GRFA: HLPE report biased against biofuels

By Global Renewable Fuels Alliance | June 26, 2013

The Global Renewable Fuels Alliance has reacted to a Food and Agriculture Organization report that was presented to ambassadors to the FAO in Rome. The GRFA welcomes the publication of the report, and the significant improvements made since its first draft. However, the GRFA is critical of several methodological and factual errors, the omission of key coproducts in calculating the net benefits of biofuels, the overly prescriptive policy recommendations and the inclusion of unproven land use methodologies.

The report, “Biofuels and Food Security,” was conducted by the U.N. Committee on Food Security’s High Level Panel of Experts. The HLPE has not completed a comprehensive analysis of biofuels production that includes a thorough understanding of the industry and the inherent benefits derived from biofuels production.

“It is unfortunate that the HLPE failed to get this report right. While the final report is more balanced than previous drafts, the report is still incomplete and should be revised,” said Bliss Baker, spokesperson for the Global Renewable Fuels Alliance. “The HLPE should have ensured that all of the benefits of biofuels were included in the report and that it was done in the context of a world with increasing energy prices.”

This report fails to fully incorporate key inputs like coproducts in their models. The production of animal feed is a very valuable component of biofuels production. According to (S&T)2 Consultants Inc., the global ethanol industry produced 40 million metric tons of animal feed in 2012, which offset the need to grow crops for livestock. Additionally, approximately 65 percent of world ethanol production last year was produced from cereals and one third of those grains were returned back into the food complex as feed. This omission significantly underestimates the net benefits of biofuels production.

The report also relies on the theory of indirect land use change to predict future land use patterns globally despite the overwhelming number of scientists that have discredited the methodology and the outcomes of this so-called science.

“ILUC modeling relies on hundreds of assumptions to predict future land use patterns around the world and to date has shown no reliability in being able to accurately predict future land use patterns,” stated Baker.

A recent report from the U.S. Department of Energy, “Decomposition Analysis of U.S. Corn Use for Ethanol Production from 2001-2008,” looked at historical data and determined that indirect land use change resulting from corn ethanol expansion over the past decade has likely been “minimal to zero.”

“The HLPE report also failed to emphasize the effect oil prices have on food prices,” said Baker. “This is a shocking omission because biofuels are the only commercially available substitute to oil and the price of crude oil is by far the largest component in the price of food.”

A recent World Bank report concluded that ‘most of the price increases (of food) are accounted for by crude oil prices (more than 50 percent)…Crude oil prices mattered most during the recent boom period because they experienced the largest increase…most of the contribution to food price changes from 1997-2004 to 2005-12 comes from the price of crude oil.”