Biofuels. Big potential for some...but big risks too

Oct 2008

Record breaking oil prices have reinforced an existing push to reduce dependence on foreign oil, and a number of countries are turning to biofuels as a means of enhancing energy security. Concerns about climate change have also led to increasing support for the biofuels sector. Brazil, the European Union, and the United States, among others, have policies that promote greater production of sugarcane, maize, and starch crops for ethanol, as well as oilseeds for biodiesel.
But this growing demand for maize and other feedstock crops to produce biofuels has also been an important driver of surging food prices worldwide. The interaction of spiraling oil and food prices—and its often harmful impact—underlines the urgent need for national biofuel strategies based on thorough
assessments of likely positive and negative economic, social, and environmental outcomes.
Brazil and the United States accounted for almost 90 percent of global ethanol production—50 billion liters—in 2007. In the same year, the EU countries produced nearly 60 percent of world’s total biodiesel output of 9.6 billion.

By: World Bank Institute

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