OECD report on Biofuels

The recent OECD report on biofuels is a must read for lawmakers consider Governor’s plan to mandate ethanol use and to subsidize ethanol production in PA:

The conclusion must be that the potential of the current technologies of choice — ethanol and biodiesel — to deliver a major contribution to the energy demands of the transport sector without compromising food prices and the environment is very limited.

The difference between production potential and demand is high in South America and to a lesser extent Africa, as these countries that have the potential to export to North America, Europe and Asia (Fig. 6). However, trade barriers and subsidies currently prevent large-scale
trade from taking place.

Read: we will have to import ethanol to meet mandated use … so much for “energy independence”

In reality, however, increased biofuels production to the target levels assumed for the EU, US, Brazil and others will instead lead to upward pressure on feedstock prices.

Hence the higher prices for food, milk, candy, and even beer here in the US.

Most biofuels have an overall environmental performance that is worse than gasoline, though their relative performance differs considerably (Fig. 8). EMPA gave maize-based ethanol in the USA a poor environmental score, whereas it determined that ethanol from sugar beets and sugarcane are only moderately better than gasoline in terms of their overall environmental impacts. Biodiesel scores negatively as well, in general. Only when waste products such as recycled cooking oils are used do their overall environmental performances fare better than that of gasoline. Biofuels made from woody biomass rated better than gasoline in all cases.

And the hits just keep on rolling:

The paradox noted above is also that greater biofuel production may lead to less protection against high petroleum prices. …

The overall cost-effectiveness of biofuels seems to be low in almost all cases. …

Governments should cease creating new mandates for biofuels and investigate ways to phase them out.

So if ethanol an biodiesel is bad for the environment, raises prices for food, won’t make us “energy independent,” why is Governor Rendell pushing it? I think we covered that yesterday (hint: $$$$).