‘Biofuels not linked to increasing food prices’ claims new report

A new study by energy consultancy Ecofys shows ethanol is not causing food price increases.

The study, Biofuels and Food Security: Risks and Opportunities, highlights that the impact of EU biofuels demand up until 2010 only increased world grain prices by about 1-2%.

The Ecofys study examines the casualty between biofuels production, global crop commodity prices and implications for food security, with a particular focus on poor regions. It explains that prices of primary global agricultural commodities, from which biofuels are produced, are not directly correlated to food prices because both are ‘disconnected from global markets’.

‘This study represents a major step to understand the interrelation of biofuels production and food prices. It reveals the limited impact that biofuels production has had on food prices and recognises the importance that co-products have on managing land use pressure,’ says Carlo Hamelinck, author of the report. ‘It recommends looking closer at systemic factors which, in the past, have often been ignored in important scientific reports on biofuels.’

The study also confirms agricultural commodity prices are strongly linked to oil prices and that ‘biofuels could reduce oil price increases and as such limit future commodity price increases’, while outlining that ‘systemic factors’, such as reduced reserves, food waste, transportation issues and storage costs, play a much larger role in local food prices than imagined.

It also highlights the importance that protein rich co-products from both ethanol and biodiesel avoid the land use concern largely debated in the European Parliament and denied by important NGOs in Brussels.

‘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,’ says Rob Vierhout, secretary general of ePURE

‘Multiple factors contribute to food prices and policymakers should distinguish between all the benefits that our industry provides to Europe, and the real causes of hunger in the world.’

Ecofys believes this is the first scientific attempt to integrate all the economic forces influencing global and local food prices by addressing low stock impacts on volatility, low food prices and waste, global prices impact on local prices, and high prices impact on agriculture and food security.