Food or fuel?

- Editor


With the rising cost of oil exploration and production or just the cost of importing energy, many countries are looking to biofuel production to provide the answer.

Biofuels can be produced from a variety of organic materials - trees, grasses, agricultural plant wastes, straw, algae, by products of dairy and meat production, grain crops e.g.corn.

Here in New Zealand, it is expected that tallow - a by-product of the meat industry - will be used to produce most of our biofuel. Under the Biofuels Sales Obligation, from 1 April this year,  oil companies that sell petrol or diesel in New Zealand must sell biofuels as well. By 2012, oil companies must ensure that 3.4% of the energy content of their total annual petrol and diesel sales is biofuel*.

Worldwide, there is a large increase in the use of grain crops for biofuel production. It is expected that 30% of the US corn crop will go to biofuel production by 2010.

However, the growing importance of biofuels over the next few years could see the volatility that is associated with the energy markets being introduced into global food markets, particularly for the staple foods e.g. corn.
More immediately, a change in land use from food production to biofuel production can have a large effect on the local community. It is likely that food prices will rise - benefitting the exporter but putting a bigger burden on the importer and consumer, particularly where there are poorer communities which must buy on the open market and food purchases make up a large part of their overall budget or where grain is bought to feed animals which are the basis of the local economy. This could also lead to food shortages.

The global balance between food and biofuel production would ideally be determined by the global markets. However, any particular country’s need for security of energy supply could undermine this balance and any international collaboration or agreements. e.g. Biofuels may be relatively efficient environmentally but not all methods of production are equally efficient for reducing aggregate carbon emissions.

Climate change is likely to affect agricultural production. An increase in the severity of major weather events, an increase in the volatility of the weather and changing rainfall patterns could see crop yields suffer and threaten the security of both food and biofuel production.

The number of undernourished people globally is expected to increase by between 40 million and 170 million in 2100, according to forecasts by the Intergovernmental Panel on Climate Change. Changing from food to biofuel production will hardly help these people.

The consequences of these changes are likely to be more uncertainty and volatility in the global markets and shortages or generally higher prices for food crops.

* Source: Energy Efficiency & Conservation Authority, www.eeca.govt.nz