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The Battle of the Food-based Biofuels

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While we wait for cellulosic ethanol to ramp up to commercial-scale, the corn-based ethanol industry continues to hang on with a little help from Washington — President Barack Obama indicated over the weekend that import tariffs on Brazilian sugarcane ethanol won’t be ending anytime soon. The issue came up after a meeting between Obama and the president of Brazil at the White House.


Calling it a “source of tension” between the two countries, Obama said at a press conference, “It’s not going to change overnight.” Brazil has reportedly threatened litigation at the World Trade Organization over the 54-cent per gallon tariff.

Food-based biofuels such as corn and sugarcane ethanol have been blasted by environmental groups as being unsustainable, although Oxfam International gave sugarcane ethanol a backhanded compliment last year, essentially calling it the best of the worst.

The anti-poverty charity said that rich countries have spent billions supporting domestically-grown biofuels while blocking cheaper Brazilian ethanol, which Oxfam said is “far less damaging” for global food security. Brazilian ethanol also packs more of an energy punch than corn ethanol, but there are side effects from both industries.

The Oxfam report, released before some of the more recent woes in the ethanol industry, said that demand for corn in the U.S. has skyrocketed due to the strong government support for ethanol, with U.S. and Canadian farmers switching out of soy to grow corn. But that’s pushed up the price of soy, and Oxfam said farmers across South America want in on the high-priced action, and are cutting down rainforests to bring new land into production for soy. And farmers in Brazil may be getting pushed on two fronts — Oxfam said the expansion of sugarcane for ethanol in Brazil could push the farmers further into the Amazon.

The U.S. has been experiencing it’s own biofuel tariff worries lately, but in the biodiesel industry. The EU is planning to slap a tariff on imports of biodiesel from the U.S. European biodiesel producers have railed against the subsidies they say U.S. producers can get, which translates to a lower price at the pump for U.S. biodiesel vs. European brands.

8 Responses to “The Battle of the Food-based Biofuels”

  1. SubsidyEye

    And the comments from Steve V are the usual exaggerations we have learned to expect from those who justify not only large subsidies and mandates, but also border protection against Brazilian imports.

  2. SubsidyEye

    The U.S. biodiesel industry is a farce. It claims to be helping to reduce U.S. petroleum use, when in fact (until last week, when the European Commission imposed antidumping and countervailing duties on imports of U.S. biodiesel), it exports 80% of its production to Europe,

    It has survived over the last two years only through a combination of state and federal subsidies (totalling from $1 to $2 per gallon, depending on the state), blending mandates, and the ability to first collect U.S. subsidies and then sell its product in Europe for around $4 per gallon.

    Congress should admit it made a mistake, provide generous unemployment and retraining subsidies for workers put out of work as a result of biodiesel plants going out of business, and end all production-related subsidies for biodiesel.

  3. Quoting an Oxfam report from last year is an interesting illustration of how the volatility in commodities markets can change perceptions quickly. The fact is that today, the price of a bushel of soybeans, when indexed for inflation, is at a level rarely seen since the Great Depression.

    The National Biodiesel Board is committed to safeguarding our planet’s valuable resources. The biodiesel industry is built on sustainable practices in the production of a fuel that is proven to lower greenhouse gas emissions and provide energy from a renewable resource.

    Industry goals to expand access to renewable biodiesel are based on domestically available feedstocks – that is resources to make biodiesel that exist right here, within our borders.

    We support protecting the rainforest and formalized guiding principles for our young industry that recognize the full spectrum of sustainable practices, including a commitment to climate change mitigation, human rights, food security, and respect for natural resources.

    The solution to reducing deforestation is improving global sustainable agriculture practices and addressing the major causes of deforestation, such as logging and infrastructure development. Biodiesel is a part of that solution, driving research that increases crop yields, and improves supplies of protein and higher outputs for food and feed on the exact same acres of land.

  4. Steve V

    TO CNCMike
    Do you really understand the differences with sugar cane and corn based ethanol. Sugarcane ethanol is seasonal, so most areas in the US would not fit this production. Does Brazil have emissions standards since they burn the remnants of the sugar cane plant? Do they have strict labor and enviromental rules?

    Do you know that one acre of corn produces over 450 gallons of ethanol and over 1.25 tons of protein?  That protein represents over half the value for that acre production.

    Ethanol creates American Jobs.
    Ethanol can displace oil 2 to 1 by energy content and volume.
    Ethanol offers a reduction in emission and green house gases.
    Ethanol in higher blends (E15) in non flex vehicles will not hurt the vehicle and on average will not reduce mileage, have studies to show this.
    Ethanol does not displace the amount of corn as reported; the amount of protein that remains from the ethanol process is being feed to cattle, dairy and poultry. This amount is displacing over half the market value of corn heading to the ethanol plant verses the original feeding value.
    Ethanol does not raise food prices like reported on the news. Less than 17% of corn goes directly to the food industry while speculators in Chicago drove up the commodities just like they did with oil and precious metals.
    Ethanol can feed people; new plant designs can separate the protein from the starch prior to the fermentation and allow production of food grade protein. We always hear about diet issues here and abroad, we are a starch rich protein deficient world.
    Ethanol does not use vast amounts of water unless you want to figure in the rain, most ethanol plants are zero water discharge with only the cooling towers giving off water vapor for cooling. Look at the water use for refining gasoline.
    Ethanol is not responsible for rain forest destruction. There was a 4% reduction in acres of corn planted last year with another reduction forecasted this year. Reports are that vast amounts of rain forest are being harvested for the hard wood while we shut down our forest and subject them to fire.
    Ethanol can displace most if not all the oil we import from the Middle East. With the combination of corn based, cellulose & wood ethanol production. When we trade with ourselves we have both the product and the money. We need a fair and balanced approach

  5. CNCMike

    Actully the Brazillian Gov’t has forbidden sugar cane to be planted on any land that is currently rain forest so that argument is a non starter.

    Secondly, the way sugar cane is planted and harvested in Brazil is more sustainable and much more responsible than the mono culture, petroleum intensive farming we do in the US. Most fields go 5 years before needing replanting and some go as long as 10 years. Also, sugar cane ethanol production is so efficient that the distilleries do not use any utility power at all. In fact using nothing but sugar cane they produce many billions of gallons of ethanol and 77% of all the electricity in Brazil.