A new report developed by Dutch consultancy Ecofys and published by ePURE has explored the role of biofuels and other driving forces behind the 2006-2008 food crisis and the 2011 commodity price spike.
The main findings show that biofuels have a definitely small role in driving-up food prices, which are far more influenced by other factors particularly at local level, such as limited reserves, food waste, financial speculation, and logistic costs.
The report states that the historic impact of EU biofuels demand until 2010 increased world grain prices by about 1-2% and in absence of a cap on food crops-based biofuels, only and additional 1% increase by 2020 should be expected. On the other hand EU biodiesel demand for the same period likely had a bigger impact on oilseed prices, around 4%, and may increase future prices up to 10% by 2020.
For starch-based crops (i.e. wheat and maize) the main market driver is the demand for animal feed and human consumption while biofuel demand accounts for less than 5%. However in 2010 the global crop production was enough to feed 12 billion people. The report also argues that the prices of agricultural commodities are strongly linked to the oil price and not directly correlated to food prices.
“This study reveals the limited impact that biofuels production had on food prices and recognizes the importance that co‐products have on managing land use pressure. The study recommends looking closer at systemic factors, which in the past have been ignored in important scientific reports on biofuels”, says the author Carlo Hamelinck, the author of the report.
“The study is a serious response to all the misunderstandings and confusions created around our industry and food prices. Renewable ethanol is not causing food price increases and capping production of biofuels will not address food security and hunger in the world. Multiple factors contribute to food prices and policy makers should distinguish between all the benefits that our industry provides to Europe, and the real causes of hunger in the world”, commented Rob Vierhout, Secretary General of ePURE.
Read the full report
