Biofuels -food Or Fuel

Food or Fuel? A struggle to survive….

Outline • What is Biofuel? • Why Bio-Fuel Became Important ? • What is the problem from Biofuels? • Who is affected? • A Trade Off : Food or Fuel? • Conclusion, Suggestions

What is Biofuels? • The use of plants or its products such as corn, wheat for the production of energy (ex. Ethanol) which can be used instead of oil as a source of energy for transportation and manufacturing…etc

What is Biofuels? • Its chemical properties and performance characteristics are very similar to petroleum-based diesel fuel. • It can readily replace or be blended with diesel fuel or heating oil in standard diesel engines and boilers, requiring very few, if any, equipment modifications. • It can be produced fairly inexpensively from a variety of biomass feedstocks in large oil refinery-sized plants or at the village level using simple technology.

Biofuels Production cycle

The Shift to Biofuels • Biofuels is not new, but it remained a tiny niche market until oil prices rose. • When oil prices peaked , Bio-fuel became cost effective.

Why Biofuels? • A large-scale expansion of biofuels for transport has the potential to make a significant positive contribution to the climate problem and to provide a source of income to support rural livelihoods. • Biofuels production may offer incomegeneration opportunities in rural areas

Rising oil prices

“Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world.”

•

President Bush, •

G.W.

State of the Union Address, January 2006 •

What is the problem from Biofuels? • Biofuels creates an increased demand for crops such as corn and wheat, so its prices get higher and at the same time food prices gets higher as well.

§

World Bank policy research working paper released in July 2008 says that biofuels have raised food prices between 70 to 75 percent. The study found that higher oil prices and a weak

Monthly U.S. Ethanol ProductionExpressed as an annual rate

U.S. Use of Corn

• the uses of Corn as food (red curve) is shifted towards the production of ethanol (green curve), also exports are declining.

Increased portion of food supply devoted to biofuels

What is the problem from Biofuels? Competition between biofuels and food, as an enduse of the same crop (e.g. maize, sugarcane) or as alternative land uses (e.g. oil palm versus food crops), increase demand for food & prices. the socalled “food versus fuel” debate.

What is the problem from Biofuels? § The World Bank declared in July 2008 that biofuels have raised food prices between 70 – 75% and that the higher oil prices explain 25 – 30% of the total price rise. § Rising food prices are likely to have negative effects on access to food for poorer and more vulnerable groups.

What is the problem from Biofuels?

Cost of biof uels

Prices of many commodities rose even more + 585 %

+ 329 %

+ 130 %

Source: International Monetary Fund: International Financial Statistics

We are paying Twice!! § Most people do not realize that global food reserves are at historic lows, while proven global oil reserves are at historic highs. With biofuels you pay twice; § once at the pump and then again at the supermarket, which effectively makes § Biofuel production a massive new tax on food.

Who is most affected with the increasing prices of food? • Developing countries : Huge demand due to big Populations. • India for example has one of the highest demands population1.13 billion.

High population growth =high food demand

Eating Mud! § The poor of the Third World, the homeless, the elderly, the disabled and all those living on low fixed incomes are the hardest hit by high food prices.

§ Haiti resorting to eating “Mud Cakes” because American biofuel mandates have made grains unaffordable.

Rising food prices have sparked violent protests around the world. Five people were killed and hundreds injured

Pakistani women buy subsidized flour in Lahore. The price of staple foods and fuel has risen drastically in the

s.

Conflict of Interests • Indian minister attacks biofuels: INDIAN FINANCE MINISTER HAS SAID THAT IT IS "OUTRAGEOUS" THAT DEVELOPED COUNTRIES ARE TURNING FOOD CROPS INTO BIO FUELS. • He said the pursuit of such policies at a time when many in the world could barely afford to eat was "outrageous and... must be condemned".

Developed Countries response!! • Former US Secretary of State Condoleeza Rice said that the global food crisis is caused by “the growing Indian and Chinese appetite”!!!

What are the Future plans? • The EU plans to have 8% of its transportation fuels coming from biofuels by 2015 . • In the USA, the Energy Policy Act (EPACT) of 2005 created a national Renewable Fuels Standard (RFS) that plans to increase national biofuels consumption to 28 billion litres by 2012.

Conclusion • Increasing the biofuels production by the developed countries will cause higher food prices that will affect negatively the food supply for the developing countries. • The biofuels negative effects on food prices will increase in the future with high population growth rates. • Reforms to the energy sector should protect the poor, especially the 1.1 billion

Finally …

We are not against biofuels but, developed countries must search for alternatives that won’t affect the food supply for poor.

Thank You