EU rejects findings of OECD study on biofuels

The European Commission says its biofuel policy is positive for the environment, in response to an Organisation for Economic Cooperation and Development (OECD) report issued earlier this week which warned that subsidies for biofuels produced in Europe and America could disrupt markets without generating significant environmental benefits.

An EU Commission spokesman rejected some of the more questionable statements in the report:

Biofuels do produce less CO2 than fossil fuels, there is no doubt about that. I am confident that our biofuel policy is definitely positive for the environment.

The spokesman for the EU's Energy Commissioner Andris Piebalgs added that it was 'too early to say' to comment on the commission's mechanisms on biofuel production: 'We are working on different possibilities. It is still up for discussion so I can't give further details right now.'

Biopact must stress that this entire OECD report has been selectively read by many journalists and some environmentalists. Anyone who has actually read the document itself will have noticed that the report explicitly leaves room for a trade relationship between biofuel producers in the North and those in the South. It even suggests that such a relationship is necessary and requires the abandonment of trade barriers, tariffs and subsidies in the EU and the US. It states:

Liberalising trade in biofuels is difficult but essential for global objectives. Ethanol from sugarcane grown in Brazil is by far the cheapest biofuel today. South America and Africa have a large potential to increase biofuel production.

The study clearly calls for an opening of the market and for the creation of international biofuel trade, so that unsubsidized biofuels produced in the South can be imported by the EU and the US. These biofuels - like sugar cane ethanol - are indeed efficient, competitive, sustainable and reduce carbon dioxide emissions far more than biofuels produced in Europe or America. This is what the OECD report said.

It added:

bioenergy provides a chance to enhance growth in many of the world’s poorest countries by bringing about an agricultural renaissance and supplying modern energy to a third of the world’s population. This means not only improving export opportunities for developing countries to the industrialised world but, perhaps more importantly, helping them to use biomass to produce their own electricity.

Nobody reported on these crucial perspectives contained in the OECD analysis. We urge the media and environmentalists to read reports about biofuels more carefully instead of jumping to conclusions. They often contain analyses that are broad in geographical scope and go beyond our own backyard. If they systematically leave out Africa and Latin America's explicitly sustainable potential, they miss the whole point about the future of biofuels:
energy :: sustainability :: ethanol :: biodiesel ::biomass :: bioenergy :: biofuels :: subsidies :: tariff :: trade barriers :: OECD :: EU ::

In March, the EU adopted an energy policy which set a 10 percent minimum target for all member states for the share of biofuels in overall EU petrol and diesel consumption for transport by 2020.

The EU executive is working on a sustainbility scheme which focuses on the potential drawbacks to biofuel production.

In July, at the landmark International Conference on Biofuels, the EU suggested international trade in biofuels would become a viable option. Biopact was present at this crucial conference and found that key stakeholders and policy makers are already convinced that such a new trade relation is feasible and necessary if we want a truly green biofuel future (here and here).

References:
Forbes: EU says biofuel policy is 'definitely positive for the environment' - September 13, 2007.

Biopact: OECD warns against subsidies for inefficient biofuels in the North, calls for liberalisation of market - major boost to idea of 'Biopact' - September 11, 2007