Hamburg - The increased use of biofuels has been partially responsible for a hefty increase in food prices worldwide with Western governments now having second thoughts on "green fuels" such as ethanol. Once praised as the answer to global warming, several nations rushed into subsidizing biofuels, failing to heed warnings from experts that it leads to more clearing of rainforests and in fact a further increase of carbon dioxide (CO2) in the atmosphere.
About two-thirds of new cars sold in Brazil today run on ethanol fuel produced from sugar cane. The U.S. Congress agreed to a fivefold increase in biofuels and in Germany the government had plans to add 10 per cent of biofuel to petrol starting from next year as part of plans to reduce C02 emissions.
Proponents argue that biofuels are climate neutral because they emit only the C02 stored in the plants.
But environmental organisations such as the World Wide Fund for Nature (WWF) and Greenpeace had always warned that sustainable biofuels could only be part of the answer and that mass production could lead to "massive environmental consequences on other areas such as water management, deforestation, or farming and food production".
The Organisation of Economic Cooperation and Development (OECD) warned in a statement last year that "the current push to expand the use of biofuels is creating unsustainable tensions that will disrupt markets without generating significant environmental benefits".
But most people have been surprised at how fast fuel-versus-foods debate became a focal point. International Monetary Fund (IMF) and World Bank leaders in Washington had some startling words at their meeting last week.
"If food prices go on as they are today, then the consequences for the population in a large set of countries, including Africa, but not only Africa, will be terrible. Hundreds of thousands of people will be starving. Children will suffer from malnutrition, with consequences all of their lives," IMF managing director Dominique Strauss-Kahn said.
The problem with the current first generation of biofuels is that they are produced from energy rich crops such as sugar cane and corn. Only limited agricultural land is available to produce crops to feed six billion people and recent droughts in countries such as Australia have led to lower harvests. Increased demand and higher prices in turn lead to more destruction of rainforests.
German Environment Minister Sigmar Gabriel meanwhile is working on an exit strategy on his plans to add 10 per cent of E85 ethanol fuel to petrol after Germany's automobile association ADAC warned that about three million cars could have problems with the new fuel. Gabriel is under pressure from environmentalists who pointed out that Germany would have to import most of the biofuel and that no safeguards had been implemented to ensure that the crops were not produced from cleared rainforest lands.
Ford, one of two car makers in Europe offering new cars running on E85 - a mixture of 85 per cent ethanol and 15 per cent petrol, is adopting a realistic approach. Ford CEO for Germany Bernhard Mattes conceded at last year's Frankfurt Motor Show that second-generation biofuels produced from wood chips or plant residue was a more viable alternative but that the technology was at least five years away.
Meanwhile, other manufacturers are placing their bets on the revolution in battery technology as a more viable clean-drive technology. Lithium-ion batteries have significantly increased the range of such cars. The Tesla, based on the Lotus sports car, accelerates from zero to 100 km/h in just 3.9 seconds with a range of 354 kilometres on one electric charge. The entire 2008 production run has been sold out although the car costs some 100,000 dollars.
