UN Sees Major Shift to
Bioenergy
GreenBiz.com,
26 April 2006 - Under the pressure of soaring oil prices and growing
environmental constraints, momentum is gathering for a major
international switch from fossil fuels to renewable bioenergy, according
to the UN Food and Agriculture Organization.
"The gradual move away from oil has begun. Over the next 15 to 20
years we may see biofuels providing a full 25 percent of the world's
energy needs," Alexander Muller, the new Assistant Director-General for
the Sustainable Development Department of FAO said here.
Factors pushing for such a momentous change in the world energy
market include environmental constraints -- increased global warming and
the Kyoto Protocol's curbs on emissions of carbon dioxide and other
greenhouse gasses -- and a growing perception by governments of the
risks of dependence on oil.
"Oil at more than 70 dollars a barrel makes bioenergy potentially
more competitive," Muller said. "Also, in the last decade global
environmental concerns and energy consumption patterns have built up
pressure to introduce more renewable energy into national energy plans
and to reduce reliance on fossil fuels."
His view is shared by a growing number of investors, including Bill
Gates, who recently decided to finance a US ethanol company to the tune
of US$84 million. Other new entries in the field are a French company
hitherto better known for making Foie Gras, and Hungary, which plans to
turn over two million acres of farmland over to biofuel crops in the
next few years.
FAO's interest in bioenergy stems from the positive impact which
energy crops are expected to have on rural economies and from the
opportunity offered countries to diversify their energy sources. "At the
very least it could mean a new lease of life for commodities such as
sugar whose international prices have plummeted," noted Gustavo Best,
FAO's Senior Energy Coordinator.
What the rest of the world could do tomorrow, Brazil, the world's
biggest producer of bioethanol, is already doing today. A million
Brazilian cars run on fuel made from sugar cane, and most new cars
hitting the road there are powered by "flex fuel" engines. Introduced
three years ago they use either gasoline or bioethanol, or any mix of
the two.
According to senior motor industry executives, the flex engines are
spreading faster than any previous innovation in the automobile sector.
The reason is simple enough. In Brazil, which started producing biofuel
30 years ago, a barrel of bioethanol is currently half the price of a
barrel of oil.
Some 1.5 million farmers are involved in growing sugar cane for fuel
in Brazil. But "sun fuel" can be made from a variety of crops including
soya, oil-palm, sugar beet, and rapeseed.
Europe lags well behind Brazilin bioethanol production and
consumption, and European prices are roughly twice Brazilian ones. But
the EU has set itself the target of increasing the share of biofuels in
transport to eight percent by 2015.
However, if oil prices stay high, things could move even faster.
According to studies by the European Union, biofuels grown on available
cropland could substitute 13 percent of petroleum-based fuels in the
short term.
Diesel can be made from virtually any oil seed. "The world's first
diesel engine actually ran on peanut oil," noted Best.
Europe is already the world's largest producer of biodiesel (now made
from rapeseed, soya or sunflower seeds), and the sector is growing fast.
Various countries such the Germany, Ukraine and others, and many private
and public companies are considering a big move into biodiesel from
these crops and other sources.
"The beauty of bioenergy is that production can be tailored to local
environments and energy needs," Best said. "Where there's land, where
there's farmers, where there's interest, bioenergy may be the best
option. And if we add some sound analysis and good business models, we
will get that option right."
Clearly, a major move away from fossil fuels is destined to have
resounding geopolitical repercussions with hopefully a broader
international base of energy production and sources. But FAO's focus on
the issue lies more with the likely impact on small farmers and the
implications for food security and rural development.
"Farmers, particularly in tropical areas, are seeing new
opportunities for increasing production and raising their incomes," Best
said.
"But we also need to be careful. We need to plan," he warned.
"Competition for land between food and energy production needs to be
converted to positive common benefits."
One hazard, for instance, is that large-scale promotion of bioenergy
relying on intensive cash-crop monocultures could see the sector
dominated by a few agri-energy giants -- without any significant gains
for small farmers. But to date no comprehensive attempt has been made to
address the complex technical, policy and institutional problems
involved.
In order to fill this gap FAO has set up an International Bioenergy
Platform (IBEP), to be officially presented at the United Nations in New
York on May 9. The IBEP will provide expertise and advice for
governments and private operators to formulate bioenergy policies and
strategies. It will also help them develop the tools to quantify
bioenergy resources and implications for sustainable development on a
country-by-country basis.
It will further assist in the formulation of national bioenergy
programs, drawing on FAO's experience in promoting national, regional
and global bioenergy development.
"The aim is to help us grow both enough fuel and enough food," Muller
said, "and make sure that everyone benefits in the process."
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