Exclusive-Britain, Germany Push G7 for Halt to Biofuel Mandates to Tame Food Prices

June 24, 2022

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by Sarah McFarlane (Reuters/Global Banking and Finance Review) Officials from some G7 countries, including Germany and Britain, will push for temporary waivers on biofuels mandates to combat soaring food prices when leaders from the group of wealthy nations meet on Sunday, three people familiar with the matter told Reuters.

The food crisis caused by the war in Ukraine has sparked a food versus biofuel debate, with some policymakers calling for an easing of mandates for blending biofuels into petrol and diesel to increase the supply of global grain and vegetable oil.

“We’re quite keen to look at the issue of biofuel mandates to ensure that crops are prioritised for food consumption and not necessarily for use in fuels,” a British government official told Reuters.

It’s not clear whether there’s broad-based support to temporarily waive biofuel mandates across the G7 members which include Canada, France, Germany, Italy, Japan, Britain and the world’s largest biofuel producer, the United States. Surging oil and gas prices have also increased the demand for energy sourced from crops.

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Prices of crops used in biofuels have jumped this year, with wheat and corn up by around a quarter, while soybean oil is up by about a fifth.

Grain and vegetable oil crops could be diverted from fuel use to help address the global food crisis, but many governments have laws requiring the production of biofuels, partly to help support local farmers and meet emissions reduction targets.

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One of the points of tension in the debate in Germany is how the country will meet its emissions reduction plans without biofuels. “In the transport sector we would have to find solutions for how to compensate,” said Bernt Farcke, director general for forests, sustainability, and renewable resources at Germany’s agriculture ministry.

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Britain’s biofuel trade body, the Renewable Transport Fuel Association, said waiving biofuel mandates would be unhelpful as farmers would be left with low grade wheat that isn’t fit for human consumption.

“It would push up costs for livestock farmers, as less of the high-protein animal feed by-product from bioethanol manufacture would be available,” said Gaynor Hartnell, chief executive of the RTFA. READ MORE

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