Worldwide Biofuels Production Guidelines Set by G8-Led Group of Nations

The U.S. and China led 23 nations in agreeing on the the first guidelines for producing biofuel from crops such as palm oil, an agricultural commodity used for cooking and to make detergents as well as fuel.

The Rome-based Global Bioenergy Partnership today released a voluntary policy for producing and using biomass and biofuels in ways that don’t add to climate change or affect food prices. The partnership, established in 2005 by the Group of Eight nations and five emerging economies, also includes 13 international organizations and institutions.

In February, palm oil climbed to almost a three-year high as consumers and companies increased their use of the product in cooking, detergents, cosmetics and biodiesel. The boom may be exacerbating global warming as growers destroy rainforests, needed to store carbon dioxide, to plant palm-oil trees, said Corrado Clini, chairman of the partnership and director general of Italy’s Ministry for the Environment, Land and Sea.

“Biofuels could cover up to 25 percent of the fuels portfolio in the next 30 years,” Clini said in an interview. “The environmental certification of biofuels would be a very important driver for promoting biofuels in the market.”

Biomass is a renewable energy source, such as wood, crops, manure or some garbage, that is turned into a biofuel, often by burning.

The partnership developed 24 indicators to assess the sustainability of biofuels based on greenhouse-gas emissions, biological diversity, the price and supply of a national food basket, access to energy, economic development and energy security. The indicators don’t include thresholds or limits and don’t constitute a standard, according to a statement by the group.

Full Costs

Governments have rushed to develop bioenergy alternatives to fossil fuels without understanding the full costs, the United Nations Food and Agriculture Organization said in a 2010 report.

“Bioenergy potentially offers poor countries many advantages if properly managed,” according to the report. “However, bioenergy developments have also been a cause for deep concern regarding their economic, social and environmental viability, because of their potential negative impacts on food security through crowding out of staple food production and on the environment due to natural resource scarcity and intensive agriculture production.”

On Feb. 10, palm oil rose to 3,967 ringgit ($1,304) per metric ton on the Malaysia Derivatives Exchange, the highest since March 2008.

“Palm oil produced in Indonesia was produced through the destruction of the rainforest,” Clini said. “We said in Europe that it’s not possible to import and use biofuels for reducing the carbon intensity of our economies when biofuels are produced in an unsustainable way.”

To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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