What are the impacts of biofuels production on food prices?

Between 2005 and 2008, the price of some food commodities rose significantly, with rice rising by 217%, wheat 136%, corn 125% and soy 107%[30]. This coincided with increasing biofuels production leading to debate on whether rising demand for biofuels crops is pushing up food prices.

What the science says

This has led to many highly reputable, in-depth reports. Most models show that expanding biofuel use in the EU27 has contributed only a little to the cereal price increases in 2007 to 2010, with wheat and coarse grain prices increasing by about 1-2%, and non-cereal food commodities by about 4%, notably through demand for vegetable oil in the production of biodiesel[31]. The World Bank estimates an average of 7%[32]. Therefore, the introduction of biofuels may affect food prices but there are many different estimations and the impact varies across crops and locations.

Agricultural markets are complex, and it is difficult to demonstrate the precise impact of each factor but the 2005-2008 spike was likely influenced by many factors, other than biofuels, including a global commodity boom, oil prices, rising demand, poor weather, low stock levels, export bans, depreciation of the dollar, and market speculation[33], [34], [35], [36].

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Is biofuels production affecting local food production and availability?

The World Health Organisation defines food security as “when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life[37], [38], [39].

What the science says

Many studies, including by the European Commission, show little concrete evidence of biofuel production causing local food price increases or impacting local food security in the countries where they are grown [40], [41].

How biofuels can help food security…

Different initiatives, such as the UN’s Bioenergy and Food Security Approach, have demonstrated that integrating biofuel production into wider agricultural modernisation through better use of land, water, labour and resources, can even have positive impacts on household food security[42].

This can be reached through different types of business models[43] and access to markets may also help secure access to food.

Agricultural development to produce more food can be promoted by biofuels production through rural development and expanding markets for agricultural products. Biofuels should not be construed as having only negative impacts on rural development and competition with land[44], [45], [46].

Is there enough land to produce biofuels and food?

According to statistics from the UN’s Food and Agriculture Organisation, there is an approximate total cropland of 1,500 million hectares globally. Biofuels use a relatively small proportion of global agricultural land – around 30 million hectares of land, or 2%[47].

Pastureland is most of the time not considered in this cropland characterisation (an approximate 3,500 million hectares) and could also be used to produce food and biofuels.

Availability of marginal lands is estimated between 56–1,035 million hectares which could add between one-third and two-thirds to the amount of land current farmed[48].

A closer look at the figures

These estimates – which are more optimistic than in the past – depend on the type of scenarios and data use which can affect their outcome

  • They are mainly developed to see how to achieve targets within the EU policies
  • There can be uncertainties and bias[49], [50]
  • These different estimates see marginal land as a major contributor however, the definition of marginal lands may vary from one country to another

However, the EU’s Renewable Energy Directive[51] includes restrictions on the types of land that can be used for biofuels. Many biofuels sold in the EU are certified under voluntary sustainability schemes, which include criteria on ensuring that land rights are respected[52].

How much bio-energy could be available in 2050?

The UN’s Food and Agricultural Organisation expects global demand for food to increase by 70% to 2050 due to a rising global population, increasing incomes, and changing diets. However, more land is expected to become available for biofuels in the future, even after increased food demands are met[53].

Many studies now agree that that there will be a substantial potential for biomass in the longer term once food demands are satisfied. The Intergovernmental Panel on Climate Change estimates that this potential is at least 100 exajoules (EJ) of energy – or a fifth of current global primary energy demand[54]. Alternative modelling assumptions have led to estimates of technical potentials exceeding 1,000 EJ/yr[55], [56]. However, different views about sustainability and socio-ecological constraints lead to very different estimates, with some studies reporting much lower figures.

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What about indirect land use change (ILUC)?

The facts behind the research

The discussion about ILUC became a hot topic when Tim Searchinger claimed that ILUC adds 104 g of CO2 equivalents per MJ to corn ethanol’s carbon footprint – higher than the total carbon footprint of gasoline[57].

The Searchinger study has since been criticised for a number of shortcomings. As science has progressed, estimates of emissions arising from ILUC have decreased drastically, from 104g CO2 e/MJ by Searchinger[58] to 15g CO2 e/MJ in 2010 by Tyner et al.[59].The International Food Policy Research Institute has estimated ILUC factors related to the Renewable Energy Directive resulted in 12g CO2 e/MJ in 2011[60].

Difficulties modelling ILUC impacts

It is not possible to measure ILUC impacts directly as complex models which simulate the global economy, agricultural markets, and land use are needed. These models give a wide range of results[61], [62] as can be seen in the example below where values from models measuring GHG emissions due to ILUC are compared.

Source: Ahlgren, Di Lucia (2014) 90

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Nevertheless, models show that estimates of GHG impacts made at the beginning of the ILUC debate are generally much higher than now[63]. The emerging consensus is that many biofuels have a low ILUC risk, especially advanced biofuels[64], [65], [66]. The overall trend is that bioethanol has typically lower ILUC-related GHG emissions than biodiesel, and sugarcane-based ethanol has the lowest among conventional biofuels.

Despite this, the European Commission considers ILUC results too uncertain to provide a reliable basis for adding ILUC factors to the well-to-wheel emissions assessed in EU biofuels policies.

How the EU is addressing sustainability

Sustainability criteria for biofuels set by the EU’s Renewable Energy Directive[67] include restrictions on the types of land that can be used. Many biofuels sold in the EU are certified under voluntary sustainability schemes, which include criteria on land use. For example biofuels cannot be grown on wetlands, forests or highly biodiverse grasslands[68].

In addition, starting in 2017, biofuels must meet a GHG reduction target of 50%, and 60% for new plants, below petrol and diesel in order to comply.

How can biofuels be part of a sustainable bio-economy?

The International Energy Agency analyses show that biofuels are very important if the world is to make meaningful reductions in CO2 emissions[69], but highlights how adding additional uses for crops and land beyond the traditional will require distinguishing between different types of feedstocks and ensuring efficient land-use to meet growing demand.

To ensure a sustainable bio-economy where food and other bio-based products reach markets at prices people can afford we can: