OECD reports trade barriers & biofuel subsidies inefficient


Government subsidies and trade barriers in the global biofuels industry increase costs and may reduce environmental benefits, according to a report prepared for the Organization for Economic Cooperation and Development.

Biofuels will reduce energy-related emissions by no more than 3%, at the cost of rising food prices and potential environmental damage, including the loss of biodiversity and pollution caused by the use of fertilizers, the report said. Ethanol made from sugarcane and biomass such as switchgrass, and biodiesel made from animal fat and recycled cooking oil have a greater impact on the reduction of greenhouse gas emissions than fuels made from crops such as corn, the report said.

US subsidies to biofuel producers cost more than $7 billion a year and in some countries import tariffs can add at least 25% to costs, the report for the Paris-based organization said. The report forms the basis of a two-day debate by officials from the group’s 30 member states. Biofuels such as ethanol are derived from crops including sugarcane and corn.

„Governments could end up supporting a fuel that is more expensive and has a higher negative environmental impact than its corresponding petroleum product,” wrote the report’s authors, Richard Doornbosch and Ronald Steenblik. Governments in the US and Europe are encouraging alternative fuels to limit carbon-dioxide emissions from fossil fuels and reduce dependency on oil imports.

The EU wants biofuels such as ethanol to account for 10% of transport fuel by 2020. President George W. Bush wants to increase US ethanol consumption by raising the target for renewable-fuel use almost fivefold by 2017. „In only a very few countries do biofuels have the potential to make a significant dent in dependence on imported oils,” according to the report. (Bg)

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