Contribution of Biofuels to the Global Economy
(Global Renewable Fuels Association/Cardno ENTRIX) …As is the case with virtually all other emerging and developing countries, biofuels offer the prospects of a new cash crop for farmers, increased employment in rural areas, expanded manufacturing output, reduced fuel import costs, and foreign exchange earnings. Africa stands to benefit significantly from the development of biofuels as a displacement for imported oil and petroleum products.
…(T)he biofuels industry contributed $277.3 billion to the global economy in 2010. This amounts to 0.4 percent of the globe’s GDP.
- …Biofuels displace petroleum and reduce the world’s dependence on foreign oil, especially for major importers such as the U.S and EU and rapidly growing emerging markets such as China, India and Brazil. The production and use of ethanol and biodiesel displaces the crude oil needed to manufacture gasoline and distillate. The production of 110.8 billion liters of ethanol and biodiesel in 2010 is the equivalent of 1.2 billion barrels of crude oil valued $135.4 billion at 2011 prices. The displacement of crude oil with biofuels is projected to increase to nearly 2.3 billion barrels by 2020 valued at $253.6 billion.
- The impact of biofuels on displacing crude oil has a positive effect on the balance of payments and international financial health of net oil importers. As shown in Table 7, among the 21 major biofuels producers discussed in this study only seven (Argentina, Brazil, Canada, Colombia, Malaysia, Mexico, and Vietnam) were net crude oil exporters in 2010 and of these only two (Argentina and Malaysia) had positive current account balances. The aggregate current account deficit of the net oil importers was $639 billion (including the U.S. which had the highest deficit of $471 billion). These countries produced the equivalent of 821 million barrels of crude oil in the form of biofuels valued at $91.3billion. In other words, but for biofuels, the current account deficits of these countries would have been 14 percent higher.
…The importance of biofuels to agriculture is particularly notable since feedstocks produced by the world’s farmers provide significant revenue and stimulate future agricultural production that will enhance food security on a global basis. The fastest growth in biofuels production is expected to take place in emerging and developing countries particularly in Asia and Africa. For these countries biofuels will supply rapidly growing domestic markets and provide an important base for expanding export earnings needed to fuel economic growth. READ MORE