Caution needed with biofuels

The UK Government has said it would "proceed cautiously" over the introduction of biofuels, after a report found they could be increasing greenhouse gas emissions and contributing to food price rises.

But Transport Secretary Ruth Kelly said the Gallagher review into biofuels did not recommend a moratorium on the fuels, which are sourced from organic materials such as sugar beet and palm oil.

She was speaking following the publication of the Gallagher review which looked at the indirect effects of biofuel production such as land use change and pushing up food prices.

The review called for biofuels to be introduced more slowly than planned until controls are in place to prevent higher food prices and land being switched from forests or agriculture to growing fuels.

The study into indirect effects of biofuels warned current policies may cause greenhouse gas emissions rather than savings - for example if forests were cleared for crop plantations.

It also found biodiversity would be reduced. Increasing demand for biofuels is also contributing to rising food prices, notably oil seeds which could see a spike of 75 per cent by 2020 under the worst case scenarios, and increasing poverty.

Current policies could push up grain prices in the EU by 15 per cent, sugar by 7 per cent and oil seed by 50 per cent, while in other parts of the world millions more people could be pushed into poverty.

The review estimates that an extra 10.7 million people in India could find themselves in poverty, while countries such as Kenya, Malawi and Bangladesh could see hundreds of thousands affected by the food price rises caused by biofuels.

But Professor Ed Gallagher, chairman of the Renewable Fuels Agency, said the figures did not take into account the impact of climate change on poor people if biofuels weren't introduced, the boosts they could provide to rural economies or the fluctuating oil price.

The review recommends that biofuel production should target idle and marginal land, and the use of so-called second generation biofuels - which use waste parts of plants for energy to avoid land use change and reduce competition with food production.

Marginal and idle land could include set-aside land in the UK and parts of Eastern Europe where farmland has fallen into disuse, co-author of the report Greg Archer said.

If existing global biofuels targets are met, there would be a 1 per cent reduction in greenhouse gas emissions by 2020 if it is done in such a way that avoids changes to the way land is used.

Currently the Renewable Transport Fuels Obligation has a target to ensure 5 per cent of all transport fuels come from organic sources such as rape seed oil or sugar beet by 2010, up from 2.5 per cent at the moment.

But the Gallagher review called for the target to be slowed to rises of 0.5 per cent a year, hitting the 5 per cent target by 2013/2014.

The targets should not go beyond that figure unless they can be shown to be "demonstrably sustainable", the report said.

If higher targets are introduced, they must include specific obligations on suppliers to encourage second generation biofuels which deliver better greenhouse gas savings.

The study's authors said they believed a target of 5 per cent to 8 per cent of energy for transport fuels could be sustainably sourced from biofuels across Europe by 2020, lower than the proposed EU target of 10 per cent.

But the report said there was a future for a sustainable biofuels industry - although creating a framework would take time and be challenging.

Archer said: "With the scale of the challenge that global warming presents we simply can't afford to throw away good options for reductions in greenhouse gas emissions if it can be done in a sustainable way."

Prof Gallagher said: "Our review makes clear that the risks of negative impacts from biofuels are real and significant, but it also lays out a path for a truly sustainable biofuels industry."

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