Subsidies and mandatory blending have created an artificially rapid growth in biofuel production, worsening some negative impacts. Existing policies have had a limited effect in achieving energy security and climate change mitigation and therefore need to be reviewed.


Government incentives and support for biofuels have been largely guided by national or regional interests rather than a more global perspective. There is a need for an appropriate international forum to agree on sustainability criteria to achieve environmental objectives without creating trade barriers.


The overall performance of different biofuels in reducing fossil energy use and greenhouse gas emissions varies widely when considering the entire life cycle from production through transport to use. The net balance depends on the type of feedstock, the production process, and the amount of fossil energy needed.

When forests or grasslands are converted to farmland, be it to produce biofuel feedstocks or to produce other crops displaced by feedstock production, carbon stored in the soil is released into the atmosphere. The effects can be so great that they negate the benefits of biofuels, and lead to a net increase in greenhouse gas emissions when replacing fossil fuels.

When crops for biofuel production require irrigation, it exerts pressure on local water resources. In addition, water quality can be affected by soil erosion and runoff containing fertilizers and pesticides.

Changes in land-use and intensification of agricultural production may harm soils. The impacts depend on the way the land is farmed. Various techniques and the use of certain plant species can reduce adverse impacts or even improve soil quality.

Biofuel production can affect biodiversity. For instance, habitat is lost when natural landscapes are converted into energy-crop plantations or peatlands are drained. In some instances, however, biofuel crops can have a positive impact, for instance when they are used to restore degraded lands.

In order to ensure an environmentally sustainable biofuel production, it is important that good agricultural practices be observed, and measures to ensure sustainability should be applied consistently to all crops. Moreover, national policies will need to recognize the international consequences of biofuel development.

The combustion of fossil fuels increases the concentration of carbon dioxide in the atmosphere. The carbon dioxide and other so-called greenhouse gases allow solar energy to enter the atmosphere but reduce the amount of energy that can re-radiate back into space, trapping energy and causing global warming.

However, some biofuels may reduce greenhouse gas emissions, but net effects on climate change depend on where and from what raw materials they are produced. Carbon emissions from land-use change when forest or pasture is converted to cropland can largely negate the greenhouse gas savings obtained by using biofuels for transport.


Increased biofuels production will be achieved through improved land productivity and through expansion of the cultivated area, using existing cropland as well as less-productive land. However, it is more likely that biofuels will intensify the pressure on the fertile lands where higher returns can be achieved.

Should biofuel production be promoted?

Biofuels are considered to be a way of reducing the emission of greenhouse gases. They can also be looked upon as a way of energy security which stands as an alternative to fossil fuels that are limited in availability. However, one of the greatest problems that are being faced by researchers in the field is how to convert biomass energy into liquid fuel.

Fuel such as methane produced from renewable biological resources such as plant biomass and treated municipal and industrial waste.

Large-scale production of biofuels from crops requires large land areas, so liquid biofuels can only replace fossil fuels to a very limited extent. Current production is equivalent to less than one percent of world transport fuel demand.

Biofuels are accused by the UN and others of pushing up world food prices and exacerbating the effect of the most severe drought in the US in half a century. US legislators called on the environmental protection agency this month to waive its ethanol mandate that stipulates 40% of the American corn crop is turned into biodiesel. The US department of agriculture said the corn yield would be the lowest for 17 years, raising grain prices as it means there will be more demand for wheat to be used as animal feed.

Prices for liquid biofuels and for the crops needed to produce them are partly driven by fossil fuel prices. Government support schemes also play a key role as most biofuels are not generally competitive without subsidies, even when crude oil prices are high.

The crop and energy markets are closely linked, since agriculture both supplies and uses energy. Agricultural crops compete with each other for land and water and farmers will sell their produce to markets regardless of end-use, be it for biofuel production or food use.

When the market value of a biofuel crop is high, prices for other agricultural crops that also need land and water will tend to rise too.

The main drivers of government support for biofuels are concerns about energy security and climate change as well as a political will to support the farm sector.

Agricultural and forestry policies have had a strong influence on the bioenergy industry. Agricultural subsidies and price support affect both production levels and prices of feedstocks for first-generation biofuels. Agricultural policies have also shaped world trade patterns for agricultural products including bioenergy feedstocks.

Food prices generally declined during the 40 years up to 2002, if inflation is taken into account. Since then they have risen sharply, with vegetable oil and cereal prices showing large increases.

These high prices are partly the result of rising demand from developing countries and for biofuel production. There have also been poor harvests in some countries at a time when reserve stocks are at a relatively low level.

Biofuel demand and supply are expected to continue their rapid increase. And although the share of liquid biofuels in the overall transport fuel supply will remain very limited, the projected increase in production of crops for making biofuels is substantial relative to the projected increase in total agricultural production.

Increased biofuel production could come from using more cropland for biofuel production and from improved yields. However, if grasslands or forests are brought into agricultural production for this purpose, this would have environmental consequences.

The biofuels policies in place in the EU and the USA, have distorted national and international agricultural markets. This results in high costs for the taxpayers in developed countries and discrimination against producers in developing countries. As a consequence, production does not necessarily occur at the most economically and environmentally suitable locations or with the most efficient technologies.

Coordination of biofuel policy at international level is needed to correct global agricultural policy failure and improve allocation of resources.

The positive contribution of biofuels towards energy security and greenhouse gas emission reductions is increasingly being challenged. Their unintended impacts on market prices and food-security have frequently been overlooked in policy discussions.

Uncertainties regarding the economic viability of biofuels remain, because of the influence of oil and crop price fluctuations, as well as future policy and technical developments. Biofuels are influenced by a wide range of policies, and a coordinated approach is needed to consider overall benefits and risks.

Replacing fossil fuels with biofuels isn’t the answer. Replacing fossil fuels isn’t even an option — current energy use, especially in the industrialized countries, is not sustainable anyway, whatever the energy source

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