’s poorest at greater risk of hunger as a result of spiraling food prices, the international agency is calling on the EU to rethink its dangerous love affair with biofuels.

In a new GROW campaign report, The Hunger Grains, Oxfam warns that Europe’s growing appetite for biofuels is pushing up global food prices and driving people off their land, resulting in deeper hunger and malnutrition in poor countries.

In Europe, EU biofuel mandates could cost every adult about €30 each year by 2020. In 2008, about €3 billion were spent in tax exemptions and other incentives for biofuel production in the EU, comparable to the value of cuts agreed under the controversial Greek bail-out deal in February.

“Depriving millions of people of food, land and water”

The report comes out as European Energy Ministers meet in Cyprus to discuss Europe’s post 2020 renewable energy strategy. Current EU law requires 10% of transport energy to come from renewable sources by 2020, with almost all of it expected to come from biofuels made from food crops.

“Europe has helped spark a global rush for biofuels that is forcing poor families from their homes, while big business piles up the profits. Biofuels were meant to make transport greener, but European governments are pouring consumers' money down the drain, whilst depriving millions of people of food, land and water,” said Natalia Alonso, Head of Oxfam’s EU Office.

“The current spike in global food prices is a loud alarm bell that should wake up EU Energy Ministers meeting today. It’s this simple: unless EU governments scrap their biofuel mandates, which will double biofuel consumption over the next few years, many more people will be plunged into poverty,” added Alonso.

Alternatives exist

Corn and soy prices reached record highs this summer, hitting poor people hardest as they can spend up to 75% of their income on food. By 2020, EU biofuel mandates alone could push up the price of some foods by as much as 36%. This would affect us all but would have a particularly severe impact on poor people who are already struggling to afford the food they need to survive.

Since 80% of EU biofuels is biodiesel, made mostly from rapeseed, soy and palm oil, EU mandates have a particular impact on the global price of vegetable oil and oilseeds. This drives up the retail price of cooking oil in importing countries such as Haiti and exporting countries such as Indonesia. The latter is one of the EU’s main sources of biodiesel. By 2020, Europe could require a fifth of all the vegetable oil produced globally to meet its demand for fuel.

“Europe’s biofuels policies are making climate change worse, not better, and poor people are paying the highest price. There are alternatives – getting governments to set efficiency standards for car manufacturers, create better transport systems and promote electric cars,” added Alonso.

Related links

Download the report: The Hunger Grains: The fight is on. Time to scrap EU biofuel mandates.

Join Oxfam's GROW campaign to ensure we all have enough to eat, always

Notes to editors

High quality pictures and graphics

Policy recommendations at a glance

Oxfam calls on EU governments to scrap biofuels mandates immediately

Technically, so that they are not in contravention of EU law, this means that the EU 2020 target for 10% renewable energy in transport must also be scrapped when it comes up for review in 2014. At the moment, EU governments are also discussing 2030 targets for renewable energy – it is crucial that no new target is set for renewable energy in transport as this is likely to be met almost entirely using biofuels.

EU Energy Ministers today will be discussing the European Commission’s policy blueprint for 2030 (Renewable Energy: a major player in the European energy market).

Read Oxfam’s reaction to the draft proposal by the European Commission, leaked to the press on 11 September, to introduce a 5% cap on the use of crop-based biofuels by 2020.

Facts and figures

  • If the land used to produce biofuels for the EU in 2008 (when biofuels accounted for 3.5 per cent of transport fuel in the EU) had been used to produce wheat and maize instead, it could have fed 127 million people for the entire year (Source: see report: page 16 and annex).
  • Soy and maize prices were at all-time highs in July (World Bank) and prices of cereals and oil remained at peak levels in August (FAO).
  • Modeling based on current plans for sourcing biofuels suggests that EU biofuel mandates could cost every adult about €30 each year by 2020. For example, by 2020, this policy could cost UK consumers between £1 billion and £1.9 billion more per year, that’s about £35 from every adult, and German consumers between €1.37 billion and €2.15 billion more, up to €30 per adult (source).
  • By 2020, the EU’s biofuels policies alone could push up vegetable oil prices by up to 36%, maize by up to 22%, sugar by up to 21%, oilseeds by up to 20% and wheat by up to 13 % (source).
  • Modeling of the impact of meeting 10% of demand for diesel using biodiesel suggests that, by 2020, Europe could require a fifth of all the vegetable oil produced globally just to meet its demand for fuel (source).
  • Oxfam research in the Philippines shows that land being acquired for biofuels production in 2010 could instead be used to produce up to 2.4 million metric tonnes of rice, enough to make the Philippines self-sufficient in rice production.
  • Recent evidence suggests that two thirds of big land deals in the past ten years are to grow crops that can be used for biofuels – such as soy, sugarcane, palm oil and jatropha (source).
  • In 2008, when biofuels accounted for 3.5% of transport fuel in the EU, a study commissioned by the EC estimated that 70,000km2 of land was needed to grow the crops needed to meet this demand (source). This is an area close to the size of Belgium and the Netherlands combined. On the basis of the very imperfect data available, close to half of that area was estimated to be outside the EU.
  • Some biofuels actually accelerate climate change through indirect land use change (ILUC). When carbon stores such as forests and peat lands are turned into crop fields, millions of tonnes of greenhouse gases are released – even more so than those produced by fossil diesel. Plowing up carbon sinks to meet EU biofuel mandates could be as bad for the environment as putting up to an extra 26 million cars on Europe’s roads (source).

Examples

The accelerated rush for land – for food and fuel – means more poor people are at risk of losing their homes and access to land to grow enough food to make a living and have enough to eat. This is often without consultation or compensation:

  • Ghana: In one jatropha plantation for biodiesel production, 69 families were thrown off their land, without being consulted or provided with any kind of compensation and 1,500 more families could lose land if the plantation develops as planned (source). The biofuels sector in Ghana is still in its infancy, but most biofuel crops grown in this country are likely to be exported to the EU to make biodiesel.
  • Paraguay: Each year 9,000 rural families are evicted by soy production and nearly half a million hectares of land are turned into soy fields. For the 44 families living beside huge soy plantations in Lote 8 in eastern Paraguay, farming has become almost impossible. Water has become increasingly scarce as local resources are used up irrigating the plantations. As the water table falls, the community has had to sink wells twice as deep into the ground to reach drinking water – they now only hit water after 20 metres, compared with an average of 10 before the plantations arrived. More than half of the soy grown in Paraguay is exported to Argentina, and much of this is turned into diesel either in Argentina or in Europe to fuel Europe’s cars.
  • Indonesia: Large-scale oil palm plantations are benefiting a small group of companies and local elites, while small scale farmers and people living in poverty are losing out. The way that oil palm is produced has led to air and water pollution, soil erosion and flooding. Human rights abuses, breaches of investor agreements with communities, and the destruction of environmental resources associated with the expansion of oil palm plantations has led to conflict in this country, which is one of the EU’s main sources of biodiesel.

Oxfam’s GROW campaign is calling for global action to fix a broken food system where 925 million people already go hungry every day. This could get worse in the face of dwindling natural resources, like land, the gathering pace of climate change and increasing food price volatility.

Contact information

For further information and to arrange interviews/briefings, please contact:

  • Angela Corbalan on + 32 (0) 473 56 22 60 or angela.corbalan@oxfaminternational.org