Memorandum submitted by Bayer CropScience
Ltd
1. BAYER CROPSCIENCE
Bayer CropScience is dedicated to the development
and production of safe crop production solutions for the food
and farming industry. It has a long history in the agricultural
world, and has developed to its current position as one of the
world's leading life science businesses via such well known names
as Boots, Fisons, May & Baker, Schering, Hoechst, Rhône-Poulenc,
AgrEvo and Aventis. Bayer CropScience employs 18,800 members of
staff worldwide and approximately 600 in the UK.
Bayer CropScience Ltd is a member of both the
Crop Protection Association (CPA) and the Agricultural Biotechnology
Council (abc); please note that Bayer CropScience fully supports
the submissions of both these bodies on this subject.
2. GENERAL COMMENTS
Bayer views a positive response to global warming
as key to a sustainable future. Internationally, Bayer has been
assigned to the Dow Jones Climate Leadership Index—"in
recognition of its efforts to reduce so-called greenhouse gases",
and has already reduced such emissions worldwide by more than
60%. Bayer Industrial Services and Bayer Technology Services has
been involved in the building of, and the technology used in the
running of, biodiesel plants in Germany.
Bayer CropScience is therefore committed to
helping farmers exploit the opportunities arising from the growing
demand for biofuels grown in the UK. Bayer CropScience has an
excellent portfolio of products to enable farmers to produce the
high yields of energy crops that are required for an economically
viable biofuels industry in the UK. The company continues to invest
highly in this area.
Bayer CropScience is also setting the standard
in product and environmental stewardship. We believe that with
the advent of the proposed "Carbon Certified Crops",
Bayer CropScience can help farmers achieve high yielding crops
whilst minimising their environmental impact.
Bayer CropScience believes that it is critical
that there is a favourable and sustained economic environment
to help this fledging industry to flourish.
3. RESPONSES
TO SPECIFIC
QUESTION POSED
1. 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?
Bayer CropScience believes that any strategy
associated with agricultural production should be sustainable
in the following three respects:
— Economically viable—the current
renewable transport fuel obligation put in place by the UK Government
requires that biofuels be part of the UK transport fuel mix. By
definition, therefore, biofuels have some economic viability as
fuel companies are required to source them. Clearly, if biofuels
are to be sought from UK feedstocks, then farmers "farming
for fuel" in the UK will have to compete with their European
and global counterparts.
— Environmentally responsible—farming
for fuel should have the same constraints on the environmental
footprints as food production. However, this is not considered
to pose significant problems to UK farmers since the crops involved
tend to be used for food and fuel rather than one or the other.
The problem comes if the environmental footprint for fuel production
is expected to be less than that for food production. This threatens
the ability of UK farmers to compete with their European and global
counterparts, who are not restricted by such additional burdens.
— Socially acceptable—clearly,
there have been a number of reports in the media on the suitability
of some biofuel sources, and the cutting down of forests for "biofuel
plantations" has some clear social as well as environmental
implications. The social acceptability of using food crops for
fuel may also be problematic if handled insensitively.
2. 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?
— Bayer CropScience views the current
European framework for the sustainability of biofuels as a credible
attempt to reduce (not eliminate) greenhouse gas emissions from
road transport fuels, to reduce potential fossil fuel shortages
and to increase fuel security, by bridging the gap between the
current situation and second or third generation energy supplies.
— The current regulatory process surrounding
European agriculture means that the environmental safeguards are
already in place for the growing of biofuel feedstocks in Europe,
and that further, more specific regulation is not warranted and
risks reducing the competitiveness of UK or European farmers vis-a"-vis
their global counterparts.
— Carbon accreditation of biofuel feedstocks
is a credible attempt to allay concerns regarding the provenance
of the supply but may be viewed as problematic in terms of international
trade agreements and rules.
— Bayer CropScience is a member of
the Low Carbon Vehicle Partnership and supports its objective
of accelerating the shift to low carbon vehicles and fuels in
the UK and to help ensure that UK business can benefit from
that shift.
— Bayer CropScience believes that farmers
should be able to access new technology to help them produce high
quality affordable biofuels in a way that minimises their environmental
footprint. Such technologies include the judicious use of innovative
pesticides and the development of genetically modified crops.
3. 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?
— Bayer CropScience believes that the
Roundtable on Sustainable Palm Oil is a positive initiative encouraging
sustainable farming practices and should be supported.
— Furthermore Bayer CropScience believes
that industry cooperating with NGO groups can achieve a rapid
and more effective response to the need for environmental standards
in biofuel production than attempts at international regulation.
4. 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
for biofuels?
— Bayer CropScience has a business
model relying on innovative products to solve farming problems.
Innovative companies will always invest in areas where there is
some certitude in the regulatory framework of an industry and
where innovation is rewarded. The biofuels industry will respond
innovatively to the challenges set.
— Tripartite groups and partnerships,
such as that between British Sugar, Dupont and BP demonstrate
that feedstock suppliers, innovation and fuel suppliers can investigate
issues surrounding the use of products such as bioethanol. Likewise,
it is perfectly reasonable to expect other innovations to follow.
— Whilst it may be true at the moment
that the climate change benefits of solid biofuels outweigh those
of liquid biofuels, it is also true that in the short term, UK
farmers will find it easier to "plug" the demand for
liquid biofuels since:
— their experience of growing annual
crops in rotation is far greater than that associated with willow
coppicing or the growing of, for example, Miscanthus; and
— the supply chain for delivering seed
to and moving products from the farm gate is well established
for fuel crops which can double up as food crops, than the movement
of bulky biomass as solid biofuels.
— It is also clear that the land use
for food or fuel debate is alleviated somewhat when a crop can
be used for fuel and food. In times when food security is an issue,
solid biomass originally earmarked for fuel use cannot be reassigned.
— Current UK and EU policy on biofuel
obligations will go a long way to achieve the inclusion rates
targeted. Whether the targets themselves are met or exceeded is
immaterial.
— It is clear that the fiscal arrangements
for biofuels in other countries generally exceed those found in
the UK. However, by implementing a transport road fuel obligation,
the cost of biofuel promotion is shifted from the taxpayer to
the fuel user.
5. 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?
— Bayer CropScience believes that UK
agriculture has the ability to produce a large proportion of the
UK's demand for biofuels.
— Tripartite groups and partnerships,
such as that between British Sugar, Dupont and BP demonstrate
that feedstock suppliers, innovation and fuel suppliers can integrate
biofuels into the UK fuel supply chain.
— Bayer CropScience believes that biofuels
have a role in improving fuel security in the UK although it is
unlikely that sufficient production of fuel feedstocks is possible
for biofuels to replace more than 10% of current fossil fuel use
in the medium term without either a significant increase in the
productivity in current land use or a significant reduction in
food security.
6. 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?
— Bayer CropScience held a one-day
workshop on the issue of fuel versus food security—please
see attached proceedings. What is clear is that farmers will respond
to exterior factors, and especially the effects of supply and
demand on commodity prices. Thus a massive shift from wheat to
maize in the US, as a result of federal promotion of bioethanol
production, coupled with a reduction in wheat harvests in Australia
and Canada, has raised wheat prices to their highest levels in
a decade. This can only be exacerbated with more bioethanol production
using wheat as a feedstock coming on line in the UK. Likewise,
the value and therefore price of other feedstocks such as vegetable
oil will be impacted.
— Farmers are therefore more likely
to grow crops that give them a favourable return on their investment.
— However, a shift towards renewable
fuels does reduce the carbon footprint of road transport, if high
yields of feedstocks can be produced with a minimal environmental
footprint. Bayer CropScience is researching how this can best
be achieved and in addition is developing crops which will deliver
a high yield under stressed conditions.
7. 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
sector?
— Bayer CropScience believes that the
provision of biofuels offers farmers a viable alternative to food
production. As a result, the biofuel production has the possibility
of revitalising parts of UK agriculture with a concomitant improvement
in the rural economy.
— Micro-production of biofuels is a
viable proposition and has proved popular in countries such as
Germany. However, the economies of scale, which really has a large
impact on reductions of greenhouse gas emissions, involve large
scale investments in the industry. It is not surprising therefore
that large companies are involved in all parts of the supply chain.
2 October 2007
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