Biofuels or Bust?

25 June 2008 (Last Updated June 25th, 2008 18:30)

Rising costs and agricultural issues suggest that biofuels as they are now could do more harm than good. Mitch Beedie looks at the way governments must regulate the industry and lessen demand before the world hits crisis point.

Biofuels or Bust?

On the face of it, the case for biofuels is overwhelming. As renewable replacements for petrol and diesel, they lock up CO2 in growing plants. When burned, they just return the gas to the air to make the overall process carbon neutral.

Bioethanol comes from crops like maize and wheat, biobutenol from crop by-products like straw and maize stalks, and biodiesel from vegetable oils like palm oil and soya. Second-generation biofuels will even take waste from farm and other surpluses, and digest it with bacteria.

The dash for biofuels rivals the Dash to Gas of the 1990s. The EU wants to see at least 5.75% of road fuel from renewable sources by 2010, and 10% by 2020. The US has similar ambitions, and demand will run to hundreds of billions of litres a year. And there is no shortage of experience.

Sugar cane has been used to produce ethanol to fuel cars in Brazil since the 1920s, with rapid growth in the last 30 years after the oil price rises of the 1970s. Brazil alone could grow another 100 million hectares, with another 400 million in Africa. The promise is that poor countries can reduce their own oil bills and on top gain valuable exports to richer countries.


Unfortunately, many of the benefits of biofuels now seem illusory, with the very scale of operations causing new problems. Subsidies in the US for corn-derived ethanol are over $10bn a year and the EU is investigating evidence of unfair US dumping into Europe. Over 10% of imports have reportedly come from “splash and dash” – exporters shipping biodiesel to the UK, making minor additions, re-exporting it with a $1/gallon subsidy, and gaining EU subsidies when it gets back.

For the rest, much of the land for biofuels is coming from clearing forests and converting agricultural land. That simply wipes out the ‘lifecycle’ benefits of biofuels and is also pushing up food prices globally.

US activities alone are reportedly taking 100,000 million kilograms of cereals a year from the food chain, and biofuels are already estimated by the IMF to be responsible for up to 30% of recent food price rises. Companies involved deny this but, with major oil and gas companies now being involved, they are likely the same people that have been denying that burning fossil fuels contributes to climate change.

“Food production is predicted to rise by about 50% over the next 20 years just to meet global food demand.”

Growing its own biodiesel would take up most of the northern hemisphere’s farmland, so much will have to come from the south. Price pressures can only increase, with food production predicted to rise by about 50% over the next 20 years just to meet global food demand. That will harm the developing countries most – the very people who are supposed to gain. Many more are now reported to be displaced from their lands to make way for biofuels.

Even second-generation biofuels will not necessarily help. Crops like switchgrass and willow can be grown on marginal land, but that is now only small scale. Even they will need careful siting (willow is a thirsty tree, for example), and will reduce biodiversity if grown on huge plantations. The output will also be competing against other uses for the raw materials, particularly CHP, which would make even more efficient use of them.

For biofuels to bring the benefits the lifecycle calculations have promised, they can’t just replace forests and crops. Agricultural land in the world is limited, and nitrous-oxide-forming fertilisers from large-scale farming are themselves a major contributor to global warming.


Biofuels themselves can not be blamed for this situation; it is the way they are being produced that is the problem. Short-term profit for one section of the community (multinational companies and car owners) is bringing higher real costs for the rest of society. Instead, as we learned from American professor and statistician W Edwards Deming, to make quality improvements we have to optimise the system as a whole.

That means legal requirements to ensure crop production is sustainable. Subsidies need to move away from large-scale agriculture and multinational businesses (which we are told are so efficient that they don’t need them), towards small farms and local businesses that have a stake in their communities. We should be aiming at making individual communities self-sufficient, using local labour and keeping profits within the community.

“We should be aiming at making individual communities self-sufficient, using local labour and keeping profits within the community.”

We need to live in smaller, more energy-efficient houses and drive smaller, more energy-efficient cars. We need shops sited closer to homes, with a huge increase in public transport. We need to halt ‘urban sprawl’, and actually use new technology to reduce the need for international travel.

We need to grow as much food as possible locall. And we need to stop burning oil and gas to generate electricity, instead feeding power from the different renewable sources into a continent-wide grid. There is, in all honesty, little that individuals can do to help – all these are decisions that have to be taken at government level.

With the current approach, biofuels will not help to reduce demand for fossil fuels, they will just help us to continue increasing car usage, and waste. Reducing demand must be the first line of global attack.

The West can’t drive everywhere and then demand that people in India and China “get on their bikes”. We need to reduce unnecessary journeys and reduce energy waste.

Unfortunately, there are no (short-term) profits in reducing demand.