GLOBE Foundation

A made in Canada food vs. fuel debate


Source: GLOBE Foundation

Recent amendments to the Canadian Environmental Protection Act (Bill C-33) passed by Parliament will give the Government authority to develop regulations for renewable fuels mandating a 5 per cent renewable content in gasoline by 2010 and 2 per cent renewable content in diesel fuel and heating oil by 2012. The government argues the renewable fuels strategy will reduce greenhouse gas emissions by approximately 4 mega-tonnes per year. But some farmers, environmentalists and international development groups believe this will only add to the growing fuel vs. food crisis.

Over the past few years, production of ethanol, bio-diesel and other bio-fuels has expanded dramatically in response to increasing concerns about energy security and climate change. Policy supports have been established, and Canada is only one of many countries encouraging ethanol and bio-diesel production.

Last year the United Nations accused the US and the European Union of having taken the 'criminal path' by contributing to an explosive rise in global food prices through using food crops to produce biofuels. This came in the wake of skyrocketing prices and plummeting food supplies in the developing world.

In certain nations, food shortages and high prices have led to protests and in some cases rioting. There are few signs of a reprieve. The World Bank predicts prices will remain high until 2015.

Lester Brown of the Earth Policy Institute, a prominent environmental think tank, has prompted calls for a moratorium on new ethanol distilleries as protection against rising demands for grain from biofuels producers.

Brown’s conclusions are supported by other authorities. The US Department of Agriculture says that between the food, livestock and ethanol industries, corn demand in the United States will exceed supply and will deplete stockpiles by 2008 unless planting rates increase. Recent flooding throughout the agricultural heartland of America has only added to the problem of insufficient supply.

Under normal conditions, the U.S. corn crop accounts for 40 percent of the global harvest and annual U.S. corn exports of some 55 million tons make up almost one quarter of world grain exports. The corn harvest of Iowa alone exceeds the entire grain harvest of Canada.

During the Senate debate on Bill C-33, farm leaders and international development groups raised concerns about the potential impacts of Canada’s biofuels strategy. Pat Mooney, Executive Director of ETC Group, one of the witnesses at the Parliamentary hearings, told Senators that 'governments around the world are being forced to reevaluate their commitments to biofuel targets.'

An Oxfam International report ’Another Inconvenient Truth,’ shows why a blanket mandate for biofuels content in Canadian gasoline would help drive food prices higher world-wide, pushing millions of people further into poverty,' said Mark Fried, Public Policy Coordinator for Oxfam Canada. 'Burning food in our cars while people go hungry is not good public policy.'

The Canadian Renewable Fuels Association (CRFA) dismissed the Oxfam Report as 'myth'. A statement by CRFA President Gordon Quaiattini said the Oxfam argument that half of Canada’s corn crop would be diverted to make biofuel is wrong. 'In Canada ethanol is made from wheat and corn. 4% of our wheat crop (2.5% if you factor in distillers grains) and 11% of our corn crop (8% if you factor in distillers grains) is used in the production of 1 billion litres of ethanol today. Canada’s new 5% renewable fuels target would increase production to 2.5 billion litres of ethanol, Quaiattini states.

According to a report published by the Guardian newspaper, biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian. The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.

The message appears to be taking root.

In a major reversal, this week the European Union signaled it was cutting back on its ambitious target to raise Europe’s use of biofuels. At the same time, a new report for the British government cast fresh doubt on using fuels from crops in the fight against climate change.

As noted in the Herald Tribune, until recently, European governments had sought to lead the rest of the world, setting a target for 10 percent of transportation fuels to be derived from biofuels by 2020. But the allure has dimmed amid growing evidence that the kind of targets proposed by the EU are contributing to deforestation and helping force up food prices.

'The political tide in Europe is now turning against biofuels, said Adrian Bebb, an agrofuels coordinator with Friends of the Earth Europe. As noted in the Herald Tribune, European energy ministers have given one of their strongest signs that EU governments were prepared to back away from the 10 percent target. 'We have to decide if the quota can be kept,' the Jochen Homann, secretary of state at the Economics Ministry, said Saturday in Paris. 'It might be changed,' he said.

Rising food prices in the developing world, in part due to increased diversion of food crops to biofuels, prompted European Commission President Jose Manuel Barroso to announce an emergency farm aid package this week to give a boost to agriculture in developing countries. The money would come from unused European farm subsidies and would be mainly directed at Africa. Barroso is in Japan for this week’s Group of Eight (G8) summit where leaders of the world’s wealthiest nations are expected to discuss soaring food prices.

As noted in an earlier GLOBE-Net article on this subject, the issue is not biofuels or no biofuels, but the right biofuels. Switching the basic feedstock used to create biofuels to non-food crops such as switchgrass which is found throughout North America, or sugarcane wastes as is done in Brazil, would be a far better biofuel source than corn.

CRFA President Quaiattini makes the same point about the OXFAM study, which he says does not account for the promise of next generation biofuels such as cellulose ethanol and biodiesel produced with algae. These and other emerging technologies will further reduce green house gases and moderate prices at the pump.

There are no simple answers to the food versus fuel debate. So many other factors are in play - hoarding by previously food exporting nations, artificial farm subsidies and trade barriers, climate change impacts, new renewable energy technologies, etc. - that one cannot simply point to the diversion of one food crop to biofuel production as the cause of such widespread food shortages in the developing world.

But on the other hand, one cannot dismiss the concern lightly. There are good biofuels and bad biofuels, and it behooves the government of Canada to do all that is necessary to ensure that we err on the side of caution and goodness.

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