Food or Fuel?

A struggle to survive….
Outline
• What is Biofuel?
• Why Bio-Fuel Became Important ?
• What is the problem from Biofuels?
• Who is affected?
• A Trade Off : Food or Fuel?

• Conclusion, Suggestions
What is Biofuels?

• The use of plants or its

products such as corn,
wheat for the
production of energy
(ex. Ethanol) which can
be used instead of oil as
a source of energy for
transportation and
manufacturing…etc
What is Biofuels?
• Its chemical properties and performance characteristics
are very similar to petroleum-based diesel fuel.

• It can readily replace or be blended with diesel fuel or

heating oil in standard diesel engines and boilers,
requiring very few, if any, equipment modifications.

• It can be produced fairly inexpensively from a variety of

biomass feedstocks in large oil refinery-sized plants or
at the village level using simple technology.
Biofuels Production cycle
 The Shift to Biofuels

• Biofuels is not new, but it remained a

tiny niche market until oil prices rose.

• When oil prices peaked , Bio-fuel

became cost effective.
Why Biofuels?
• A large-scale expansion of biofuels for
transport has the potential to make a
significant positive contribution to the climate
problem and to provide a source of income to
support rural livelihoods.
• Biofuels production may offer income-
generation opportunities in rural areas
Rising oil prices
 “Keeping America
competitive requires
affordable energy. And
here we have a serious
problem: America is
addicted to oil, which is
often imported from
unstable parts of the
world.”

President
• G.W.
Bush,
State of the Union
•

Address, January
2006
What is the problem from Biofuels?
• Biofuels creates an increased
demand for crops such as
corn and wheat, so its prices
get higher and at the same
time food prices gets higher
as well.

§ World Bank policy research working

paper released in July 2008 says that
biofuels have raised food prices
between 70 to 75 percent. The study
found that higher oil prices and a weak
Monthly U.S. Ethanol ProductionExpressed as
an annual rate
 U.S. Use of Corn

• the uses of Corn as food (red curve) is shifted towards the

production of ethanol (green curve), also exports are
declining.
Increased portion of food supply
devoted to biofuels
What is the problem from Biofuels?
Competition between biofuels and food, as an end-
use of the same crop (e.g. maize, sugarcane) or as
alternative land uses (e.g. oil palm versus food
crops), increase demand for food & prices. the so-
called “food versus fuel” debate.
What is the problem from Biofuels?
§ The World Bank declared in July 2008 that biofuels
have raised food prices between 70 – 75% and that
the higher oil prices explain 25 – 30% of the total
price rise.
§ Rising food prices are likely to have negative effects
on access to food for poorer and more vulnerable
groups.
What is the problem from Biofuels?
Cost of biof uels
 Prices of many
commodities
rose even more
+ 585 %

+ 329 %

+ 130 %

Source: International Monetary Fund: International Financial Statistics

We are paying Twice!!
§ Most people do not realize
that global food reserves
are at historic lows, while
proven global oil reserves
are at historic highs. With
biofuels you pay twice;

§ once at the pump and then

again at the supermarket,
which effectively makes

§ Biofuel production a
massive new tax on food.
Who is most affected with the
increasing prices of food?

• Developing countries : Huge demand

due to big Populations.
• India for example has one of the
highest demands population1.13
billion.
High population growth =high food demand
Eating Mud!
§ The poor of the Third
World, the homeless,
the elderly, the disabled
and all those living on
low fixed incomes are
the hardest hit by high
food prices.

§ Haiti resorting to eating “Mud Cakes”

because American biofuel mandates
have made grains unaffordable.
Rising food prices have sparked violent protests around
the world. Five people were killed and hundreds injured
 s.

Pakistani women buy subsidized flour in Lahore. The

price of staple foods and fuel has risen drastically in the
 Conflict of Interests
• Indian minister attacks biofuels:
INDIAN FINANCE MINISTER HAS
SAID THAT IT IS "OUTRAGEOUS"
THAT DEVELOPED COUNTRIES
ARE TURNING FOOD CROPS
INTO BIO FUELS.

• He said the pursuit of such

policies at a time when many in
the world could barely afford to
eat was "outrageous and...
must be condemned".
Developed Countries response!!
• Former US Secretary of State Condoleeza Rice said that
the global food crisis is caused by “the growing Indian
and Chinese appetite”!!!
 What are the Future plans?
• The EU plans to have 8% of its transportation
fuels coming from biofuels by 2015 .
• In the USA, the Energy Policy Act (EPACT) of
2005 created a national Renewable Fuels
Standard (RFS) that plans to increase national
biofuels consumption to 28 billion litres by
2012.
Conclusion
• Increasing the biofuels production by the
developed countries will cause higher
food prices that will affect negatively the
food supply for the developing countries.
• The biofuels negative effects on food
prices will increase in the future with high
population growth rates.
• Reforms to the energy sector should
protect the poor, especially the 1.1 billion
Finally …

We are not against biofuels but, developed

countries must search for alternatives
that won’t affect the food supply for poor.
Thank
You