Bad ethanol, good ethanol

Biofuel is in the dock at the global food summit in Rome this week, with countries divided over whether it is the villain behind food insecurity, or the cheap energy of the future.

At issue is the impact of grain-based biofuels on food prices - now at their highest levels since the 1970s - and a related wrangle over bioenergy subsidies. But there is also, increasingly, a rethink of how "green", or eco-friendly, biofuel really is.

"There is no agreement on the impact of grain-based biofuel on food prices," Alexander Müller, Assistant Director-General of the UN Food and Agriculture Organisation (FAO), told IRIN. Various studies and think-tanks have come up with estimates of the impact of biofuel on food prices that range from 10 percent to 60 percent.

Neither is there consensus on government handouts to farmers and industry, or the long-term impact of biofuel. "It is like the Kyoto Protocol [on global warming] - you cannot expect agreement within three days," said Luka Alinovi, a senior FAO food security advisor.

The simmering debate was brought to the boil by Jacques Diouf, the head of FAO, who trashed subsidies for diverting cereal production away from food and into fuel in his opening remarks at the summit on Tuesday.

The authoritative International Food Policy Research Institute (IFPRI) has estimated that bioenergy accounts for 30 percent of the recent food price inflation. A report by the Organisation for Economic Cooperation and Development (OECD) concluded that biofuels were responsible for a 60 percent increase in the consumption of cereals and edible oils between 2005 and 2007.

Ed Schafer, the US secretary for agriculture, told journalists the US administration - a heavy provider of subsidies - believed biofuels accounted for just three percent of food inflation, and should not be a focus of the conference.

Good ethanol vs bad ethanol

Brazil, one of the world's largest producers of biofuel, was eager to differentiate between its sugarcane-based ethanol and the grain-derived fuels produced in the US and some OECD countries.

''Mounting evidence that biofuel mandates are actually accelerating climate change by driving the expansion of agriculture into critical habitats, such as forests and wetlands''

"Sugar-cane ethanol in Brazil is not a threat to the Amazon [River basin], it does not take land out of food production, nor does it take food off the tables ... There is good ethanol and bad ethanol," Lula da Silva, Brazil's president, told the summit.

"Corn ethanol can only compete with sugarcane ethanol when it is shot up with subsidies and shielded behind tariff barriers," a remark that evoked a strong response from the US.

Brazil, Schafer hit back, had provided support to the biofuel sector for decades, even encouraging state-owned buses to run on ethanol. "We have only just begun to walk down that path."

Rocketing fossil-based fuel prices and the need to reduce greenhouse gas emissions have led many countries to pursue ethanol production. But is biofuel the answer? And is it really green?

The maize ethanol produced in the US may cut greenhouse emissions by 10 to 30 percent, compared to petroleum; but ethanol produced from sugarcane or cellulose could slash environment-damaging gases by 90 percent or even more, according to an IFPRI study.

Besides, there is "mounting evidence that biofuel mandates are actually accelerating climate change by driving the expansion of agriculture into critical habitats, such as forests and wetlands," said a briefing paper released at the summit by Oxfam, the UK-based development agency.

John Holmes, the UN Emergency Relief Coordinator and Under-Secretary-General for Humanitarian Affairs, told journalists that the answer perhaps lay in the development of second-generation biofuels, produced from the residual non-food parts of crops, such as stems, leaves and husks, and also from biowaste like wood chips, skins and pulp.

"The debate around biofuels is an evolving one; a few years ago, biofuel was hailed as the best thing that could have happened," said Alinovi. "We can still produce ethanol without compromising food security and cropland."

Müller was hopeful that a consensus would be reached at the summit - an anticipation echoed by the US delegation. Schafer told journalists on Wednesday that there could be agreement on "acceptable language" in biofuel discussions.

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