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Biofuels Increasing Global Food Prices

Green Tractor Pulling a red machine in a field

A new analysis suggests that biofuels are pushing up food prices around the world, due to shortages in production.

The study’s producers now hope to call for an end to biofuels in order to prevent a new hunger crisis.

Food prices driven up

Biofuels which are made from food crops, including rapeseed oil and palm oil, has increased over recent years as we search for an alternative to fossil fuels. However, this change has had a knock-on effect in the form of driving up food prices around the world, and those behind this analysis say that it needs to stop.

Green Tractor pulling red machine in a field

Policies around the world have been aiming towards greener fuels, such as the EU’s biofuel directive from 2003. There has been a surge in biofuel production since that time in both Europe and the US. The EU has faced up to the problems with food shortages by putting a 7% cap on the use of food-based biofuels in 2015, but critics now say that the cap is not making enough of a difference.

The current debate is over whether the EU should keep the cap in place in 2021, or cut it down to a lower percentage. A number of NGOs are in support of lowering the cap, and individual countries are now taking note. The UK currently has a 4% cap and will be cutting that down to 2% by 2032.

This may be a serious concern for supply chain workers over coming years, as the availability of food stock may drop if nothing is done. With electric and hybrid vehicles becoming a more common sight on the roads, many may feel that biofuels are a good step further to try to reduce harmful emissions and prevent the use of fossil fuels whilst still getting great performance.

Potential price drops

So, what would happen if everyone stopped using and making biofuels overnight? The analysis suggests that global vegetable oil prices would drop by 8%, with global cereal prices also dropping by 0.6%, by 2030. Some may be underwhelmed by these small figures, though they do represent a large trend compared to normal yearly changes.

Report author Dr Chris Malins from the consultancy Cerulogy said: “Reducing demand in Europe for food-based biofuels would take pressure off food commodity markets, resulting, in the short to medium term, in modest reductions in food prices and global poverty rates, and in net global welfare improvements.”

It may well fall to those in new product development jobs to come up with new ideas to solve this potential crisis. Vegetable oil and palm oil could perhaps be replaced in some foodstuffs with a substance which is more readily available, allowing shortages to even out a little more.

At any rate, there is currently much discussion about whether it is good for the environment to use vegetable oils for biodiesel at all. The Royal Academy of Engineering published a report which suggests that food crop-based biodiesels might actually create more emissions than fossil fuels do.

“We would advocate for their use in hard-to-treat sectors, such as aviation, rather than road transport, which can be and is increasingly rapidly becoming electrified,” a WWF spokesperson said regarding biofuels, adding that they should only be made from waste products rather than using food crops.

Hilal Elver, UN Special Rapporteur on the right to food, said biofuels were “having a huge impact on accessibility of food because of price increase, especially in developing countries. Moreover, in developing countries biofuel production is connected with the land grabbing and heavy pesticides use”. There is no official statement from the EU Commission.