Analysis: Biofuels -- vice or virtue?

BERLIN, July 3 (UPI) -- Germany's biofuel companies hope for government support to keep their industry thriving. While critics say the environmental and social damages caused by the biofuel boom are severe, industry members say biofuels can be an important factor in the battle to stop global warming.

Both the United States and the European Union are heavily supporting the increased use of biofuels to drive down greenhouse gas emissions in the transportation sector.

At a summit earlier this year, the 27 EU member states agreed to increase the share of biofuels in transportation to at least 10 percent by 2020 -- a very ambitious goal, observers say.

"If we want to reach that goal, we need government support," Moritz Gaede, member of the executive board at Campa AG, a German biofuels firm, recently told a group of reporters in Berlin.

His call was supported by a German environmentalist, who said that much like the solar energy sector, which got a significant boost from a renewable energy feed-in tariff, the biofuel industry needed incentives.

"The market doesn't automatically care for climate protection; the state has to create those incentives," Gernot Klepper, environment and natural resources expert at the Kiel Institute for the World Economy, a Germany-based think tank for research in global economic affairs, said at the same news conference.

Klepper, in a presentation to reporters, said some 7.5 million tons of carbon dioxide emissions were saved in 2005 because of biofuels.

But biofuels are becoming increasingly controversial. For one, they have driven up food prices: Farmers are switching in droves from producing food crops to plants used for biofuel production, which is often subsidized. Palm, soybean and rapeseed oils are increasingly used for biofuels, and less wheat is produced, putting a strain on the poorest countries, which can hardly afford higher prices.

Moreover, biofuels lead to more land being used for agricultural purposes; in countries like Indonesia and Brazil, where palm oil is produced, this leads to rainforests being cut down, critics say.

Biofuel critics also argue that biofuels produce much more CO2 than is being said, if you count in the agricultural production cycle that includes heavy fertilizing and harvesting machinery.

On Thursday, a charity supporting farmers in developing countries sounded the loudest alarm yet. The charity, Grain, said their research shows that the biofuel boom is causing severe environmental and social damage.

"The wide-scale cultivation of agrofuels will actually make things worse in many parts of the world, notably southeast Asia and the Amazon basin, where the drying of peat lands and the felling of tropical forest will release far more carbon dioxide into the atmosphere than will be saved by using agrofuels," the group said in a statement based on its research. "Farming is responsible for 14 percent of greenhouse gas emissions. Within farming, the largest single cause is the use of chemical fertilizers, which introduce a huge amount of nitrogen into the soil, and nitrous oxide into the air.

"Changing land use (mainly deforestation and thus linked to the expansion of crop monoculture) is responsible for another 18 percent. And a large part of global transport, which is responsible for a further 14 percent of emissions, stems from the way in which the agro-industrial complex moves large quantities of food from one continent to another."

Klepper did not agree with Grain's findings: He said biofuels' ecologic record is already better than most people say.

"In the past decade, the environmental balance of biofuels has dramatically improved," Klepper said. "Today, biofuels produced in Germany can replace roughly 70 percent of the fossil fuel."

The industry also hopes for so-called second-generation biofuels, which are based on biological waste digested by bacteria. They are, however, at least a decade away, according to current estimates.

Until then, Gaede said biofuels should be certified for their sustainability, to avoid social (child work) and environmental (deforestation) shortcomings in connection with their production.

Norbert Schmitz, of the environmental consulting agency Meo Consulting, has helped develop such a certification system for the German Agriculture Ministry, which will be tested within the coming years, he said. Companies in the 27 EU member states and key firms in Malaysia, India, Brazil and Argentina will take part in the test system, he added.

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