Re: HLPE consultation on the V0 draft of the Report: Biofuels and Food Security

Ministry of Mines and Energy , Brazil
FSN Forum

1.            From the very beginning of the document, on its Executive Summary, the presented premises reveal the whole document bias against the production and use of bioenergy, specifically biofuels.

2.            In order to produce a bigger impact on readers, numbers are put without a clear context and disconnected with actual figures. The presented impacts of the production of biofuels in order to reach a theoretical 10% of global transportation fuels are clearly overestimated. Moreover, it is not considered the enormous potential of the already available biomass from agricultural residues.

3.            Part of the overestimation comes from the hypothesis of converting the nowadays crops into biofuels which is virtually impossible and counter efficient. So, to say that “If 10% of all transport fuels, to date, were to be achieved through biofuels, this would absorb 26% of all crop production” means nothing. The hypothetical production of biofuels to attend 10% of transportation fuels must come from energy crops. So, all impacts must be evaluated from this perspective. Moreover, biofuels’ production implies necessarily the production of food, feed and fiber.

4.            The global consumption of light distillates[1] in 2011 was 1,638,832,073 m³. Considering that 10% of this volume would be supplied by biofuels, then the ethanol volume demanded would be of 241,975,205 m³. If we consider that this volume can be produced by current technologies (1st generation ethanol), then the amount of land required would be of 32 million hectares[2].

5.            Using the same line of thought, middle distillates consumption[3] in 2011 was 1.865.837.179 m³. Considering that 10% of this volume would be supplied by biofuels, then the biodiesel volume demanded would be of 186,583,718 m³. If we consider that this volume can be produced by current technologies (1st generation biodiesel), then the amount of land required would be of 37 million hectares[4].

6.            Thus, considering biofuels’ production capable of displacing 10% of total light and middle distillates consumed today it would require less than 70 million hectares[5]. This area corresponds to 2.2% of total potential area for agriculture[6]; or 5% of total agricultural area in 2011[7]; or 10% of total harvested area in 2011[8].

7.            In order to produce a bigger impact, all land needs to produce biofuels are mentioned in relation to a particular concept of “vegetated land” that was not predefined and, also, has no means to the assessment proposed. All other kind of categorization of land mentioned above (potential area for agriculture; total agricultural area; and harvested area) are better to understand and are clearer.

Final Remarks

8.            There is neither economic growth nor social development without energy supply. Likewise, environmental conservation is impossible without adequate energy resources. Biofuels represent today a major opportunity for investments for developing poor countries. Besides its high economic potential, they also bring undeniable social and environmental benefits through its production and use. Brazil has been promoting the dissemination of its public policies, which managed to introduce biofuels in its energy matrix, now an irrefutable reference for the world. Many international cooperation agreements come as proof of its expertise. The dissemination of use and production techniques includes easy access to technologies and elimination of trade barriers, which may highly contribute to turn biofuels into energy commodities.

9.            After the two petroleum crisis, in the 70´s, the whole concept of “energy security” gets re-shaped. Energy security starts to consist, essentially, in having a continuous energy supply, big enough to cover the demands of a particular country at reasonable prices. Prices a society could afford without damaging its own economy. This concept implies controlling energy supply sources, not necessarily its actual possession, knowledge of the demand and supply evolution, and the diversification of energy sources.

10.          While the world seeks energy alternatives capable of promoting the economic growth without worsening climate change, we face a worldwide boom in oil demand, mainly due to China, India and Russia. OPEC and many experts believe there are high chances that prices will never again be less than US$ 100 per barrel.

11.          The annual World Energy Outlook is the International Energy Agency's flagship publication and it is widely recognized as the most authoritative energy source for global energy projections and analysis. The WEO received numerous awards[9] from governments and energy industry for its analytical excellence. It represents the leading source for medium to long-term energy market projections, extensive statistics, analysis and advice for both governments and the energy business. All statistics and projections are related to three scenarios: Current Policies Scenario; New Policies Scenario; and 450 Scenario.

12.          Current Policies Scenario[10] shows how the future might look on the basis of the perpetuation, without change, of the government policies and measures that had been enacted or adopted by mid-2011. The New Policies Scenario – the central scenario of the WEO 2011 – incorporates the broad policy commitments and plans that have been announced by countries around the world to tackle energy insecurity, climate change and local pollution, and other pressing energy related challenges, even where the specific measures to implement these commitments have yet to be announced. Those commitments include renewable energy and energy efficiency targets and support, programs relating to nuclear phase-out or additions, national pledges to reduce greenhouse-gas emissions communicated officially under the Cancun Agreements and the initiatives taken by G-20 and APEC economies to phase out inefficient fossil-fuel subsidies that encourage wasteful consumption.[11] The 450 Scenario[12], which sets out an energy pathway that is consistent with a 50% chance of meeting the goal of limiting the increase in average global temperature to two degrees Celsius (2°C), compared with pre-industrial levels. According to climate experts, to meet this goal it will be necessary to limit the long-term concentration of greenhouse gases in the atmosphere to around 450 parts per million of carbondioxide equivalent (ppmCO2-eq).

13.          The Figure 1 shows the Average IEA Crude Oil Import Price presented on WEO 2011 indicating that the minimum level of oil prices is around US$ 100 per barrel.

14.          What consequences will arise from the new price level?  Following an adequate energy policy, we can face the challenge assuring energy supply and promoting the rational use of the available sources.  However, if prices stay as high as they are now, above the level of 450 Scenario, there will be recession in many countries, due to the impact of energy prices in the economy as a whole, including food prices. There will be a stronger need for promoting energy conservation policies, expanding the frontier for oil prospection and exploiting currently producing fields efficiently, and, mainly, searching new renewable energy sources. This latter appears to be the most important weapon against the boom of agricultural commodities prices.

15.          One of the main conclusions of the WEO 2011 is that “the share of GDP spent on oil imports is generally even higher in oil-importing developing countries, because their economies are typically more oil intensive. Higher oil prices have weighed on growth in oil-importing countries by consuming a greater proportion of household and business expenditure. They have also put upward pressure on inflation, both directly, through increases in fuel prices, and indirectly, as prices of other goods have risen to reflect the higher input costs”. Any study intentioned to assess the relation of biofuels production and food security must acknowledge that the pressure on oil prices contributes to food insecurity. Inflationary impacts, according to IEA, have been most pronounced in the emerging economies, particularly in Asia, energy weighs relatively heavily in domestic consumer price indices.

16.          Energy security is a prerequisite to food security. The main task is to assess the better way to reduce the pressures on oil prices and reducing emissions at the same time, not counting on a naïve technological breakthrough on transport sector and on energy sources. Also, such a report should mention the bad consequences of agriculture subsidies in developed countries that undermine all efforts of establishing sustainable local arrangements of food production in poor countries.  

17.          Among other imprecise data about Brazil on the text, there is incorrect information on annex 1, page 61. Brazil currently uses B5 and currently there is no predefined calendar for B7 (2013), B10 (2014), and B20 (2020) as put. The Government position is that there is no room for B20 in Brazil. The Brazilian Energy Plan (PDE 2021) clearly shows that Brazil has no plan to increase the biodiesel mandatory percentage of 5% (B5). On the ethanol blend the correct range is E18-E25. The biodiesel and ethanol volume columns are apparently misplaced. Moreover, the correct data for ethanol demand for mandatory purposes (anhydrous ethanol) is 8.3 million m³ (2011). Also, there is no mandate in Brazil for hydrated ethanol production and use.

18.          The Ministry of Mines and Energy of Brazil reinforces the recommendation of a total review of the draft document “Biofuels and Food Security” before any deliberation or any assessment of FAO country experts.

[1] BP Statistical Review of World Energy June 2012

'Light distillates' consists of aviation and motor gasolines and light distillate feedstock (LDF)

[2] Considering ethanol produced from sugarcane in tropical areas (7,5 m³/hectare)

[3] BP Statistical Review of World Energy June 2012

'Middle distillates' consists of jet and heating kerosines, and gas and diesel oils (including marine bunkers)

[4] Considering biodiesel produced from palm oil in tropical areas (5 m³/hectare)

[5] It is not considered here any production of ethanol from lignocellulosic from sugarcane bagasse and straw and also any new sugarcane varieties

[6] FAO (2009) Global Potential Area for Agriculture = 3.23 billion hectares

[7] FAOSTAT (2013): Total Agricultural Area in 2011 = 1.381.204.040 hectares

[8] FAOSTAT (2013): Total Harvested Area in 2011 = 697.687.682 hectares

[10] World Energy Outlook 2011 – Published by International Energy Agency (www.iea.org) p. 55

[11] World Energy Outlook 2011 – Published by International Energy Agency (www.iea.org) p. 54

[12] World Energy Outlook 2011 – Published by International Energy Agency (www.iea.org) p. 55

[13] World Energy Outlook 2011 – Published by International Energy Agency (www.iea.org)