Policy recommendations

  • The European Union must ensure that its Energy Policy will not harm the food security of the urban and rural poor in developing countries, whose daily survival is threatened by substantially higher food prices. It should draw up a strategy to ensure the urban and rural poor are compensated for higher food prices before installing mandatory levels of biofuels;
  • The European Union should abolish its domestic subsidies and import tariffs for biofuels, in order to allow developing countries to profit from the trade opportunities biofuels offer;
  • The European Union should draw up comprehensive sustainability criteria for biofuels, including more ambitious standards for greenhouse-gas reduction a slight decrease of emissions as compared to fossil fuels is simply not enough and the protection of biodiversity and carbon-rich ecosystems;
  • The European Commission should include social criteria in its review of the Biofuels Directive to guarantee that the rural populations who live off marginal lands and forests are not hurt by expanding agricultural production;
  • The European Union should stimulate local processing and the use of sustainable biofuels in developing countries. Small-scale farmer cooperatives should be stimulated to prevent the benefits from biofuel production from only falling into the hands of large-plantation owners.

Case: Biofuels

08-04-2008 Written question MEP Karim: biofuels and developing countries

08 April 2008

In a written question to the Commission MEP Sajjad Karim (PPE-DE) urges the Commission to take into account that a growing demand for biofuels is likely to result in a rise in prices of agricultural products, thus having a detrimental impact on developing countries. 

Biofuels are hailed by some as the solution to the dual problem of climate change and poverty, while others fear mass starvation and ecological disaster. Biofuels could represent an agricultural renaissance for Africa and supply modern energy to third-world populations, but could on the other hand create enormous  problems in developing countries. The Commission’s resolution to strive for 10% of all energy produced in the EU to be from renewable resources, like biofuels, severely endangers developing countries’ food security. Land used for growing staple crops is increasingly used to grow crops that serve as a basis for agro fuels.

Fair Politics EU shares MEP Karim’s concerns: soaring food prices caused by the sudden rush to biofuels represent a profound tragedy for the urban and rural poor. Competition between food and energy will inflate basic food prices anywhere between 20 and 50 per cent in the next ten years, according to estimates by the FAO and the OECD [i]. Fair Politics EU urges the EU to ensure that its Energy Policy will not harm food security. The EU should draw up a strategy to ensure the urban and rural poor are compensated for higher food prices before installing mandatory levels of biofuels.

Furthermore MEP Karim tackles some indirect impacts from the expansion of biofuels markets. He would like the Commission to take the following into account: the risk of displacement of more vulnerable communities and agricultural activities due to the rise in the value of land; the increasing use of rapeseed oil for biodiesel in Europe pushing up palm oil prices, thus incentivising investment in new plantations, often at the expense of rainforests; and the growing global demand for biofuels pushing up the price of soya which correlates with the rate of Amazon deforestation.

Fair Politics EU stresses that the efforts of the European Union to secure its energy supply, while subsidizing its agriculture, should not go at the expense of its environmental and development objectives. Collective efforts at poverty eradication risk being squandered by a reckless global drive to biofuels. Biofuels do offer a chance to developing countries who could make use of their climate advantages [ii]. However, the opportunities for local use of biofuels and possible negative social and environmental consequences of the conversion of food for fuel should be monitored carefully. 

Full question of Mr. Sajjad Karim can be read below

WRITTEN QUESTION E-O854/08
by Sajjad Karim (PPE-DE)
to the Commission
Subject: Biofuels and developing countries
Date: 12 February 2008

In 2005, biofuels were used in 17 of the 21 Member States for which data were available. The Commission indicates a significant increase in market share, reaching 1% on average (it has doubled in two years). Nonetheless, this figure is below the reference of 2% as fixed in Directive 2003/30/EC [1] on the promotion of the use of biofuels or other renewable fuels for transport. In addition, the advances have been very varied: only Germany (3.8%) and Sweden (2.2%) achieved the reference value. While biodiesel achieved a share of about 1.6% of the diesel market, ethanol achieved a share of only 0.4% of the petrol market.

On the basis of different projections, the Commission considers it unlikely that Member States will achieve the 5.75% target set by the Biofuels Directive for 2010. In its Renewable and Biofuels Progress Report, the Commission proposed to set a mandatory target for biofuels of 10% of vehicle fuel by 2010 for the EU as a whole. 

Developing countries are heavily affected by global biofuels policies, both as potential producers (for their own use or export) and as consumers of crops displaced by biofuels and of energy.

In Its Accompanying Document to the Biofuels Progress Report, the Commission states that in terms of development benefits, for countries which have appropriate natural resources, and develop efficient supply chains, the expansion of biofuels markets opens new opportunities in terms of economic and social development in the generally poorer rural areas. Does the Commission take into account that growing demand for biofuels will likely lead to a rise in prices of agricultural products, thus having a detrimental impact on the poorer population?

Has the Commission considered the risk of displacement of more vulnerable communities due to the rise in the value of land?

Has the Commission taken into account the following indirect impacts:

1.         displacement of other agricultural activities, including subsistence farming and cattle ranching into old growth forests as plantations are expanded,

2.         the increasing use of rapeseed oil for biodiesel in Europe pushing up palm oil prices, as palm oil fills the gap in food and chemical markets, thus incentivising investment in new plantations, often at the expense of rainforests,

3.         the growing global demand for biofuels pushing up the price of soya which, according to NASA, correlates with the rate of Amazon deforestation?

So far the Commission has not replied yet

 

More information?

Visit the website of the European Parliament

Visit the website of MEP Sajjad Karim

Notes

[1]    OJ L 123, 17.5.2003, p. 42.

[i] OECD/FAO, Agricultural Outlook, 2007-2016 (2007).

[ii] EU strategy for biofuels, COM 34 sets out that “both domestic producers and importers should benefit from a growing EU market for biofuels”.