Biofuels Phase-Out Will Raise Demand for Feed Imports, Industry Warns

by Samuel White (EurActiv) This article is part of our special report Phasing-out biofuels: What’s really at stake?. -- Biofuels in the EU are deeply intertwined with global food and feed markets. As the EU discusses its future biofuels policy, their contribution to the bloc’s animal feed supply and impact on food prices have emerged as major battlegrounds between supporters and critics.

Critics of EU biofuels policy have welcomed the move, saying it will reduce pressure on food prices. Farmers and biofuel producers, on the other hand, argue that biofuels have had very little impact on prices, while providing farmers with an income outside the subsidised CAP framework and boosting Europe’s autonomy in animal feed.

One thing is for sure: a biofuels phase-out will have far-reaching consequences for farmers and global agricultural markets.

By-products from biodiesel and bioethanol crops generate some 17 million tonnes of feed for EU livestock every year.

According to the association of EU farmers and agri-cooperatives Copa-Cogeca, EU support for first-generation biofuels under the 2009 Renewable Energy Directive (RED I) has cut the bloc’s dependence on imports of animal feed proteins by 10%.

For Marijana Petir, a Croatian MEP (EPP group) and member of the European Parliament’s agriculture committee, this should be a powerful argument against phasing out first-generation biofuels. Not only would this leave farmers more dependent on imports, she told EURACTIV.com, but “in contrast to the feed produced by the EU biofuel industry those imports will be based on genetically modified (GMO) material”.

What is more, “cutting feed imports to the EU also helps to reduce the ILUC impact [of animal feed] in third countries”.

Biofuels producers and supporters argue that the industry has had a very limited impact on EU food and feed prices.

“The increase in food prices is nothing more than a myth,” said Petir. “This myth has been comprehensively dismissed: the OECD, the World Bank and the UN FAO all accept that the driver of food prices was a spike in oil prices.”

“Stable agricultural markets lead to increased investments and increased productivity, which is beneficial for food as well as biofuels,” the Copa-Cogeca study stated. “Conventional biofuels are not automatically synonymous with market conflicts.”

And simply finding new markets for the newly generated surplus is not a viable option, according to the industry.

“There is no alternative outlet in the EU to absorb 6.4 million tonnes of rapeseed oil. Neither is it realistic to consider that this volume will replace imported tropical oils,” Nathalie Lecocq, the director-general of Fediol, the organisation representing the EU vegetable oil and protein meal industry, told EURACTIV.

Cereal prices have already fallen 40% in three years due to record global production. Converting the EU’s rapeseed fields to wheat would increase EU production by 15% and further undermine prices. READ MORE