NYT: Food vs Fuel; Sustainability are issues affecting biofuels production

Posted by Jeff Pieterick, President, Wisconsin Biodiesel Association

"The growth of biodiesel, which can be mixed with regular diesel, has been controversial, not only because it competes with food uses of oil but also because of environmental concerns. European conservation groups have been warning that tropical forests are being leveled to make way for oil palm plantations, destroying habitat for orangutans and Sumatran rhinoceroses while also releasing greenhouse gases."

In the first of a series of articles published exploring The FoodChain, the New York Times presented an article on Saturday titled "New, Global Oil Quandary: Costly Fuel Means Costly Calories". The controversies it illuminates relative to the impact of worldwide biofuels production are substantial and worthy of consideration.

The concerns expressed about biofuels production fall within two categories:

1. Food versus Fuel: Ethanol and biodiesel production presently rely primarily upon corn and edible oils (respectively) for their feedstock. Meanwhile, worldwide demand for these food commodities is growing at an incredible rate, particularly in developing economies such as in China and India. In competing with the food industry for these commodities, the biofuels industry is therefore contributing to higher food prices with potentially drastic consequences as explained in the NYT article.


2. Sustainability: In developing countries such as Malaysia, the Phillipines, and many South American and African nations, rain forests are being cleared to establish palm and jatropha plantations in an effort to meet the rising demand for oils to be used both by the food industry and for biofuels production. The primary justification for the pursuit of biofuels is to achieve a carbon-neutral alternative to fossil fuels. Yet, the net carbon-benefit of these fuels is greatly compromised if rain forests - which serve as highly efficient carbon sinks - are sacrificed to create acreage for oil production.

The first proponents and most diligent advocates for biofuels were the farmers and other ag interests in the US and Europe who saw this as the means to create a market for their surplus products. Corn and edible oils, which are a co-product of soybean (US) and rapeseed (Europe) processing that creates meal for animal feed and for human consumption, were historically undervalued as surplus commodities looking for a market. As the biofuels industry began to gain traction, the projected demand for these oils and corn quickly outstripped supply. The commodity traders now price these oils at nearly triple the value at which they were traded as recently as 2006, and corn itself commands near-record high prices even as yields greatly increase.

Value added ag? You bet! But as the NYT article shows, the dramatic swing to the plus side in the value of these commodities is not without its downside for food consumers throughout the world. There is considerable pushback, therefore, to the supposed benefit of supporting any greater growth of the biofuels industry solely on the basis of providing increased "value-added" support for our ag producers.

The biofuels industry instead needs to continue research and development of alternative feedstocks that will not compete directly with our food supply. In addition, effort is required to assure that these feedstocks are produced in a way that does not in itself contribute to global climate change. The European Union is considering taking steps to limit the import of biofuels that are compromised in the carbon efficiency of their production. Such steps serve notice to the biofuels industry of the need to take all steps necessary in maximizing the benefit of harvesting renewable energy for a sustainable future for us all.