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Biofuels May Push 120 Million Into Hunger, Qatar’s Shah Says

Biofuel policies in countries from Australia to the U.S. may push 120 million people into hunger by 2050 while doing little to halt climate change, said Mahendra Shah, an advisor to Qatar’s food security program.

So-called first-generation biofuels produced from commodity crops compete with food for land use and fertilizers, resulting in higher grain prices and increased deforestation, Shah said at the MENA Grains Summit in Istanbul today.

World food output will have to rise by at least 70 percent by 2050 to feed a growing world population, according to Shah. The use of crops for biofuels is forecast to raise food prices by 30 percent to 50 percent in that period, Shah said, citing a study by the Organization of the Petroleum Exporting Countries Fund for International Development, or OFID.

“The first generation, we should never have done it,” said Shah, a policy advisor. “Biofuels will trigger an increase in agricultural prices. Biofuels will result in another 120 million people hungry, just because we’re growing biofuels.”

Shah said the world food system is in crisis because natural resources are limited, land quality is worsening and water is scarce, meaning high food prices are here to stay.

“The era of low food prices that we saw until the beginning of the millennium is over,” Shah said. “We’re not going to go back to an era of declining prices.”

Government plans to boost ethanol and biodiesel production and mandates on using them in transport fuel will increase deforestation by between 20 million and 24 million hectares (49 milion to 59 million acres) by 2050 and increase fertilizer use by 10 million tons, the OFID study showed, according to Shah.

Biofuels Versus Food

“Biofuels are also starting to compete with food use, and the question is, how far we will take these biofuels?” Shah said. “If you look at the cereal price index itself, prices will increase substantially over the period. We know that the first generation is not sustainable in the long run.”

In the U.S., 40 percent of the corn crop is used to make ethanol, and rising corn prices because of the increased demand are also lifting wheat and rice prices, according to Shah.

“If you suck corn out of a country’s market like in the U.S. it will affect the amount of corn available for human consumption but also feed,” the adviser said.

Climate-change mitigation from biofuels will be “very limited” before 2050, partly because the corn and sugar cane used to make fuel are high in nitrogen-fertilizer consumption, according to Shah.

“We will make no greenhouse-gases savings for the next 20 years by implementing biofuel policies, because they are working with first-generation crops,” Shah said. “It particularly defeats the whole purpose of saying we’ll use biofuels to reduce climate change.”

Fuel Security

Growing crops for biofuels to reduce reliance on oil may result in 6 percent to 12 percent transport-fuel security in 2030 and 2050, according to Shah.

“If we focused on efficiency in energy use, within less than five years we could reach efficiency savings of 20 percent to 30 percent,” Shah said, adding energy efficiency should be a priority.

The greatest potential for renewable transport fuels to mitigate climate change is in so-called third-generation biofuels produced from non-crop sources such as algae, according to Shah. In the meantime, first-generation biofuels won’t go away, he said.

“The fact remains that those people who invested in factories to process corn into biofuels are going to buy corn at any price,” Shah said. “Industrialists have invested, they’re not going to step back.”

To contact the reporter on this story: Rudy Ruitenberg in Istanbul at rruitenberg@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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