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Biofuel Expansion

Europe and the United States are taking notice from Brazil as a leader when it comes to sugar cane based ethanol. Increased usage of less-polluting fuels made from energy crops such as sugarcane or oilseed can lessen the reliance on imported oil while reducing greenhouse gas emissions that cause climate change. According to Brazilian President Luiz Inacio Lula da Silva, the global gap between rich and poor nations can be made smaller by developing countries becoming biofuel energy exporters. Silva points to the biofuel boom as it creates opportunity to countries in Africa, Central America and the Caribbean to reduce poverty and global conflict.
President Silva further comments that "Twenty countries (currently) produce energy for approximately 200 countries." The increased adoption of biofuel production by these countries will result in more energy becoming accessible.

Speaking to an international biofuel conference in Brussels, he said that Europe should not hold these countries back with high import tariffs such as those imposed on Brazilian ethanol; similar tariffs are not charged on imported oil and natural gas. Peter Mandelson, a European Union Trade Commissioner stated that Europe should be open to increased importation of biofuel, as it was unlikely the EU could replace 10 percent of transport fuel usage with biofuel by 2020 without additional biofuel import. Swedish Trade Minister Sten Tolgfors has also been reported as calling for an end to ethanol tariffs.

Rapeseed crops are widespread across Europe due to generous government subsidies to help turn it into biofuel. Europe is converting the bright yellow agricultural product into biofuel, which is more polluting than sugarcane-based ethanol. Mandelson continues that European biofuel may not be the best for Europe. European biofuel have a weak carbon performance and do not burn as cleanly as other less expensive, imported biofuel.

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According to Mandelson, any changes would need to be negotiated as part of a wider World Trade Organization deal which is currently stalled but, could also be part of free trade agreements the EU plans to strike with Brazil and other countries. Support for wider imports tends to reduce hopes that a biofuel bonanza could result in European farmers winning additional subsidies. A major drawback to using rapeseed oil for biofuel production is the systematic burning of fields after harvest time. Most Europeans are against such a practice and won't pay a premium for ethanol produced from unsustainable practices or at the expense of other things such as the rainforests.

The EU wants to set sustainability standards to encourage producers to use more durable production methods that would apply to both importers and European producers. The EU should not allow a switch to biofuel to result in environmentally unsustainable production methods, especially when such methods are destructive and or damaging to the earth or the environment.
The EU Energy Commission said only biofuel meeting these standards would be counted toward the 10 percent target and thereby receive government subsidies and tax breaks. The EU aims to work with trade partners to avoid these new rules creating "unnecessary obstacles" that could be considered unfair or trade barriers.

According to the U.N. outlook, annual corn-based ethanol output in the United States may double between 2006 and 2016. In the European Union the amount of oilseeds, mainly rapeseed, used for biofuel is set to grow by 10 million tons to more than 20 million tons during the same time span.
A United Nations report warns that higher commodity prices blamed on increasing demand for biofuel could last through 2010 or longer as more corn, wheat, rapeseed and sugar is turned into fuel. Others dismiss concerns that the biofuel boom would see agricultural land abandon food production in favor of energy cash crops, and that the real problem was poverty caused by agricultural subsidies rich nations pay their own farmers.

 Related:
 Ethanol Futures
 Ethanol Resources
 Ethanol Subsidies
 Ethanol Outlook
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