Why have food prices been soaring? According to the World Bank, three-quarters of the 140 per cent rise in global food prices between 2002 and 2008 was due to biofuels: the replacement of food crops with plants grown for fuel...

The European Union and the great biofuels disaster

WORKERS, NOV 2011 ISSUE

Politicians have a poor track record when it comes to making bets on unproven technologies. And no one makes poorer decisions than the European Union – except, perhaps, Labour and Coalition governments who implement those decisions. So when the EU issued a Directive in 2003 instructing that 5.75 per cent of transport fuels to be made up of biofuels, and backed it up with another Directive in 2009 with a new target of 10 per cent renewable energy in transport fuels by 2020, only a committed Europhile would expect any good to come of it. And yet hardly anyone foresaw the extent of the potential damage to the world – its people and environment.

The debate over the production of biofuels for commercial use has developed over some years now and the risks have been documented. One is that as large companies spot a lucrative market, they switch agricultural land from producing crops for people and produce crops for cars instead.

To give some idea of the size of the problem: according to a Worldwatch study the US would need 30 per cent of its agricultural land if it were to produce 10 per cent of its fuels with home-grown biofuels. Even with biofuels in their infancy, the UN Food and Agriculture Organisation reckoned their production has been responsible for the surge in global grain prices in 2006.

And things haven’t got any better since then. In a book* published last year Professor James Smith from Edinburgh University’s Centre of African Studies warned we cannot ignore the statistics that reflect the speed of growth, the extent of biofuel production and its impact on food prices: “Figures from the US Department of Agriculture for 2009 show that the grain grown to produce fuel was enough to feed 350 million people for a year at average consumption levels. This represents a third of all those who constantly go without food.” A third of all US maize is now used for ethanol, and globally, “between 2002 and 2006, the amount of land used to grow biofuels quadrupled and production tripled.”

The food cost

Smith points out that contrary to US claims about biofuels contributing only 2 to 3 per cent of food price increases in recent years, the World Bank Mitchell Report, published in 2008, reckoned biofuel production had caused 75 per cent of the 140 per cent increase in staple food prices occurring between 2002 and 2008. The price of maize, the main feedstock for ethanol in the US, doubled from $117 to $233 in the two years 2006/2007.

Oil companies are looking both ways on this. They want to carry on selling traditionally produced petrol, and are also investing heavily (hundreds of millions of pounds a year) in biofuels: an each-way bet. But when an oil executive says – as Shell’s Eric Holthusen did in 2006 – that using land to grow fuel when people are starving is “morally inappropriate”, it’s probably time to look at what the European Union is doing.

What are biofuels?

Biofuels are any liquid, solid or gaseous fuels produced from organic matter. The extensive range of organic materials used for biofuel production includes starch and sugary plants such as corn, wheat or sugar cane; oily plants such as rape seed, soya beans or jatropha; vegetable oils and animal fats; wood and straw; algae and organic waste and others. Biofuels (mainly bioethanol and biodiesel) are commonly referred to as first-generation – the current technologies – or second- generation, which cover a variety of technologies in the pipeline whose central characteristic is that they can convert the woodier (lignocellulosic) parts of plants into fuel and so are more efficient.

Second- and third-generation biofuels that do not compete directly (or, at least, not so much) with crop land are being developed, including the production of algae as a source of vegetable oil, biodiesel, bioethanol and other biofuels. Algal fuels may yield up to 30 times as much energy per unit area as first- and second-generation biofuel crops.

One of the alleged benefits of biofuels is that they are more carbon-friendly than fossil fuels, since the carbon they release is simply that taken from the atmosphere, rather than carbon locked up for millions of years in oil deposits. But others – including Nobel laureate Paul Crutzen – dispute the calculations, pointing to the carbon cost of turning earth, fertilisers, and biofuel production and distribution. ■

European law now dictates that 5.75 per cent biofuels must be blended into all transport fuel, but though the target was set for 2010, it hasn’t been achieved (in Britain, it’s currently 2.6 per cent) and has had to be extended, in Britain to 2013. And no wonder: there simply isn’t enough land in Europe to grow the crops required.

So there are two principal results of the policy: land in the developing world is being converted from food production (or, in the case of Indonesia, from virgin rainforest) to “grow” fuel; and the cost of fuel is going up, because it costs more to turn maize into petrol or diesel than to use fossil fuels (of which we still have a lot!).

You couldn’t make it up: only the European Union can produce such a cock-eyed disaster.

As with many technical developments of humanity arising as necessity becomes the mother of invention, capitalism hijacks the direction of development through investment. “Biofuels represent both a promise of a technologically driven future and the spectre of a web of known unknowns and unknown unknowns. [They] are driving and transforming the increasingly entangled relationship between energy, food security and climate change,” says Smith. He suggests that biofuel production may represent “the biggest change in North-South relationships since colonialism” because “the production of biofuels risks reprioritising land use across the globe, and as yet we know little about the implications of this.”

For example, several African countries have been attracted by the lure of saving foreign exchange on fuel imports and even earning income, despite inadequate national food security. In Tanzania, where 25 per cent of foreign exchange is spent on oil imports, “foreign companies are growing sugar cane for bioethanol so that European countries can meet their biofuel blending targets,” says Smith.

Biofuels can work

In the right climate, with sufficient rainfall (biofuel crops are very, very thirsty), the technology can work without wrecking the environment – witness the outstanding success of Brazil’s biofuel production. Brazil pioneered the commercial use of biofuel (auto gas as it is known in the petrol stations) and now uses it extensively in the city areas, especially Sao Paulo.

But as Smith points out, that success cannot be replicated in many other places for agronomic and other reasons. He questions the Indian government's huge investment in jatropha plantations since the crop's performance is unproven under anything but ideal conditions, and also because the so called “marginal land”, on which it is planned to plant jatropha orchards, already supports the grazing and gathering needs of millions of the very poor.

There are also indications in aerospace that infrastructure used to supply fuels can be compromised because some types of biofuel leave residues in the delivery pipes that can lead to contamination of the next delivery of, say, jet fuel. There could also be impacts on the fuel control systems of actual aircraft. So even though biofuels have yet to be fully approved for use in aircraft an effect is already being felt. More development will obviously be needed. That, too, will require research.

British workers have yet to be directly affected by the use of agricultural land for biofuel production, except of course through rising food prices. They are, though, at the forefront of global biofuels research – Britain has a world-leading research base in plant and microbial sciences. There are plenty of ideas for biofuels that won’t eat into the food supply.

In September 2009, £27 million was set aside for a British bioenergy research institute by the Biotechnology and Biological Sciences Research Council to work towards the creation of biofuels from willow and straw. It will take a great deal more investment over the years to keep Britain ahead in the race to develop biofuels that meet the needs of the people, rather than the investment needs of capital. Much of this is public money, and the question of who should or could control this technology – capitalists or workers – needs to be raised. ■

*Biofuels and the Globalisation of Risk, by James Smith, Zed Books 2010, 150pp, ISBN 978 1 84813 572 7 (Pbk) £17.99