G20 leaves biofuels industry unscathed - for now

The biofuels industry emerged relatively unscathed from a meeting of G20 agriculture ministers on Thursday, which ignored advice to scrap biofuels subsidies on the basis they force up food prices. The warning against biofuels targets and subsidies in places such as Europe, Canada, India and the United States had appeared in a report to the G20 by 10 international agencies, including the World Bank and the World Trade Organisation.
But agriculture ministers meeting in Paris merely called for further analysis of the impact of biofuels on food availability, price volatility and sustainability. A communique pledged to "address the challenges and opportunities posed by biofuels, in view of the world's food security, energy and sustainable development needs".
European bioethanol industry group ePure cheered the move. "The European ethanol industry welcomes the decision by the G20 to vanquish the myth that biofuels are responsible for food price volatility," said ePure Secretary General Rob Vierhout. "Biofuels are a convenient bogeyman in the debate on food."
One WTO official at the meeting said: "Biofuels was a very contentious issue, with lots of resistance from Brazil to any language that would give the impression that biofuels from food are not desirable." A Brazilian government letter criticised the agency report for saying that biofuel subsidies should be scrapped. The report did not give sufficient weight to the impact of oil prices and agricultural subsidies by rich countries, said the leaked letter, seen by Reuters on Thursday.
However, bad news for the biofuels industry came in a leaked report for the European Union, which said biofuel from palm oil, soybean and rapeseed competes heavily for land, which indirectly encourages deforestation to create new farmland. That, in turn, leads to more greenhouse-gas emissions than would have been produced by burning fossil fuel, said the EU report, according to news website European Voice. Bioethanol's green credentials fared better than those of biodiesel, it added. The EU's executive Commission has accepted that biofuels increase the pressure on land resources and has vowed to act.