BIOFUELS: MORE BENEFITS THAN JUST ENERGY

By Supachai Panitchpakdi Reprint | | Print |

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GENEVA, Jul 24 2007 (IPS) - Many economic, social, and environmental goals could be fulfilled by increased production, use, and international trade of biofuels, writes Supachai Panitchpakdi Secretary General of the United Nations Conference on Trade and Development (UNCTAD). The author writes in this analysis that biofuels could slow global warming and provide an opportunity for developing countries to diversify agricultural production, raise rural incomes, and improve the quality of life. They could also enhance energy security, reduce expenditures on imported fossil energy, and foster other technological developments. But it is also important to consider the possible economic and environmental impacts of biofuels, the compatibility of biofuels with existing fuel delivery infrastructures, and competing uses for arable land. For example, the amount and type of primary energy consumed in producing biofuels – and the related emissions of greenhouse gases – vary enormously. And as long as current technology is used, the fast-growing demand for biofuels will mean devoting an increasing amount of arable and pasture land to the production of energy crops, which implications for food security.

While biofuels have thus far displaced around 1 percent of the fossil fuels used in the transport sector, the International Energy Agency estimates that their share could reach 7 percent by 2030. New technologies now under development -and particularly those that use wood materials, such as ligno-cellulosic ethanol- could enable biofuels to play an even bigger role.

Economic, social, and environmental goals could be fulfilled by increased production, use, and international trade of biofuels, provided that this is backed up by the right strategy of resource allocation. Biofuels could slow the process of global warming, for example, and provide an opportunity for developing countries to diversify agricultural production, raise rural incomes, and improve the quality of life. They could also enhance energy security, reduce expenditures on imported fossil energy, and foster other technological developments.

Several developing countries endowed with the land to devote to energy crops production, a favourable climate to grow them, and a relative abundance of labour are already, or are considering becoming, biofuel producers. Before they do so, however, these countries will have to take some crucial decisions and answer some important questions. For example: Is biofuel production intended for transportation fuel security, or for broader energy replacement? What are the land requirements? What is the desirable level of technological sophistication?

These countries will also have to consider the possible economic and environmental impacts of biofuels, the compatibility of biofuels with existing fuel delivery infrastructures, and competing uses for arable land. For example, the amount and type of primary energy consumed in producing biofuels – and the related emissions of greenhouse gases – vary enormously. Powering refineries with coal has a much less beneficial environmental impact than powering them with sugarcane residues.

We also know that as long as current technology is used, the fast-growing demand for biofuels will mean devoting an increasing amount of arable and pasture land to the production of energy crops. This may have implications that require careful assessment, especially for food security. Before embarking on biofuels production, countries also have to identify the support measures needed to get the biofuel industry off the ground and flourishing; the most appropriate investment promotion measures; the type of regulatory framework likely to ensure job creation and rural development; export prospects and possible markets for biofuels; and existing trade flows, tariff regimes, and market access- and entry-related issues affecting international trade in biofuels.

UNCTAD’s BioFuels Initiative is intended to help developing countries answer these questions. For example, an UNCTAD team was recently in Guatemala to help the government formulate a national biofuels programme – one that addresses vital concerns related to food security, water availability, reliable and predictable access to export markets, and improved energy access, especially for rural and isolated communities. Similar country assessments will be undertaken in other regions, and an international expert advisory group has recently been set up to provide guidance on the Initiative.

According to UNCTAD studies (