European biodiesel makers have entered a rough patch.
The price for their main feedstock, rapeseed, has risen more than 50 percent since the beginning of the year. But the price of the final product, biodiesel, has plunged, because producers are churning out far more biodiesel than the market can absorb.
Similar conditions hold sway among U.S. ethanol makers: heightened corn prices combined with an ethanol glut. But U.S. producers are celebrating while their European counterparts exude gloom. Why the difference?
That's an easy one. In the U.S., the government is playing Santa Claus, while in Europe, governments are responding to industry demands for more goodies with a cold stare.
The energy bill that President Bush recently signed into law will essentially eliminate the glut conditions that now hold sway within the industry. In 2007, makers struggled to market the 7 billion gallons it produced. With an extra two-to-three billion gallons of supply coming online in 2008, the industry was bracing for a crushing glut, Dow Jones reports.
But the energy bill mandate that gasoline blenders use at least 9 billion gallons in 2008, allowing ethanol makers like Archer Daniels Midland -- and their shareholders -- to breathe easy.
The day after Christmas, Wall Street powerhouse Citigroup gifted the industry with a bullish report. "We firmly believe the new energy bill will serve as a significant catalyst to the ethanol industry," the firm declared.
Over in Europe, where biodiesel, not ethanol, is the fad fuel, governments are singing a different tune: they're staying on the sidelines while the biofuel industry flounders.
A Thursday Wall Street Journal article tells the story. "In 2006, when commodity prices were low and margins were fat, Germany decided to trim the tax breaks it offers to biodiesel producers," the Journal reports. "Earlier this year, France raised taxes on biodiesel. Now that producers are in trouble, governments aren't giving the tax breaks back."
Why? If I'm understanding the Journal story correctly, it's partly because governments are actually listening to green critiques of agrofuel:
Green lobbies are also turning against biodiesel. They now say that growing crops for biodiesel puts too much pressure on land and food prices. In Europe, 80% of biodiesel is made from rapeseed, a distinctive, yellow-flowered crop. Environmental groups also oppose imported palm-oil-based biodiesel from countries such as Malaysia and Indonesia, saying the rush to grow more oil palm trees is causing deforestation.
Wow. Many of us are making similar arguments here, and the government goodies for agrofuel just keep a-coming.
Climate Citizen: Michael Pollan on agriculture and health care
Tweet for the bees
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Biodiversivist Posted 11:06 am
27 Dec 2007
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
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Karen Lee Orr Posted 8:49 pm
27 Dec 2007
Here's the URL for the online agrofuel moratorium petition
http://ga3.org/campaign/agrofuelsmoratorium
Please sign and pass along.
Regards,
Karen Orr
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Call for an Immediate Moratorium on U.S. incentives for agrofuels, U.S. agroenergy monocultures and global trade in agrofuels
The undersigned call for an immediate moratorium on U.S. incentives for agrofuels and agroenergy from large-scale monocultures and a moratorium on global trade of such agrofuels. This includes the immediate suspension of all congressionally mandated targets and incentives such as tax breaks, tariffs and subsidies that benefit and promote agrofuels from large-scale industrial monocultures, including financing through carbon trading mechanisms, international development aid or loans from international finance organizations.
This call responds to the rapid concentration of the agrofuel industry in the U.S., driven largely by U.S. and E.U. renewable fuels targets, and to the growing number of calls from the global south against the expansion of agrofuel monocultures. Agrofuels refer to large-scale industrial monoculture production of crops such as soy, oil palm, sugar cane, jatropha, canola etc. for fuels and do not include small scale, sustainably grown fuel crops that benefit local communities, do not employ genetically engineered (GE) varieties, and can be accurately referred to as "biofuels".
Agrofuels cause deforestation and environmental damage
Industrial monoculture production has numerous negative impacts on the environment, climate and on people. These include soil depletion and erosion, contamination and depletion of waterways, increased use of nitrogen fertilizers and toxic agrichemicals and an increasing reliance on a small number of GE varieties at the expense of diverse and sustainable agriculture systems. Monocultures of soy and sugar cane in Latin America and palm oil in Indonesia and Malaysia have led to massive deforestation and the loss of invaluable biodiversity.
Agrofuels will worsen global warming
Agrofuels are promoted as a solution to global warming, but more accurate life-cycle assessments suggests that they increase carbon emissions by increasing deforestation and degradation of peatlands and soils, while also creating more nitrous oxide emissions from fertilizer use. Crop irrigation and refineries deplete already dwindling fresh water resources.
Agrofuels seriously threaten food and land rights of indigenous people and the rural poor.
Promoted as a benefit to the rural poor, agrofuels are instead causing the displacement, often violent, of indigenous people and the diversion of lands formerly used to produce food for local consumption into production of agrofuels for export to wealthy northern countries. Workers are subjected to poor conditions, chemical exposures, and other abuses.
Certification will not provide adequate protections
Certification systems cannot control macro-level impacts such as the displacement of other land uses, cannot be adequately monitored and implemented in many countries, have thus far failed to ensure full participation of affected communities, could conflict with WTO agreements, and cannot be designed and implemented fast enough to keep pace with current development.
The International Energy Agency estimates that over the next 23 years, the world could produce as much as 147 million tons of agro-fuel. This fuel will barely offset the yearly increase in global oil demand, now standing at 136 million tons a year without offsetting any of the existing demand. Is this worth it?
Urgent and effective measures other than agrofuels are available
The undersigned support urgent cuts in greenhouse gas emissions, based on climate science assessments, which involve a drastic overall reduction in energy use in industrialized countries, strict energy efficiency standards, and support for truly renewable forms of energy, such as sustainable wind and solar energy and promotion of land use patterns that preserve 'carbon sinks'.
Members of the working group:
Rainforest Action Network
Global Justice Ecology Project
Food First
Grassroots International
Family Farm Defenders
Student Trade Justice Campaign
Please sign the petition here:
http://ga3.org/campaign/agrofuelsmoratorium
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