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Tuesday, April 15, 2008

Biofuel Rule Will Do More Harm Than Good, Oxfam Says (Update1)

April 15 (Bloomberg) -- U.K. fuels for cars and trucks must contain biofuels starting today, a move that may do more harm than good to the environment and drive food prices higher, charities including Oxfam and Greenpeace said.

Under the Renewable Transport Fuel Obligation, suppliers must ensure that 2.5 percent of fuel sold at U.K. pumps consists of biofuels, which are made from crops and grasses. The requirement will rise to 5 percent by 2010. The Department for Transport says the plan will cut carbon-dioxide emissions by 2.5 million metric tons a year.

Scientists in the U.K. and U.S. have found that the cultivation of biofuels can increase the output of CO2 and other gases blamed for global warming because of changes in land use. U.K. Prime Minister Gordon Brown last week wrote to leaders of the Group of Eight nations to say the government is concerned that biofuels are pushing up food costs around the world.

``The sorts of problems that biofuels are causing are irreversible,'' Robert Bailey, policy adviser to the development charity Oxfam, said in a telephone interview. ``If rainforest gets chopped down, it's gone forever. If somebody loses access to food, they become malnourished, their physical and mental development is impaired and they may die.''

Tailpipe emissions from burning biofuels are about the same as those from fossil fuels, the transport department said. The carbon savings are made because the crops for biofuels are replanted, taking the same amount of CO2 out of the atmosphere as burning them puts in. Depleted oil fields don't absorb CO2, as do plants such as corn and wheat used for biofuel stock.

Food Prices

The policy ``helps send a message to industry that it is worth their while to significantly invest in improving existing biofuels and accelerate the development of new ones,'' Jeremy Woods, a scientist with Royal Society biofuels working group, said in a statement. The society is the U.K.'s national science academy.

Food prices have increased 83 percent in three years, according to the World Bank. The rising costs of both food and fuel have caused tensions and riots in developing nations including Haiti, Burkina Faso, Egypt, Indonesia and Ivory Coast.

According to Oxford-based Oxfam, the U.K. policy will cost taxpayers 500 million pounds ($1 billion) a year, and may lead to 60 million people being forced from their land to make way for biofuel plantations. About 30 percent of recent food price inflation can be attributed to biofuel production, the group said, citing the International Food Policy Research Institute.

Sustainable Plantations

Both Oxfam and the environmental campaign group Greenpeace called the policy ``reckless,'' because fuel providers are not yet obliged to source biofuels from sustainable plantations.

``Right now, rainforests are being destroyed to make way for biofuel crops in places like Indonesia,'' Belinda Fletcher, forests campaigner at Greenpeace, said in an e-mailed statement. ``This destruction leads to massive greenhouse-gas emissions and completely undermines the point of these so-called green fuels.''

Deforestation accounts for about a fifth of the world's greenhouse-gas emissions, according to Greenpeace. Destruction of peatland forests in Indonesia, driven by the expansion of plantations of the biofuel palm oil, now contributes about 4 percent of global emissions, the group said.

Converting new land to cultivate fuel crops can cause emissions of carbon dioxide 420 times greater than the annual savings, U.S. scientists said in the journal Nature in February. A U.K. parliamentary committee said Jan. 21 that the European Union and U.K. should scrap targets to expand the use of biofuels because of the potential harm to the environment.

New Agency

Transport Secretary Ruth Kelly on Nov. 5 said the government was setting up the Renewable Fuels Agency to ensure that biofuels used in the U.K. come from sustainable sources. Under Department for Transport rules, companies will have to report on the source of their biofuels, starting today. There will be no mandatory requirements to meet sustainability standards until 2011.

``If we're going to have mandatory standards, we need to be sure they can work, and this reporting system will give us the evidence we need,'' a ministry official said yesterday in a telephone interview. ``We will be naming and shaming those that don't perform well in this area.''

The government should drop the obligation until they can guarantee the crops used are sustainable, Oxfam's Bailey said.

``People aren't going to look at these reports to try and work out who the most sustainable supplier of biofuels is,'' Bailey said.

Consumer Survey

Almost 90 percent of consumers don't even know that biofuels will be added to their petrol and diesel, said the environmental charity Friends of the Earth, citing a YouGov survey it commissioned. The group said that European governments should scrap biofuels targets and instead focus on improving public transport and vehicle fuel efficiency.

``People want to see real green transport solutions that will make a difference to their lives, like better public transport and smarter cars that burn less fuel,'' Kenneth Richter, biofuels campaigner for the group, said yesterday in a statement. ``Most people will be horrified to know the government is putting biofuels in our petrol when the damage they do to forests could make climate change worse.''

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net.

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