Now that the reality of climate change has been accepted even by its strongest sceptics, there is a rush to find answers. The latest buzz is to substitute the use of greenhouse gas-emitting fossil fuels with biofuels—fuel processed from plants. Unfortunately, the way we are going about implementing this “good” idea could mean we are headed from the frying pan to the fire.
There are two kinds of biofuel: ethanol, processed from sugarcane or corn, and biodiesel, made from biomass. Climate-savvy Europe gave the first push to biofuel, mandating they should contribute 6 per cent of fuels used in vehicles by 2010 and 10 per cent by 2020. The bulk of biodiesel comes from domestically grown rapeseed. But to meet its growing needs, it is looking at importing soyabean-based fuel from Brazil and Argentina, and palm oil from Indonesia and Malaysia.
us president George Bush has this year called on his country to produce 132 billion litres of biofuel by 2017, to cut dependence on foreign fuel. The us’s favourite biofuel is ethanol, which it produces from corn starch. Brazil, the world’s largest ethanol producer, mostly uses sugarcane. It is estimated that ethanol plants will burn up to half of the us’s domestic corn supplies in the coming few years. In addition, its biofuel industry is looking to make fuel out of soya and other crops to feed the automobile industry’s growing hunger.
Already, the repercussions of this switch are beginning to show. Late last year, Mexico saw its tortilla wars, as people found the price of their staple—corn—had doubled. The hike was a result of the crop’s new market as a source of vehicle fuel and the control over the crop and its uses by corporate usa. In this case, one company, Archer Daniels Midlands, has dominant interests in the corn and wheat market and is the largest ethanol processor in the region. In addition, it has a financial stake in a Mexican company that makes tortillas and refines wheat. In other words, the company benefits when corn price increases and consumers switch to wheat. Or when the switch takes place from food to fuel, they benefit. Similarly, Cargill, the agribusiness multinational, is now the big name in the biofuel market. In this scenario, prices of other food commodities—wheat, soya, palm oil—are rising as well, in turn, impacting the poorest consumers globally. The projections are that food prices will increase between 20-40 per cent in the next 10 years or so because of this switchover.
The problem is compounded by the fact that this “switch” will do little to avert climate change. It is clear that all the biofuel in the world will be a blip on the total consumption of fossil fuel. In the us, for instance, it is agreed that if the entire corn crop is used for ethanol, it can only replace 12 per cent of current gasoline—petrol—used in the country. A recent paper in the us journal Foreign Affairs estimates that filling a 95-litre fuel tank with pure ethanol will require about 200 kg of corn, which has enough calories to feed a person for a year.
If we factor in the fuel inputs that go into converting biomass to energy—from diesel to run tractors, natural gas to make fertilisers, fuel to run refineries—biofuel is not an energy-efficient option. It is estimated that roughly 20 per cent of corn-made ethanol is ‘new’ energy. This does not account for the water it will take to grow this new crop. There is also evidence that rainforests will be cut to expand the cultivation of soya, sugarcane and palm oil, which in turn will exacerbate climate change.
Don’t get me wrong: I am in favour of biofuel. But the question we need to ask is how to use it to reduce greenhouse gas emissions. Currently, though we are only interested in maximising corporate profits, we believe rather naively that social objectives are being met.
Firstly, let us be clear that biofuels cannot substitute fossil fuels; but they can make a difference if we begin to limit the consumption of the latter. If this is the case, governments should not provide subsidies to grow crops for biofuel, as is being done in the us and Europe, but spend to limit their fuel consumption by reducing the sheer numbers of vehicles on their roads. If this is done, biofuels, which are renewable and emit less greenhouse gases, will make a difference. Otherwise, we are only fooling ourselves.
Secondly, the question is where will the biofuels be used? Let us be clear that the opportunity for a massive biofuel revolution is not in the rich world’s cities, to run vehicles—but in the grid-unconnected world of Indian or African villages. It is here that there is a scarcity of energy—electricity to power homes, fuel to cook, to run generator sets to pump water and to run vehicles. It is also here that the use of fossil fuels will grow because there is no alternative.
Instead of bringing fossil fuel long distances to feed this market, this part of the world can leapfrog to a new energy future—from no fuel to the most advanced fuel. The biofuel can come from non-edible tree crops—jatropha in India, for example—grown on wasteland, which will also employ people.
This fuel market will demand a different business model. It cannot be conducted on the basis of the so-called free market model, which is based on economies of scale and, therefore, demands consolidation and leads to uncompetitive practices. In today’s model, a company will grow the crops, extract the oil, transport it first to refineries and then back to consumers.
The new generation biofuel business needs a model of distributed growth in which we have millions of growers and millions of distributors and millions of users. Remember, climate change is not a technological fix but a political challenge. Biofuel is part of a new future.