Biofuels Bonanza

06 Mar 2008 Most people involved in the biofuels industry knew long before a cornstalk made the cover of National Geographic that corn-based ethanol was probably not the answer to fossil fuel concerns. It was only in the United States that it seemed like a good idea, where the government chose to give farmers incentives to grow corn for ethanol.

food vs. fuel

By recent estimates, one fifth of the United States corn harvest is going into ethanol fuel production. But as more corn has gone toward biofuel, rather than for food or animal-feed, the price of corn has risen sharply, sending world food prices skyrocketing. And despite efforts by countries such as China, Russia and Mexico to control fluctuating prices, rising food costs have sparked violent riots throughout the world.

As Lester Brown, President of Earth Policy Institute, explains in his new book “Plan B 3.0: Mobilizing to Save Civilization”:

“Historically the food and energy economies were separate. But with so many ethanol distilleries now being built to convert grain into fuel, the two are merging…If the fuel value of grain exceeds its food value, the market will simply move the commodity into the energy economy…Suddenly the world is facing a moral and political issue that has no precedent: Should we use grain to fuel cars or to feed people?”

— Lester Brown

With corn at the center of a heated “food vs. fuel” debate, biofuel made from soybeans or palm oil may seem like a good alternative, but with commodity prices hitting 6-year highs, it seems unlikely either of these feedstocks are the way forward either.

Meanwhile, Brazil’s sugar industry sold more sugar to make ethanol than for sugar exports for the first time in 2007, with about 55 percent of the crop going to ethanol and 45 percent to sugar. The country meets 40 percent of its fuel needs through its own sugar-based ethanol industry. Economist Plinio Nastari projects that by 2014 Brazil will devote 68 percent of sugar cane crops to ethanol and 32 percent to sugar.