Select Committee on Environmental Audit Written Evidence

Memorandum submitted by James Levy

  Re: the dangerous adverse consequences of the present combination of biofuel incentives and free trade policies.

  I would like to testify that:

  1.  Attempts to reduce climate impacts using biofuel incentives are being frustrated by subservience to a free trade agenda on the source commodities both by the UK and EU as a whole.

  2.  In particular, it is strongly evidence that the current free market policy on vegetable oils means that biodiesel incentives are having a dramatically counter-productive effect, since:

    2.1  palm oil grown in tropical countries is able to undercut all other potential large-scale sources of new supply.

    2.2  the additional market for palm oil is pushing its market price and leading to massive speculative forest clearance for new plantations.

    2.3  deforestation itself, and oxidation of peat beds accelerated by forest clearance, are very considerable sources of carbon dioxide discharges, while the forests and peat beds are valuable carbon sinks, but conventional biofuel life cycle emissions models do not account for this.

    2.4  the effect of these massive discharges is to narrow, not widen, the window of opportunity to stabilize greenhouse gas levels below a critical threshold.

    2.5  in addition, the loss of precious natural heritage (orang-utan) and displacement of native peoples must be considered.

  3.  The effect of the free market is that even if the government disqualified palm oil from the Renewable Transport Fuels Obligation, the additional demand for veg-oil would create new demand for palm oil in the wider veg-oil market.

  4.  Incentives for soya oil are also being criticized for encouraging forest displacement.

  5.  The consequences of incentives for bioethanol replacing petrol are more complex and unclear, but are still deserving of scrutiny.

  6.  The government has not taken adequate account of, and has sometimes omitted reference to, major adverse consequences of current biofuels policies:

    6.1  The 2006 Budget (item 7.67) has not disqualified any kind of imported biofuels from the Fuel Duty Discount. This creates a boundless market for imported biofuesl, in particular palm and soya oil, beyond the dictates of the EU biofuels directive and regardless of their adverse consequences.

    6.2  The 2006 Budget (item 7.66) stated that it intends to increase biofuel incentives after 2010-11 subject to infrastructure, vehicle capabilities nad cost, while "ensuring biofuels are sourced sustainably" (7.68) with no caution expressed or mention of potential adverse environmental consequences.

    6.3  The 2005 Pre-Budget Report (item 7.54) announced consultations with "stakeholders" over the implementation of biofuels incentives, but not with conservationists or anyone else.

    6.4  "Climate Change, The UK Programme 2006" report notes that emissions savings are lower than headline due to the agricultural and processing costs (section 5 Transport, 17). However, such models do not allow for the massive carbon discharges when rainforests are displaced, or loss of their value as carbon sinks, which is occurring considerably in practice (see 2.1-2.3 above).

    6.5  The plans to encourage sustainable supply (ibid, 21-23) appear insufficient to deter the displacement of the additional demand for veg-oils on to new forest clearances for palm oil (as set out in 2 above) in the current free market approach to the supply commodities adhered to by the UK nad wider EU.

  Appendices [not printed]

  1.  "Worse Than Fossil Fuel", article b George Monbiot in The Guardian, 6 December 2005, pages 1-3.

  2.  Canadian government report "Vegetable Oils: Competition in a changing market", 10 June 2005, pages 1,4,14.

  3.  "CPO Prices Seen UP in 06 As Biodiesel Fuels Demand", Dow Jones Newswires, 24 February 2006 pages 1-2.

  4.  "Asian peat fires add to warming", BBC News, 3 September 2005 pages 1-2.

  5.  "Soya is not the solution to climate change", letter by WWF-Brazil to The Guardian, 16 March 2006.

  6.  "EU must ensure bioenergy is really green", press release by Birdlife (international federation of bird protection societies), 7 December 2005.

April 2006

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