Biofuels policies drive up food prices, say over 100 studies

Europe’s biofuels policies do increase global food prices. That’s the wide scientific consensus, according to a review of more than 100 economic modelling studies of the impact on food prices from increased demand for biofuels made from food crops. Increased demand for biodiesel has driven the price of vegetable oils in the EU, such as rapeseed, palm oil, soy and sunflower, up 171% per exajoule (EJ) of biodiesel produced, according to the analysis by consultancy Cerulogy for BirdLife Europe and T&E.

The price of oilseeds – before being crushed to oil and meal – saw 25% higher prices in Europe. Globally, biodiesel demand is associated with an increase of 38% per EJ on vegetable oil prices. Wheat ethanol increased global wheat prices by 20% per EJ and sugar-based ethanol increased world’s sugar prices by about 40% per EJ.

T&E’s clean fuels officer, Jori Sihvonen, said: ‘The science is clear: biofuels policies increase food prices. The biofuels industry needs to face facts that when you use food to fuel cars you increase demand for food and its price. Instead of spreading “alternative facts”, biofuels producers should invest in advanced technology that does not rely on land grown crops.’

The European Parliament is currently reviewing a proposal to allow member states to still count a 3.8% share of food-based biofuels towards their renewable energy targets in 2030. The analysis finds that if Europe phases out food-based biofuels by 2030, global vegetable oils will be 8% cheaper in 2030, compared to a scenario with a 7% target for biofuels.

Food-based biodiesel are, on average 80% worse for the climate than the fossil diesel they replace, when ILUC emissions are included. Biodiesel made from palm oil is three times worse for the climate than fossil diesel. Europe’s cars and trucks are now the top consumers of palm oil in Europe.