Memorandum submitted by the National Farmers'
1. The National Farmers' Union represents
the interests of some 55,000 businesses which are engaged in a
diverse range of agricultural, horticultural and related activities
throughout England and Wales. We welcome the opportunity to present
our views on The Environmental Audit Committee's inquiryAre
Pursued in the correct manner, biofuels can
lead to a number of positive social, environmental and economic
benefits. The NFU believe that to ensure these benefits are captured,
and in order to minimise potentially negative consequences, the
industry should indeed be regulated. In so doing however, care
should be taken to ensure regulation is simple, working within
existing structures wherever possible, transparent, comprehensible
and based on proven science. This is the only way to ensure real
carbon savings are achieved, with effective safeguards implemented
to ensure minimum sustainability standards are met. In this regard
it should be recognised that the UK is leading the way, setting
high standards for biofuel production with incentives for further
improvement over time. However, there is a danger that the standards
are set too high and inadvertently stymie the growth of the industry;
above all therefore, it is imperative that regulation is based
on realism, particularly at the outset. Furthermore, clear long-term
targets are imperative to encourage investment into the industry.
The UK's farm assurance schemes will ensure
that domestically supplied feedstock will meet stringent sustainability
standards. Applying these standards to imported biofuel/feedstock
will only provide the incentive for international reporting and
improvement in sustainability standards further a field if they
are taken up by other countries. Otherwise we run the risk of
"pricing" ourselves out of the market to no benefit.
It is therefore imperative that carbon and sustainability standards
are adopted across the EU.
The UK biofuels industry will only benefit from
the kind of impressive efficiency gains experienced by Brazil
and the US as the industry progresses. Once established, increased
investment into R&D will ensure improvements in both producer
and processing efficiency. The development of second generation
biofuels on a commercially viable scale is several years away
we are told, but the potential to extract significantly larger
volumes of fuel per hectare of land is vast. There are several
reasons why we should progress with current technology in the
meantime. Biofuels currently provides the only practical and viable
method of addressing the environmental impact of the road transport
Diversion of the UK's average wheat export levels
to a domestic biofuels industry could go as far as meeting half
the 5% RTFO target in 2010-11. In addition, use of set-aside land
and technological advances that can be expected as the industry
gets up and running will ensure that UK feedstock can go even
further to meeting the targets set under the RTFO. The NFU accept
that imported feedstock will play an important role in meeting
targets, and by diversifying our sources of energy supply, a globally
developed biofuels industry will help spread supply risk and thereby
improve the UK's fuel security.
A combination of export diversion, the use of
idle agricultural capacity, improvements in the efficiency of
land use and imported feedstock will ensure that UK food production
will not be affected by a domestic biofuel industry. Even a scenario
whereby UK agriculture has reached resource and productive capacity,
market forces will ensure that food production remains paramount.
The point about idle agricultural capacity applies globally too;
potential export diversion by major feedstock producers/exporters
will introduce an upward price pressure, bringing hitherto economically
unviable land back into economic production. As long as there
is spare capacity for an expansion in agricultural production,
international food security will not be affected and in theory
should well improve as poorer countries move away from over-reliance
on aid towards becoming more self-sufficient. There may also be
opportunities for developing countries to improve fuel security
and develop export potential, all of which will lead to a reduction
As for price, any upward price movement will,
all things being equal, lead to an increase in output according
to the traditional cyclical and correlated price-production relationship.
Effectively, this will ensure that prices, to a certain degree,
will automatically self-correct as market supply catches up to
increasing demand, preventing prices spiralling out of control.
Again, there is vast resource capacity to increase feedstock production
to ensure supply keeps pace with demand.
A biofuels industry can quite uniquely play
a positive role in a number of different policy areas. However,
only a well developed and managed industry will ensure that such
benefits, in the areas of agriculture, rural development, the
environment, international development and energy are achieved.
What are the possible positive and negative social,
environmental and economic consequences of biofuels? How might
trade-offs between climate benefits and environmental and social
impacts be made? Is there a need to develop a new biofuel strategy
for the UK or EU, to balance the environmental, social, economic
and climate impacts of biofuels?
1. A number of key factors in support of
biofuels are valid, including the ever present pressure to act
in mitigating climate change. Biofuels are the most immediate,
practical and available means of reducing greenhouse gas emissions
from road transport fuelan area that continues to rise.
Security of supply is high on the energy agenda for many European
governments, and volatile prices for fossil fuels reinforces the
need to pursue a more diverse energy supply, of which biofuels
can form a significant contribution. Using renewable biomass materials
to produce fuel lends itself to agriculture with potential rural
development benefits from diversification of markets.
2. Land management in the UK is highly regulated
with controls over change of use between permanent pasture or
woodland and arable farming, along with social and environmental
legislation. This is backed up within the EU support scheme (SPS)
for agriculture with cross-compliance measures linking a number
of statutory and additional standards to financial penalties to
if not adhered to by farmers. Members of the combinable crop assurance
schemes in England and Wales are also obliged to engage fully
with the Voluntary Initiative, which helps to ensure protection
of crops and the environment. Modern farmers are acutely aware
of their environmental footprint and more than 50% of farms in
England with over 7.5 million ha of land are now covered by targeted
agri-environment schemes in the UK.
3. The European Environment Agency estimates
that to meet current energy targets the EU needs 150 million tonnes
oil equivalent (Mtoe) from biomass by 2010. On very conservative
estimates Europe's potential environmentally sustainable production
is 190 Mtoe in 2010, rising to 295 Mtoe by 2030. The UK is one
of seven countries where the potential is greatest (with Spain,
France, Germany, Italy, Lithuania & Poland).
4. The term biofuels covers a wide range
of renewable fuels of varying sustainability and environmental
performance. There is a very real danger of biofuel production
causing environmental damage elsewhere in the world through the
destruction of rain forest and other natural habitat to make way
for crops like palm oil and sugar cane. However, NFU believes
this is an avoidable danger. Proportionate regulation is needed
to ensure production of feedstocks for biofuels does not lead
to negative consequences for the environment. This underlines
the importance of a practical and credible sustainability reporting
5. The NFU shares the belief of Friends
of the Earth that the answer is a certification standard, covering
both imported and home-produced biofuels. In January, FoE's Tony
Juniper commented in the Guardian newspaper that: "If we
are to reap the benefits of biofuels, we need some environmental
safeguards, such as protection for important ecosystems . . .
it seems to me that a certification scheme is needed."
6. Work on this is already well under way.
Since the DfT's Renewable Transport Fuels Obligation (RTFO) is
largely driven by environmental concerns, the biofuels industry
with NGOs is in the process of establishing and participating
in new standards for international commodity trade, such as the
sustainability criteria underpinning the RTFO in the UK. By "raising
the bar" for standards of production for renewable natural
resources, it is hoped that biofuels will become a major driver
for sustainable development, where other aspects of global trade
have so far failed.
7. There are many potential benefits for
developing countries which have large areas of productive land
currently lying idle as agricultural commodity prices have remained
economically unsustainable. Expanded markets for bioenergy should
re-introduce tension into the market and lift prices back to a
level where production becomes economic on a wider range of land
with more extensive production systems.
8. Wide stakeholder engagement in the UK
is now bringing about a new biofuel strategy, leading actions
in development among other Member States in the EU. Our main strategy
must be to provide strong support and incentives to develop sufficient
biofuels in both UK and EU. These strategies have been developed
intensively over the past two years with due environmental, social
and economic consideration. Initial development of biofuels could
be hampered by overly strict regulations brought in as safeguards
to perceived incidental outcomes. Such regulations should be proportionate
and address only the key concerns. Further tighter regulations
should be assessed in response to any genuine issues that develop.
Should biofuels be regulated to minimise the negative
environmental and social impacts, and in what way? How might regulation
fit in with international trade agreements and rules? Should there
be regulation of the entire carbon cycle of biofuels?
9. Biofuels should be regulated but it is
imperative that such regulations recognise existing trading practices
and work within international trade rules without displacing production
and potential environmental damage elsewhere. These Regulations
must be based on proven science that can be defended against trade
challenges with an even application of common standards that are
implemented to ensure sustainable and carbon-efficient production.
At the same time Biofuels should be regulated in a comprehensible
and transparent manner to ensure that theoretical carbon savings
are achieved in practice and incentives are in place to improve
efficiency. Sustainability controls are critical in ensuring that
production of feedstocks destined for biofuels is not reliant
on unsustainable practices.
10. The food industry has been largely unregulated
with respect to carbon savings and sustainability, with the notable
exception of EU agriculture and in particular UK environmental
legislation. Currently the overwhelming majority of palm oil goes
into food use, so restricting further development of biofuels
would not solve the problem of deforestationthis issue
is much bigger and requires independent measures.
11. Use of biofuel in the UK would widen
the reach of the high standards in place for those producing feedstocks
here, by raising the sustainability criteria for imported material
to an equivalent level. However, any new regulation needs to be
implemented over time. A lot of the proposed issues have not been
recorded before and will take time to develop efficient and trusted
12. Currently the main risk is that the
UK's opportunity to influence this new industry will be lost.
Where the bar is set too high, investment will not be made in
domestic processing facilities and the UK will be unable to influence
sustainability standards internationally.
13. Clear long term signals are a pre-requisite
as significant private investment is needed to supply the required
fuel, particularly in terms of market certainty. Any biofuel strategy
must take account of and fully integrate with other bioenergy
and renewable energy policy.
How successful are existing international structures,
such as the Roundtable on Sustainable Palm Oil, at ensuring that
imports of biofuels can be obtained from sustainable sources?
To what extent is it currently possible to identify the provenance
and production standards of imported biofuels?
14. Current reporting structures are variable
in terms of quality and uptake but the need to report on sustainability
of biofuels is driving the process forward. Reporting on these
issues is new and it will take time not only to develop effective
schemes that will address all the issues but to gain sufficient
uptake that will start to address any displacement concerns.
15. Globally, reporting and assurance systems
that specifically cover carbon and sustainability are in the early
stages of development. Palm oil, soybean and sugar cane schemes
are admittedly showing slow uptake but this is likely to be driven
further by the desire to meet biofuel sustainability reporting
demands in UK and potentially other EU MS also with schemes under
development. Standards in place for the UK alone may not provide
a strong enough market "pull" to effect this change.
16. In the UK, the most recent standards
under the Assured Food Standards (AFS) Assured Combinable Crops
Scheme (ACCS) are believed likely to meet the stringent sustainability
criteria within the UK RTFO, beginning in 2008.
17. Default values for carbon savings are
valuable in providing a baseline but in order achieve significant
progress from the baseline real data is required to be collected.
It will take time to develop the means of doing so in a cost effective
way. Use of defaults initially is not a justification to undermine
the whole system.
18. NFU shares the belief that an emphasis
on support for biofuels that can prove sustainability rather than
specific targets for carbon saving will be the fastest way to
bring in universal environmental standards in biofuels.
At what stage is biofuel technology? Is there
enough support for the development of biofuel technology? A UN
report found that the climate change benefits of solid biomass
fuels outweigh those of liquid biofuels. Are current policies
promoting the development and deployment of a range of biofuel
technologies? How successful have EU strategies and Directives
been in stimulating biofuel usage? Will the 2010 biofuel target
be reached? How effective are the Government's fiscal arrangements
19. Biofuel technology will make the most
important progress through experience gathered from the developing
industry. Efficiency gains have been impressive in those countries
with a history of converting renewable feedstocks to biofuels
such as Brazil and the USA.
20. There is and will be a continued need
for funding for R&D to help bring through new technology and
advanced biofuels. Continued improvement through practical experience
and investment in the industry will be the most effective way
to develop even more efficient biofuels.
21. Second generation biofuels is still
several years away from being commercially viable and that we
should therefore continue to implement current technology that
should provide a greater impetus for a second generation of development.
Parallel can be drawn with the internal combustion engine, which
did not take over from animal and steam power in a day.
22. Solid biomass used for heat and power
generation is indeed more efficient in terms of carbon-reduction
than current liquid transport biofuel technology. A major factor
behind this apparent difference in efficiency is the need to use
annual crops and produce transport biofuel from part of the crop,
while using another substantial fraction for quality animal feed,
rather than utilising all biomass produced for energy generation.
Data on carbon savings for animal feed use and displacement is
scant. It seems likely that future technology will improve efficiency
of biofuels and may introduce economic production that can utilise
all biomass for energy generation. However at present, and in
the near future, biofuels derived from annual crops are the only
economically viable renewable alternative to liquid transport
fuels. With this being the only sector with continued rising carbon
emissions, biofuels from annual crops must be used as a key part
of addressing carbon emissions in the road transport sector.
23. The latest figures available suggest
that this target will not be met by the EU as a whole. Certain
Member States will achieve 5.75% by 2010 (and indeed some are
on course to exceed it) but many will clearly not meet this target.
Many Member States have set targets well below EU indicative targets
(2% by 2005, 5.75% 2010) and do not have in place sufficient policy
incentives to achieve them. UK is a good example of a MS setting
a low target at just 0.3% (2005) and relying on an obligation
of 5% (by volume) by 2010 that equates to approximately 3.7% by
energy. This will not deliver 5.75% by energy by 2010.
24. There are a number of factors currently
favouring biofuel developments in the UK. These include the need
to reduce greenhouse gases to tackle climate change commitments,
continuing growth of transport emissions, a historically high
price for fossil fuels which is subject to substantial volatility,
security concerns over fossil fuel supply, particularly the EU
diesel production shortfall. In response there is a strengthening
EU policy and indicative targets for biofuel use and CAP reform
decoupling providing greater freedom to produce for the market.
25. Some of the main obstacles to making
progress in the sector are commercial and include the cost of
production for biofuels, the cost of investment required for biofuel
plants and need for certainty in the market for the long term,
some reluctance from oil majors to include biofuels particularly
where they are vertically integrated and do not wish to buy fuels
in. On a technical basis, biofuel inclusion limits in existing
EU fuel standards are currently limited to5% bioethanol,
5% biodiesel inclusion, but this is under review, and there can
be blending difficulties associated with bioethanol (high vapour
pressure & water absorbency).
26. While the actual impact of the combined
35ppl RTFO package is yet to be determined, the important thing
to note is that the relative viability of biofuel production is
changing constantly with changes in oil and feedstock prices/costs.
It is imperative therefore that the Government consistently monitors
the effectiveness of current fiscal arrangements and is prepared
to make adjustments that will maintain the incentive for oil suppliers
to blend biofuels rather than "buy-out".
The EU Strategy for Biofuels claims that biofuels
"are a direct substitute for fossil fuels in transport and
can readily be integrated into fuel supply systems". What
proportion of UK domestic transport and energy generation could
be fuelled by UK-produced biofuels? Is it possible for biofuels
to entirely replace oil for transport purposes? Is there a role
for public procurement or public transport? Will biofuels improve
fuel security? How secure are biofuel crops from unexpected events
such as drought or disease?
27. 5% of transport fuel could be met through
UK produced biofuels with current technology, yields and processing
efficiency. Over the 2003-05 period, UK wheat exports have averaged
2.8 million tonnes. This would suffice to produce 1.2 billion
litres of bio-ethanol, equivalent to 5% of future estimated petrol
demand. Bioethanol can also be produced from out of quota sugar
production. Prior to the reform of the EU sugar regime, average
UK "C" beet production was 1.4 million tonnes, enough
to produce a further 144 million litres of bioethanol. Much of
Britain's farmland has been under used and could be growing renewable
fuel. Set-aside land accounted for 513,000 hectares in 2006 and
bare fallow land amounted to 150,000 hectares in 2006. Where set-aside
has been reduced to zero for one year in 2007-08 this under used
capacity represents great potential for the UK to use some of
this land to increase biofuel production and move towards meeting
RTFO targets from domestic feedstock.
28. EU calculations suggest an 11% biofuels
contribution is possible by 2020. As technology advances, the
biofuel yield from land will increase and greater proportion of
UK transport fuel demand becomes possible. Meanwhile, 5% as a
start is a significant contribution, and this can be achieved
within current agricultural capacity. The alternative of waiting
for the perfect solution while road transport emissions continue
to rise misses years of potential mitigation of CO2 release.
29. New bioenergy crops or production systems
have potential to strengthen farming approaches that better preserve
soil and water resources. There is room to evaluate trade-offs
and win-win situations that exist between energy policy targets
and EU environmental objectives.
30. In practice, UK conditions offer some
of the world's highest, most secure, reliable and consistent yields
of starch and oil from combinable crops. We realise that biofuels
will not be able to totally supply UK demand for transport fuels
and energy but will have a major part to play in a package of
secure, renewable and sustainable energy production in the short
to medium term where few alternatives exist.
31. The UK needs to make full use of the
raw material that UK can providethis requires a range of
technologies many of which can draw significant synergies. Isolated
thinking and disputes between rival technologies have done little
to take forward a progressive strategy. One of the important factors
of a secure energy supply is diversity. Over-reliance on one technology,
source or supplier is a dangerous route to take.
32. First-generation biofuels provide an
excellent buffer for food cropsthey can be easily switched
into food production if necessary as a result of unexpected events.
33. This means biofuels are unlikely to
have more than minimal impact on food markets as domestic food
production will always be the major market for UK producers. A
scenario where UK devotes the majority of its production capacity
to biofuels, ignoring food production and leaving the country
to import the majority of its food is simply not going to happen.
Market forces will dictate and the food market will always be
king. Domestic processing of feedstock to make biofuel in the
UK offers at least an equivalent volume of high quality animal
feed co-product. If the feedstock was not processed in the UK,
it would continue to be exported and this co product would not
be available domestically as an animal feed.
Is there a role for public procurement or public
34. Transport operators including Virgin
Trains and Tesco distribution, and bus operators from Stockholm
to Reading and London have operated vehicles on blends of biofuels
up to 95%. Somerset County Council and a number of public utilities
and services in the South West region are using high-blend (E85)
Will biofuels improve fuel security?
35. The UK's dwindling indigenous energy
production has meant a return to net importer status in recent
years. Between 1981-2003 the UK was a net importer of energy in
only four years (1989-92 inclusive), otherwise exporting up to
50 million tonnes oil equivalent (Mtoe) of energy per annum. Since
2004 however, the UK's net energy imports have risen dramatically
to 52.5 Mtoe, a dependency ratio of 21%. Forecasts suggest the
UK will continue to become more reliant on imported energy as
time progresses. According to official ONS data, the UK has approximately
13 years of oil reserves left and 11 years of gas reserves (from
36. The advantage of biofuels over fossil-based
transport fuels, from a fuel security point of view, is two-fold.
As a renewable source of energy, biofuels can be produced almost
anywhere in the world where agricultural production is already
established. This gives the UK a chance to establish an indigenous
industry that will relieve dependence on imported transport fuels,
albeit to a limited extent. Furthermore, as the global industry
develops, the UK will have an increasing number of potential trade
partners from whom to source imported biofuels. The opportunity
to diversify supply sources and thereby spread supply risk undoubtedly
increases the UK's fuel security.
What impact would an expansion of UK production
of biofuels have on the ability of the UK to produce its own food?
How might this impact on greenhouse gas emissions from international
trade patterns? What impact might the expansion of biofuels have
on international food security and prices?
37. The impact of a developing biofuels
industry on the UK's indigenous food production should be minimal.
Firstly, it is important to note, as we have done previously,
that the UK is traditionally a net exporter of wheat, the primary
feedstock for bioethanol production. As described above, the UK's
average wheat exports, if diverted to domestic bioethanol production,
could go as far as meeting half the RTFO obligation in 2010-11.
Export diversion will of course have no impact on the UK's food
security or self-sufficiency.
38. Secondly, the UK has spare agricultural
capacity to increase feedstock production to meet growing demand
for biofuel production (or food, depending on prevailing market
conditions). The Commission's announcement to reduce set-aside
to 0% next year will bring 513 thousand hectares back into potential
agricultural production. The EU is committed to abolishing the
set-aside principle entirely in the medium term. Furthermore,
as the biofuel industry develops, investment into research and
development will almost certainly ensure production and processing
efficiency gains that ensure we are able to extract more energy
from each hectare of land.
39. Thirdly, the NFU accepts that a domestic
industry is highly likely to source a proportion of imported feedstock.
Again, this will have no impact on the UK's ability to produce
crops for food.
40. Even if the UK faces the highly unlikely
scenario in the future whereby agricultural land use has reached
capacity (ie all sustainable agricultural land is under production)
and imported feedstocks are for whatever reason prohibitively
expensive, the NFU does not believe that food security will be
affected. Ultimately, domestic food production will always be
the major market for UK producers and market forces will ensure
that food requirements are met before those of biofuels.
What impact might the expansion of biofuels have
on international food security and prices?
41. Basic economic theory tells us that
an increase in demand for a good, assuming supply does not increase
by the same proportion, will lead to upward price pressures for
that particular good. In theory, increasing demand from the biofuel
sector may lead to upward price pressures in the short term. However,
as long as there is an adequate supply of productive agricultural
land, this should not be an issue in the medium to longer term
as producers respond to market signals.
42. The supply-price relationship in liberalized
agricultural markets is very much cyclical and correlated. Farmers
respond like rational economic agents, increasing production of
a good when its price increases, the net effect being a degree
of self-correction in the market, with price coming back down
in response to greater supply. Through the notion of "decoupling"
subsidy from production in the 2003 CAP reforms, EU farmers should
and will respond to a greater degree to such market signals.
43. This, of course, assumes adequate supply
of idle agricultural land. Neither Western nor global land use
has reached anywhere near capacity. As such, there is plenty of
slack on the supply-side to be able to meet an expansion on the
demand-side. The EU's recent announcement to set the rate of set-aside
to 0% will potentially bring back into production a total of 3.8
million hectares of land across the EU. While there is idle land,
an expanding biofuels industry should not have a lasting impact
on the price of food.
44. The relatively high levels at which
commodity prices currently stand are very much due to supply-led
factors, consequences of relatively poor harvests in major exporting
and producing countries such as the EU and Australia, in both
2006 and 2007. Global wheat output for the 2006 harvest at 590
million tonnes fell 30 million tonnes short of the previous year.
Relatively high prices have resulted due to this supply-shock,
rather than anything to do with a major increase in demand for
wheat, from the biofuels industry or elsewhere.
45. Similarly for maize, the major ethanol
feedstock for bioethanol production along with sugarcane, current
price rises are often incorrectly attributed to the fast-developing
US industry. While the International Grains Council forecasts
a 32 million tonne increase in 2007-08 maize for bioethanol use
in the US, farmers are simultaneously increasing their maize acreages
to match this demandoutput is forecast to rise to a record
330 million tonnes in 2007to the point that August IGC
forecasts suggest a rise in US maize exports. This illustrates
that the US has not eaten into its traditional exportable surplus
of maize, and thereby has not contributed to the global tightening
of maize markets.
46. In terms of the physical availability
of agricultural commodities, the potential diversion of exports
to biofuel production in developed countries should, in theory
help to stimulate greater local production in developing countries.
While food security and self-sufficiency are different objectives,
the former is a function of both a critical level of indigenous
production (ie a minimum level of self-sufficiency) and diversity
of supply. It is quite safe to conclude that the level of indigenous
supply is so low in the poorest countries of the world that an
increase in self-sufficiency would necessarily lead directly to
an increase in food security.
How might farm viability in both developed and
developing countries change with an expansion of biofuels? What
implications are there for poverty in developing countries? Should
we be concerned about large monopolies forming in the biofuel
47. We have shown that the size of the current
biofuels industry has had a negligible impact on both price and
quantity of cereals on the export market to date. However, as
more land is given over to biofuel production over time, we may
see this situation change, with some major developed country exporters
diverting feedstock away from export markets to domestic biofuel
industries. What will be the impact of this on developing countries?
48. The NFU suggests that such a scenario
creates an excellent opportunity for farmers in developing countries.
For at least the last 30 years, Europe's farmers have stood accused,
through their association with the Common Agricultural Policy,
of over-producing and dumping their surpluses with the aid of
export subsidies on over-supplied world markets, so depressing
market prices and contributing to poverty and starvation in poorer
countries. Export diversion by developed countries should allow
developing country farmers to produce for their own markets. A
reduction in global exports will lead to upward price pressures,
thereby making marginal land in many poorer countries economically
productive. And this is where the vast majority of idle capacity
is. Current estimates suggest a total of 490 million hectares
of spare agricultural capacity in Africa alone. Taken one step
further, increasing biofuel production in developed countries
may create an opportunity for poorer country farmers to supply
ever-increasing global feedstock requirements. An opportunity
to engage in trade will better help to reduce poverty in the long
term than the current over-reliance on aid.
49. Of course, there is a balance to be
struck, as the United Nation's Food and Agriculture Organisation
(FAO) has recognised. In a statement issued in 2006, its Senior
Energy Co-ordinator, Gustavo Best, said of bio-energy:
"Farmers, particularly in tropical areas
are seeing new opportunities for increasing production and raising
their incomes. But we also have to be careful. We need to plan.
Competition for land between food and energy production needs
to be converted to positive common benefits."
50. An appropriately managed biofuels industry
has the unique potential to marry together agricultural, energy,
environmental and international development goals. Developed nations
with biofuels expertise will be able to promote international
development through technology transfer, investment in feedstock
and/or biofuel production in third countries, while at the same
time reducing GHG emissions and improving energy security.
51. There is of course also a need for developing
countries to increase their own fuel security. The poorest nations
in the world are worst affected when the price of oil rises. The
Foreign Policy Centre estimates that a sustained $10 increase
in the price per barrel of oil can reduce the GDP of some African
countries by as much as 3% the following year; 38 of the poorest
47 nations are net oil importers, 25 of which are almost entirely
dependent on oil imports. Technology transferbiofuels as
an aid for developmentcan help some of these countries
to increase their own energy security and shield themselves to
a greater degree from the fluctuations of the price of fossil
52. Ajay Vashee, the President of the Southern
African Confederation of Agriculture Unions (SACAU) has confirmed:
"Biofuels provide a huge new opportunity
for our farmers to augment incomes, although we will have to tread
carefully as we embrace this new technology. It is also expected
with BioFuel production, for surplus global stocks of agriculture
commodities to be eliminated, creating an additional market for
the production of agriculture products, in Africa. Regardless
of its application; production of commodities for, food, fibre
or energy, better prices would greatly contribute towards Africa's