The report is, at best, unbalanced. It has a clear bias against the production and use of biofuels. It seems that in its reasoning, assumptions and premises based on conjectures, speculations, widespread generalizations, fallacies and weak inferences are taken as correct in order to justify patronizing preconceptions and a predefined set of conclusions. In this sense, alleged negative impacts of biofuels are, as a rule, overestimated and generalized. On the other hand, evidences supporting the benefits of biofuels are promptly discarded or, in most cases, simply not taken into consideration. The report ignores that sustainable biofuels contributes to the promotion of food security, generating income and employment in rural areas, especially from developing countries in the tropical zone, stimulating increased productivity in agriculture as a whole, reducing the weight of oil and its derivatives in the costs of agricultural production, and finally, contributing to fight climate change, a phenomenon that can have disastrous consequences on world agricultural production.
Draft Policy Recommendations
Policy recommendations made in this section must be revised according to the comments and points brought to attention in the other sections of the document.
Considering the weaknesses of the evidences in which this conclusion is based, the assertion of the central role of biofuels in provoking high and volatile food prices is highly questionable. It is worth noting the significant correlation between oil prices and the international commodity market. In developed countries, oil and its derivatives account for about 27% of the cost of agricultural production. This number can reach 46% in the case of developing countries. Moreover, the great historical correlation between price volatility in these two markets - the peak of food prices over the past 4 decades coincides with the oil shocks - reinforces the argument that the use of biofuels contributes to the promotion of food security, once, as a substitute, it press down the price of oil and its derivatives.
Chapter 1: Biofuels Policies
In section 1.2, the report fails to take notice that neither Brazil (as a non-Annex I country) nor the US (as it did not ratify the Protocol) are bound by the commitments of Annex I Parties under the Kyoto Protocol. Nonetheless, biofuels have an important role in meeting Brazil’s voluntary GHG emission reduction goals.
In the second paragraph of section 1.3 (New Dynamics to Biofuels in US and Brazil), a superficial value judgment is made on the justification of the biodiesel program in Brazil. There is not any reference to the rapid development of the biodiesel industry in Brazil, which in less than a decade became one of the top producers in the world, without impacting food production in the country. The study also fails to consider that oil accounts for just 20% of soy content, the remaining part consists, basically, of soybean meal, which is used for food and feed. In this sense, expanding soy production for biofuels increases food production in a 4 to 1 ratio.
The report also belittles the Social Fuel Seal initiative of the Brazilian Government. The Social Fuel Seal allows biodiesel producers who acquire a percentage of their feedstock from smallholders to receive certain fiscal incentives and to sell their biodiesel in national auctions to meet the blending requirement. In order to acquire the Social Fuel Seal, producers are required to fulfill three primary obligations: (i) procure a portion of their overall feedstock from smallholders, with the exact percentage required dependant upon the producer's regional location; (ii) negotiate and sign contracts with the family farmers providing their feedstock or an organization representing them; and (iii) include in the contracts the price of the feedstock as well as provision of technical assistance to the families. It is worth noting that 80% of the biodiesel consumed in Brazil comes from production units carrying the Social Fuel Seal.
No explanation is given to the assertion that 26% of the world’s total cropland would be required to supply a 10% blending mandate (Section 1.4). This number is clearly overestimated. According to the International Energy Agency, biofuels account for around 3% of road transports globally (IEA, Tracking Clean Energy Progress, 2012). At the same time, biofuels occupy less than 1% of total agricultural land. And even from the 30 million ha currently being used, a considerable amount of co-products are produced, such as cattle feed, or bio-electricity and heat (IEA, Future Biomass-based Transport Fuels, 2012). Productivity gains are also not taken into consideration. As an example, it is estimated that technologies for processing lignocellulosic biomass, such as sugarcane straw and bagasse, will be able to increase ethanol production in Brazil in up to 40%, without any land expansion (EMBRAPA, Circular Técnica 04, 2011).
In section 1.4.5, it should be mentioned that all forms of cooperation promoted by Brazil have a strong emphasis on social, economic and environmental sustainability. It is also worth noting that Brazil is sponsoring feasibility studies for the sustainable production and use of bioenergy in several countries in Africa, Central America and the Caribbean.
In section 1.4.6, it should be mentioned that Brazil has over 170 million hectares of pasture land allocated for livestock production, with an average density of just one head per hectare. Studies show that this very low average can be increased to up to 5 heads per hectare. The current process of intensification of cattle production is releasing several millions of hectares for agriculture, including biofuels production, without competition for new land or displacement of other crops. With only 1% of its arable land dedicated to sugarcane for ethanol production (4.6 million hectares), Brazil has been able to replace half of its gasoline demand, while still producing enough surplus to be the world's second largest exporter. In addition, to guide the sustainable expansion of the sugarcane production in the country, the Brazilian Government developed the Sugarcane Agroecological Zoning. This initiative, through a thorough study taking into account environmental, economic and social aspects, identified a total of 64.7 million hectares of feasible areas for sustainable sugarcane expansion (less than 8% of the Brazilian territory), excluding the most sensitive biomes, such as the Amazon and Pantanal.
Section 1.5 (“Land-Use Change” provokes Changes in EU targets and influences US Policy) besides making it clear that in October 2012 a new *proposal* to update the EU Directive on biofuels was presented and not issued (as stated in the text), this section should also draw attention to critiques on the proposed update to the EU biofuel policy. For instance, by limiting the use of food-based biofuels to 5%, the EU may block its market from more efficient biofuels, which can reduce up to 90% of GHG emissions. In addition, considering that second generation biofuels are not available in a commercial scale, this policy may lead to greater consumption of fossil fuels, increasing the European carbon footprint. The 5% cap on biofuels based on food crops may also hinder certification schemes, as there will not be an export market to compensate for the costs of compliance with the certification requirements.
Another issue is related to the requirement to report ILUC emissions based on predefined values. It is well established that ILUC may vary according to several factors, such as production practices, the technology employed, soil condition, original biodiversity, among others. More importantly, it can be prevented by adopting sound sustainability guidelines and policies, which, of course, increase the cost of production. However, by adopting a predefined ILUC factor for each crop group, no incentive is given for sustainably produced biofuels.
Chapter 2: Biofuels and the Technology Frontier
Given the large amount of available raw materials and the logistic infrastructure already in place, it is presumed that large scale production of second generation biofuels will be firstly based on sugarcane bagasse and straw. In this sense, it is important to highlight that second generation biofuels will complement the production of traditional biofuels, by improving the productivity, and not replace them.
On page 18, the phrasing has an unnecessary negative tone when mentioning the emission reductions from biofuels (“a goal allegedly pursued by the production of biofuels”). In Brazil, in 2003 alone, the emission of 27.5 million tons carbon dioxide in the atmosphere was prevented due to the gasoline replacement by ethanol (Goldemberg; Coelho; Guardabassi, 2008). Considering that Brazilian sugarcane ethanol share in world biofuels production is close to 20% (REN21, 2012) and that, according to table 2 of the report (page 18), emission reductions from sugarcane ethanol may be as high as 105%, it is hard to dismiss that biofuels have a considerable potential for reducing GHG emissions.
In Brazil, from 1975 to 2009, the use of ethanol to replace gasoline generated savings of over a billion barrels of oil equivalent, avoiding the emission of 800 million tons of CO². According to assessments based on life cycle analysis (LCA), Brazilian sugarcane ethanol reduces emissions of greenhouse gases by more than 80% in substitute for gasoline. It is estimated that 100 million tons of sugarcane avoid 12.6 million tons of CO2-eq, deriving from ethanol, bagasse and bioelectricity generated.
It is important to highlight that the data from table 2 of the report clearly indicates that second generation biofuels do not necessarily have more substantial greenhouse gas savings than conventional biofuels.
Chapter 3: Biofuels, Food Prices, Hunger & Poverty
In the first paragraph it is not mentioned that several studies were more cautious about the estimated impact of biofuels on crop prices, placing more weight on macroeconomic factors, such as exchange rates, grain storage policies and market speculation (GEA, 2012). The lack of references of opposite views may indicate that either the report has failed to do a thorough analysis of the available literature or that it has been opted to consider only negative views.
According to a study from FAO (Global food losses and food waste, 2011), roughly one-third of food produced for human consumption is lost or wasted globally. A recent report suggests that as much as half of all the food produced in the world – equivalent to 2 billion tonnes – ends up as waste every year (Global Food Waste Not Want Not, 2013). Considering this figures as well as the fact that biofuels occupy less than 1% of total agricultural land, it is reasonable to assume that the alleged competition between food and fuel is grossly exaggerated and neomalthusian. Furthermore, the report fails to comment on other externalities, such as the European Union’s Common Agricultural Policy (CAP), which has serious implications for the longer-term prospects for the development of a food and agricultural sector in Africa capable of lifting the majority of the rural poor out of poverty.
The calculation on the estimated crop energy that will be required by biofuels in 2020 does not seem to take into account the expected increases in productivity, as well as the availability of expressive amounts of land for the sustainable expansion of biofuel production. According to FAO (2006), higher yields and increased cropping intensity are expected to contribute with 90% of the crop production growth by 2050. To meet the expected biofuel demand in 2050, a report from the International Energy Agency (2012) estimates that 100 million hectares of arable land will be required, an area equivalent to 2% of the total agricultural land today. This means that land use will increase three-fold, whereas biofuel production will grow 10 times in the next 40 years.
In section 3.2, it is stated that “our analysis indicates that biofuels have played a predominant role in the increases in food prices and volatility since 2004”. The reasoning presented to support this statement is noticeably flawed, as no assessment is made of the level of impact of any other possible factors and externalities that may have had a role in increases in food prices. Without any kind of measure indication, the aforementioned statement can be dismissed as a mere speculation. Besides, it is not mentioned that different biofuels may have different impacts. By not considering these points, any conclusion will be mostly based on assumptions and in clear generalization.
In the assumption that maize ethanol producers have bid up the price of ethanol, no comment is made on the apparent lack of a substitution effect in biofuel demand, considering the availability of sugarcane ethanol.
In section 3.3.1, it is mentioned that “some world average crop part of the price increase has been overestimated by focusing on dollars”. However, no indication is made on how much it has been overestimated.
In section 3.4, shallow and oversimplified explanations are given to dismiss all alternative explanations for the rise in agricultural commodity prices as inadequate. Nonetheless, some contradictions appear when it is recognized that “some of these models may turn out to be accurate predictors of long-term consequences for biofuels”. If they may prove to be accurate, then it would be unreasonable to dismiss them as “inadequate”.
Several explanations are based on assumptions, without indication of the grounds in which these assumptions are believed to be correct. Example: “In fact, much of the rising costs of production came in the form of non-fuel input costs, which were probably driven by rising demand than by rising energy causes” (page 34).
In section 3.4.3, the reasoning for minimizing the impact of speculation seems to not take into account that crop production is not constant. Therefore, for speculators to drive up the prices of stocks, not necessarily will there be an overall increase in stock volumes.
In the previous section (3.4.2), economic models are considerate inadequate, however accurate over the long-term, because they have little to say about short-term increases (Page34). By recognizing that “speculation may very well be increasing volatility in the short term” (page 35), it seems incongruent to pinpoint biofuels as the main reason for price rises.
A recent study from the Institute of Economic Affairs, in Britain, shows that by abolishing direct EU subsidies to farmers the level of food production would increase and prices would be driven down. The EU is currently spending €55 billion on the Common Agricultural Policy (CAP). This budget is planned to increase to €63 billion by 2020. Nonetheless, in the present report no reference is made to the impacts of increasing agriculture subsidies in developed countries. It is also not considered that high crop prices in the short-term may act as a driver for increased crop production.
The summary explanation of recent price rises is an example of non sequitur logic. It is pointed that the rise in prices largely reflects the difficulty that supply has had in keeping with demand. Considering that no data is provided on changes on land area dedicated for food production, it can only be speculated that biofuels may have increased the scope and rate of the rise in demand, much less inferred that biofuels played a predominant role in driving up prices. Considering that Brazil is the second largest ethanol producer in the world and that displacement of food crops by sugarcane in that country is dismissed as a myth without real background (IEA 2012), any allegation about the role of biofuels, without distinction, in driving up food prices will be exaggerated.
Section 3.5 (Future biofuel demand and price effects) does not consider the possibility of sustainable expansion of land area dedicated from biofuels production (sugarcane for ethanol production in Brazil can expand over 10 times its current cultivated area) as well as substantive productivity gains (studies indicate that lignocellulosic ethanol from sugarcane bagasse and straw will increase production in up to 40%; new, more productive, sugarcane varieties are being developed as well).
Ethanol exports to Brazil over the last couple of years are mostly due to the impacts of weather conditions on the sugarcane production and are not a reflection of a limited capacity of Brazil to produce ethanol both for its own market and the U.S.
Chapter 4: Biofuels and Land
In section 4.1.1, by assuming that world cropland expansion of 69 million hectares by 2050 will be “hard to achieve”, the report fails to consider the availability of idle land, the possibility of conversion of large amounts of low intensity pasture land to crop production, as well as the adoption of integrated crop-livestock farming systems. In Brazil alone, the reduction of lands dedicated to extensive cattle grazing, due to an ongoing process of intensification of cattle production, may release close to 100 million hectares of pastures for other uses (assuming that only half of the possible increase in the average number of cattle heads per hectare is reached). Implying that the conversion from grazing would sacrifice soil carbon seems to dismiss the possibility of adoption of adequate soil management practices. In this sense, statements concerning “substation environmental losses” can be dismissed as speculation.
The last paragraph of page 39 is based on a neo-Malthusian argument of competition for land between food, feed, timber in the world, which is simply incorrect. Only 11% of the dry surface of the world’s land is used for agriculture, and only 1% of this area is currently dedicated to the cultivation of feedstock for biofuels. In Brazil, whose territory totals 851 Mha², the agricultural lands occupy about 70 Mha². Of the total cultivated land, sugarcane culture occupies about 9 Mha², of which about 5.1 Mha² (57%) are currently used to produce ethanol, which represents only about 8% of the total cultivated area of the country, and just over 1% of arable land. Besides, the expansion of biofuel production in recent years has been done judiciously in Brazil, with the use of policies such as agroecological zoning. Moreover, between 2004 and 2009, Brazil increased by more than 15% its grain cultivation, while that ethanol production has doubled (according to the Ministry of Agriculture, Livestock and Supply, since 1991 the productivity of Brazilian agriculture grew at a 5.4% rate per year), with a 7% increase in agricultural land. The biggest challenge in addressing the structural causes of food insecurity is therefore access to food and not the failure of food production derived from land competition.
The section dedicated to ILUC draws flawed conclusions. There is no scientific consensus on how to define and calculate ILUC. In addition, ILUC may vary according to several factors, such as production practices, the technology employed, soil condition, original biodiversity, among others. More importantly, it can be prevented or mitigated by adopting sound sustainability guidelines and policies. Sustainability assessment should be based strictly on the biofuel production chain being analyzed, limited to the direct effects of its production.
Section 4.1.2 (Bioenergy) tries to imply that bioenergy is inefficient. However, it does not seem to consider the large amount of already available biomass from agricultural residues.
The conclusion that “any effort to produce meaningful quantities of bioenergy would result in large-scale competition with the use of land for other human needs of carbon storage” is a speculation based on false premises. According to REN21 (2012), bioenergy, including biomass and biofuels, accounts for over 10% of global primary energy supply and is the world’s largest source of renewable energy. In Brazil, bioenergy accounts for more than 25% of the national energy mix.
The broad and patronizing statement that “food insecurity for the local community is often the principal result of large-scale biofuels land deals” is not backed by any data.
The final section (4.2.4) seems to contain a contradiction. Despite all the statements implying that biofuels impacts are greater in developing countries, it is recognized that biofuels promotion can be beneficial to rural development and energy security.
Chapter 5: Social Implications Of Biofuels
Section 5.2 states that “The women lost a portion of their income derived from collecting forest products, and also lost the raw materials from which they made handicrafts for sale.” However, collecting forest products and traditional biomass for cooking can be extremely harmful from the environmental, social and economic perspectives.
Traditional cooking fuels (mainly wood, charcoal and dung) are still used by 2.5 billion people around the world and compound as much as 90% of household energy consumption in least developed countries. Their incomplete burning releases large amounts of pollutants in close environments, increasing risks of respiratory diseases by one third and causing 1.6 million deaths annually, 50% of which of children under the age of five.
In addition to health effects, their way-of-production causes environmental, social and economic impact. Extensive areas are still deforested every year for charcoal and wood-fire production in vast regions. Women - traditionally responsible for obtaining fuel – are taken away from home for long periods, increasing the exposure of children to accidents, violence and abuse and taking much valuable household time and effort to fuel collection instead of education or income generation, jeopardizing social and economic development. On top of this, they provide slow-speed, inefficient cooking and both their production and consumption emits considerable amounts of greenhouse gases (GHG). According to the Global Alliance for Clean Cookstoves, more than 2 million people die every year due to the consequences of indoor air pollution, with women and children suffering the vast majority of this burden.
Modern bioenergy (such as biofuels), however, present very positive socioeconomic effects, including for women. Regarding the socioeconomic impacts of this sector, the most significant is precisely the creation of employment and income for a large portion of the population with different educational levels, which permits more energy and food access and security. For instance, in Brazil, sustainable sugarcane production enables significant improvements in the socioeconomic region in which it operates. In this sense, the importance of the jobs generated by the sugarcane sector in Brazil can be highlighted by the following indicators: (i) sugarcane cultivation employs large number of formal workers (81%), a much higher rate in comparison with the average rate in the agricultural sector (40%); (ii) inclusion of workforce with low skills (approximately 24% is illiterate); (iii) one quarter of national production comes from 70 thousand independent producers of sugarcane; (iv) 50% of the harvest is mechanized in the country; (v) the 440 plants employ about 600,000 workers, and; (vi) reduction of child labor (child labor corresponded to 0.3% in 2009). The sector as a whole, is responsible for 1.2 million direct jobs and moves $ 48 billion (equivalent to 2% of the GDP).
Besides the obvious relationship between energy security and food security, the co-generation of electricity and the replacement of imported oil for the biofuel produced locally provide significant savings in foreign exchange, which can be directed to the import of capital goods essential for investment in productive sectors and in benefits for the population. The Brazilian experience serves to illustrate these benefits. It is estimated that between 1975 and 2005, the replacement of gasoline by ethanol amounted to savings of US$ 60.7 billion.
In section 5.3, certification is discussed. It is important to mention that certification schemes are increasingly complex and expensive, which may create niche market places that hinder independent and small producers from the market. In Brazil, for instance, producers adopt alternative sustainability instruments, such as the soy moratorium, which since 2006 (renewed in 2014) restricts the production of oilseeds in the Amazon using satellite monitoring.
Besides, GBEP’s work is not properly presented in this section. It is not, as the authors would have us believe, a certification process, but its 24 indicators on sustainability present criteria for environmental, social and economic production and use of bioenergy, helping the transition away from the unsustainable, traditional ways of deriving energy from biomass and towards the sustainable production and use of modern bioenergy. The report “GBEP Sustainability Indicators for Bioenergy”, finalized in December 2011, was developed to provide relevant, practical, science-based, voluntary sustainability indicators to guide any analysis of bioenergy undertaken at the domestic level and to be used with a view to informing decision making and facilitating the sustainable development of bioenergy, in contrast to sustainability schemes designed for application at the project or economic operator level (certification). It is the only initiative seeking to build consensus among a broad range of national governments and international institutions on the sustainability of bioenergy.
GBEP set of 24 sustainability indicators and its methodology sheets include supporting information relating to the relevance, practicality and scientific basis of each indicator, including suggested approaches for their measurement:
GBEP’s work on sustainability indicators was developed under the following three pillars, noting interlinkages between them:
Greenhouse gas emissions, Productive capacity of the land and ecosystems, Air quality, Water availability, use efficiency and quality, Biological diversity, Land-use change, including indirect effects.
Price and supply of a national food basket, Access to land, water and other natural resources, Labour conditions, Rural and social development, Access to energy, Human health and safety.
Resource availability and use efficiencies in bioenergy production, conversion, distribution and end-use, Economic development, Economic viability and competitiveness of bioenergy, Access to technology and technological capabilities, Energy security/Diversification of sources and supply, Energy security/Infrastructure and logistics for distribution and use.
Therefore, we can see that the social indicators of GBEP are not all correctly cited by the CFS Report (page 52). It also states that “Willingness to reach agreement was also reached with relation to the following points although further discussion is still required: - Food security, - Labor conditions, - Access to land, water and other natural resources, - Household income” (page 52). As we can see in GBEP Charter above, indicator 10 covers food security, indicators 16 and 21 cover labor conditions, indicators 5, 6 and 8 cover access to land, water and other natural resources and indicator 11 covers household income.
There is incorrect data about Brazil on the table beginning on page 61. Officially Brazil adopts B5, so on the “mandate column”, “B% (biodiesel)”, there should be eliminated the expression “under discussion B7 (2013), B10 (2014), B20 (2020)”. On the ethanol blend E% (ethanol)” the correct range is E18-E25. On the column “biofuels mandatory target”, the biodiesel and ethanol volume columns are misplaced and should be interchanged. Besides, the correct data for ethanol target is 8,3 million m3 (2011), considering only anhydrous ethanol is mandatory (there is no mandate for hydrated ethanol production and use).
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Related links and resources:
Biofuels and Food Security - A consultation by the HLPE to set the track of its study
Committee on World Food Security (CFS)
High Level Panel of Experts (HLPE)
The High Level Panel of Experts on Food Security and Nutrition (HLPE) Key Elements