AGRICULTURAL SUBSIDIES
18. There are a range of subsidies that directly
or indirectly support the production of biofuel feedstocks. Indirect
subsidies include the Single Farm Payment and the Entry Level
Environmental Stewardship Scheme that pay farmers per hectare
of land. Direct subsidies include the Energy Aid Payments Scheme,
for which farmers can receive 45
per hectare for growing biofuels on non set-aside land. Farmers
can also grow biofuels on set-aside land and still receive set-aside
payments.[16]
19. In October 2007 the Global Subsidies Initiative
(GSI) published its report Biofuels
- at what cost? Government support for ethanol and biodiesel in
the European Union. It found that in 2006,
the EU and individual Member States subsidised biofuels by around
3.7 billion taking into account (as far as possible) all
support mechanisms such as excise tax exemptions, capital grants
and R&D. Where a subsidy could not be directly tied to biofuels,
but which would nevertheless still subsidise biofuel production,
such as agricultural support through the Single Farm Payment,
the subsidy was not counted and therefore the figure given is
likely to be an underestimate. Added together this is the equivalent
of 1.1 per litre of ethanol, and 0.55 per litre of
biodiesel. This puts the cost of obtaining a reduction of one
tonne of CO2 equivalent, using ethanol from sugar beet,
at between 575 and 800 (approximately £403 -
£570) and over 600 (£428) for biodiesel made from
rapeseed. Table 2 gives the cost per tonne of CO2 equivalent
under a range of different feedstocks and production processes.
Table 2: Greenhouse gas emissions reduced through the use of ethanol
and biodiesel in selected OECD countries (£ per metric tonne of CO2-equivalent)