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Biofuels and Food Security. HLPE Report 5 HLPE REPORT 5 Biofuels and food security A report by The High Level Panel of Experts on Food Security and Nutrition June 2013 HLPE Steering Committee members (June 2013) MS Swaminathan (Chair) Maryam Rahmanian (Vice-Chair) Catherine Bertini Tewolde Berhan Gebre Egziabher Lawrence Haddad Martin S. Kumar Sheryl Lee Hendriks Alain de Janvry Renato Maluf Mona Mehrez Aly Carlos Perez del Castillo Rudy Rabbinge Huajun Tang Igor Tikhonovich Niracha Wongchinda HLPE Project Team members John Wilkinson (Team Leader) Suraya Afiff Miguel Carriquiry Charles Jumbe Timothy Searchinger Coordinator of the HLPE Vincent Gitz This report by the High Level Panel of Experts on Food Security and Nutrition (HLPE) has been approved by the HLPE Steering Committee. The views expressed do not necessarily reflect the official views of the Committee on World Food Security, of its members, participants, or of the Secretariat. This report is made publicly available and its reproduction and dissemination is encouraged. Non- commercial uses will be authorised free of charge, upon request. Reproduction for resale or other commercial purposes, including educational purposes, may incur fees. Applications for permission to reproduce or disseminate this report should be addressed by e-mail to [email protected] with copy to [email protected] Referencing this report: HLPE, 2013. Biofuels and food security. A report by the High Level Panel of Experts on Food Security and Nutrition of the Committee on World Food Security, Rome 2013. 2 Table of Contents FOREWORD .............................................................................................................. 7 SUMMARY AND RECOMMENDATIONS .................................................................11 INTRODUCTION .......................................................................................................21 1 BIOFUEL POLICIES ...........................................................................................27 1.1 The emergence of policy-based biofuel markets – ethanol in Brazil and the US .............. 28 1.2 The entry of the EU and the rise of biodiesel ........................................................................ 30 1.3 A new impulse to biofuels in the US and Brazil .................................................................... 31 1.4 The adoption of policy-promoted biofuel markets worldwide ............................................. 32 1.4.1 Biofuels in China .................................................................................................................... 33 1.4.2 Biofuels in India ...................................................................................................................... 34 1.4.3 Biofuels in other Asian countries ............................................................................................ 35 1.4.4 Biofuels in South Africa .......................................................................................................... 35 1.4.5 An emerging biofuels strategy in sub-Saharan Africa ............................................................ 37 1.4.6 Biofuels in Latin America........................................................................................................ 38 1.5 EU and US: policies at a turning point? ................................................................................. 39 1.6 Conclusions .............................................................................................................................. 41 2 BIOFUELS AND THE TECHNOLOGY FRONTIER ............................................43 2.1 Biofuel technology trajectories ............................................................................................... 43 2.2 How do technologies matter for the competition for land, with food and feed? ............... 45 2.3.1 Cost-efficiency ........................................................................................................................ 47 2.3.2 Energy balance ...................................................................................................................... 48 2.3.3 Greenhouse gas balance ....................................................................................................... 49 2.4 The timetable for second-generation biofuels ...................................................................... 50 2.4.1 Technology trajectories and investments at a crossroad ....................................................... 50 2.4.2 Second-generation biofuels versus other forms of bioenergy ............................................... 51 2.4.3 What perspectives for the US, EU, Brazil and other developing countries? .......................... 51 2.4.4 Second-generation biofuels: are they an alternative for developing countries? .................... 52 2.5 Conclusions .............................................................................................................................. 53 3 BIOFUELS, FOOD PRICES, HUNGER AND POVERTY ...................................55 3.1 Introduction: tackling the “biofuels and food prices” controversy .................................... 55 3.2 Basic mechanisms at play between biofuels and food commodity prices ........................ 57 3.2.1 Feedstock consumption and production feedbacks ............................................................... 57 3.2.2 Substitution effects between products, at the demand or at the supply level, in food and fuel markets ......................................................................................................... 59 3.2.3 Potentially differing short-term and long-term feedbacks and substitution effects ................ 61 3.3 State of the literature related to biofuels and food prices.................................................... 61 3.3.1 Linkage of food prices to oil prices via biofuel production capacities and biofuel demand ... 62 3.3.2 Rising US corn-ethanol demand and related tension on corn and oilseed markets .............. 64 3.3.3 Brazil and sugar-cane ethanol ............................................................................................... 65 3.3.4 Biodiesel and the EU .............................................................................................................. 67 3 3.4 Relative role of biofuels versus other factors in the 2007/2012 price increases ............... 69 3.4.1 Other factors relevant to food price increase in the recent context ....................................... 70 3.4.2 Biofuels can act to amplify the role of other factors in price rise............................................ 71 3.4.3 Synthesis of main findings and estimates with respect to the recent commodity price increase ...................................................................................................... 72 3.5 Can robust conclusions emerge? ........................................................................................... 72 3.6 Policy implications of fast-changing contexts for crop-based biofuels ............................. 74 4 BIOFUELS AND LAND ......................................................................................77 4.1 The issue of land availability ................................................................................................... 78 4.1.1 “Suitable” land available for crop production ......................................................................... 79 4.1.2 Global demand for land resulting from projections of food and feed demand ....................... 80 4.1.3 Additional land needs in light of envisaged biofuels and bioenergy goals............................. 82 4.2 Biofuels within the “land grab” or “international large-scale land acquisitions” debates .................................................................................. 84 4.2.1 Data sources on land investments ......................................................................................... 84 4.2.2 Analysis of the evidence provided by the data sources ......................................................... 85 4.2.3 Biofuel investments and customary land rights ..................................................................... 86 4.2.4 Best use of available land? Large-scale versus smallholder strategies ................................ 87 4.2.5 Consensus on need for institutional reforms on governing land investments ....................... 87 4.3 Direct, indirect land use change, and competing demands ................................................ 89 4.3.1 Direct and indirect land use change ....................................................................................... 89 4.3.2 The potential of “marginal” and “abandoned” land ................................................................. 90 4.3.3 Taking into account multiple functions of land use ................................................................ 91 5 BIOFUELS AND BIOENERGY: SOCIO-ECONOMIC IMPACTS AND DEVELOPMENT PERSPECTIVES ....................................................................93 5.1 The Brazilian ethanol experience from the perspective of local and rural development ............................................................................................................. 94 5.2 The Brazilian biodiesel programme: an alternative development strategy? ..................... 95 5.3 Attempts to evaluate socio-economic implications of biofuels/energy developments in the developing country context .........................................................................................
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