Industry calls for action on biofueled price rises

By Ahmed ElAmin

- Last updated on GMT

Related tags Ciaa Biodiesel Biofuel

The EU's food and drink industry yesterday called on the bloc's
governments to take action on halting price rises for their
supplies, as more crops are diverted for biofuel production.

In particular the Confederation of the Food and Drink Industries of the EU (CIAA) is concerned about the impact of the EU's 10 per cent legally binding target will have on the supply of agricultural raw materials in terms of both availability and price. In a statement the CIAA is calling on the Commission for a detailed impact assessment of its bio-fuels support measures on the food sectors, taking into account the specific characteristics of the bio-diesel and bio-ethanol markets. The food and drink industry is competing for the same raw materials that supply bio-fuels' companies. The CIAA said food and drink operators are facing increased prices in a number of sectors as more crops are diverted toward the production of biofuels. "In the oils sector for example, this trend can be explained by several factors, notably development of the biodiesel industry and the shift of food demand from soya oil to rapeseed oil because of a preference for non-GMO (genetically-modified organisms material)"​ the CIAA stated. Biofuels have become an increasingly hot topic in the food and drink industry over the past few years. In 2003 the EU introduced a directive calling on member states to increase the share of biofuels in the energy used for transport to two per cent by 2005 and to 5.75 per cent by 2010. A new energy strategy, announced on 10 January 2007, establishes that biofuels should make up at least 10 per cent of the energy used for transport in each country. The CIAA is calling on policymakers to integrate, in a balanced way, the key challenges of promoting energy security through the diversification of energy and feedstock sources. While the organisation acknowledges that the renewable energy sector plays a role in providing new outlets for agricultural production, it is concerned that the Commission's has taken for granted that second-generation bio-fuels will lessen the impact. The CIAA says nothing in the report provides assurance as to their availability between 2010 and 2020. "Given this uncertainty, a 10 per cent minimum-binding target of bio-fuels runs the risk of putting increased pressure on food markets, and most acute when supplies are tight,"​ the CIAA stated. "It is worth noting that the Commission's assumption for availability of raw material does not seem to take into consideration the fact that similar developments are taking place in other countries."​ CIAA calls on any policy to allow member states sufficient flexibility to promote the renewable energies most suitable to their specific potential and priorities. The plans should also be able to differentiate bio-ethanol and bio-diesel development and targets. "Furthermore, in the event of a serious crisis in the supply of feedstock for food and feed uses, member states must have the possibility to deviate from their bio-fuel targets,"​ the CIAA stated. According to a statement put out yesterday by researchers at Spain's Universitat Autonoma de Barcelona, biodiesel cannot contribute to reducing the EU's high dependency on fossil fuels. "The idea that biodiesel could be a solution for the energy crisis is not only false, but also dangerous," the researchers stated. "In fact, it might favour an attitude of technological optimism and faith in a technological fix of the energy problem." The university noted that in 2005 the EU target was not reached and it will probably not be reached in 2010 either. In 2006 about 0.8 per cent of energy consumption in the EU is made by biofuels. In Europe, biofuels are subsidised through agricultural subsidies, the total or partial exemption from taxes, and requirements that any fuels sold at the pump must contain a given percentage of biofuels.

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