Biofuels: Starving people to feed cars? Or growing our way out of - - PowerPoint PPT Presentation

Biofuels:

Starving people to feed cars? Or growing our way out of poverty?

Rachel Slater June 2007

Outline

• Introduction to biofuels
• Links between biofuels, agriculture and

poverty reduction

• Links between biofuels, energy and

poverty reduction

• Conclusions / Contributions / Discussion

What is a biofuel?

Biofuels are defined here as organic primary and/or secondary fuels derived from biomass which can be used for the generation of thermal energy by combustion or by using other technology. They comprise both purpose-grown energy crops, as well as multipurpose plantations and by-products (residues and wastes) (FAO 2000).

Types / Sources

• Ethanol:
• Starch (grains, roots)
• Sugar (sugarcane, sugar beets, molasses)
• Other biomass (wood, grass, agricultural

residues, etc.)

• Biodiesel:
• Oilseeds (soybeans, rapeseed, sunflower)
• Animal fats
• Others (recycle oils “yellow grease”)

Trends in production

Global Production of Fuel Ethanol

• 5,000

10,000 15,000 20,000 25,000 30,000 35,000 1975 1980 1985 1990 1995 2000 2005 2010 Year Million liters/year

Global Production of Biodiesel Fuels

• 200

400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 1975 1980 1985 1990 1995 2000 2005 2010 Year M illio n liters/year Source: Weingart 2006

Facts and figures

• The US and Brazil produce over 70% of

the world’s bioethanol

• The EU produces over 95% of the world’s

biodiesel

• 120 million litres of bioethanol are

projected to be produced by 2020

• Large increases in export expected from

Brazil, Indonesia and Malaysia

Opportunity for Africa?

Ethanol production in Africa 2006 (%of African production)

5% 3% 2% 1% 5% 65% 3% 4% 12% Egypt Kenya Malawi Mauritius Nigeria South Africa Swaziland Zimbabwe Other Africa

Optimists

• Triple solution to the problems of poverty

and climate change and energy security

• Local energy solutions for net energy

importing countries – cheaper fuel for poor people

Pessimists

• Filling the petrol tank of a range rover with

ethanol requires enough grain to feed a person for one year

• 10% of world’s sugar harvest converted to

ethanol brought doubling of price of sugar; price of palm + 15% over last year, 25% gain expected next year

• Increase in tortilla price in Mexico

Objectives / Questions

• Global trends in biofuel production and

consumption

• Implications for future international trade and

regulation

• Economics of biofuel production and impacts
• n the agricultural sector, including adaptation

costs

• Possibilities for local value addition
• Poverty reduction, equity dimensions and food

security

Poverty reduction, equity dimensions and food security

– access to, ownership and use of land by the poor; – difference between different biofuel production systems – poor people’s access to biofuel supply chains to poor people – winners and losers under different scenarios – impacts on food production and food prices

The macro position / biofuels trade

• Energy importing developing countries
• Biofuel-producing developing countries
• Northern countries avoiding more

agricultural reform

• Substitution versus export: impact
• Pro-poor (and pro-rural) biofuels

production

• Miss the opportunity and end up worse
• ff?

Exports and prices … distributional consequences?

• Increase the incomes of producers

(and countries that are in net surplus)

• Reduce the incomes of consumers

(and countries that are net importers)

Poverty effects

Effects in

• Different countries (energy importers and

exporters) Effects of

• Different feedstocks / production systems
• Downstream (transportation) costs
• Existing crop production and processing
• Patterns of land holding

Economics of biofuels production

• Economies of scale are important
• Feedstock is the largest cost of production
• Biofuels production can be complementary

to other agricultural production

• Biofuels production requires a significant

labour force

Food security: Back to Malthus?

• Beyond ‘starving people to feed cars’
• Will biofuels take land from food

production?

• What impacts on food prices are likely?
• Impacts of aid modalities?

Conclusions

• Context is critical
• Address

challenges in agriculture