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Biofuels increase emissions - and profits

Straight from a most unlikely source comes news of another eco-scandal. The Organisation for Economic Cooperatation and Development (OECD) has exposed the fact that the European Commission is colluding with renewable energy corporations and investors. The aim is to ensure that environmental standards are not allowed to interfere with profitability and investment opportunities in biofuel production. The OECD says that Europe has adopted ambitious targets for switching to biofuels “without an in-depth understanding of a sustainable production level and from where this biofuel could be supplied”. It warns that there is “a serious risk that biofuel quotas are higher than potential sustainable supply, creating a strong incentive to ‘cheat’ in the system”.

And this cheating is already well under way. Biofuel corporations are actively opposing the introduction of mandatory sustainability standards by the EC, as a new report published by the Transnational Institute explains. Most “renewable energy” businesses responding to an EC consultation rejected the idea of safeguards that would ensure that biofuels sold in Europe would have lower greenhouse gas emissions than the petrol or diesel they replace. They proposed voluntary regulation, and stressed that nothing should be done to interfere with market growth.

British Sugar, for example, stated that: “We fully support minimum environmental standards for biofuels in the European Union, but do not think a certificate system is the best method. In introducing these standards, there is always the danger of slowing development in the market.” The Renewable Energy Association (UK), whose members include BP Alternative Fuels, British Sugar and Shell International, said that minimum environmental standards would be “an ill-considered approach, which... will risk undermining future investment in the European biofuels market and could blight existing investment”.

British Sugar, BP, Du Pont and Associated British Foods are partners in two joint ventures to establish multi-million pound biofuel production plants in Norfolk and Hull. The European Investment Bank is finalising its approval for the provision of £120m of project financing for both ventures, at attractive interest rates - the first direct financing provided by the EIB for a biofuel project.

Targets are now being set, and subsidies and loans are being granted, without addressing fundamental sustainability issues. When asked whether the 10% target for switching to bio-fuels would be dropped or adjusted if negative impacts were demonstrated, the European Commission responded that this would not happen, as it would create too much uncertainty for investors. They propose that in future they will look at just two issues to measure sustainability: greenhouse gas balance and impact on high biodiversity values. Excluded from consideration are social impacts such as food security, land conflicts and water and soil degradation. The EC is hiding behind World Trade Organisation market competition rules to avoid including such social criteria.

To meet EU and US biofuel targets means clearing virgin forest and grassland, bush and jungle, in the world’s poorest areas, releasing carbon stored in earth and vegetation that will outweigh any reduction in emissions achieved. The planned large-scale monoculture of palm oil, soya and other crops needs massive inputs of fertilisers, releasing NO2 - a greenhouse gas more potent than CO2. The reality is that the global rush to biofuels will actually increase emissions of greenhouse gases. But as long as it also increases emissions of profit, that’s fine by the European Commission and the new biofuel corporations.

Penny Cole
AWTW environment editor
1 October 2007

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