International Energy Agency (IEA) warns against retreat on biofuels

The Financial Times report:

Biofuel production is critical to meeting current and future fuel demand in spite of its possible role in driving up food prices, the west’s energy watchdog has warned.[...] the International Energy Agency said that the crop-based fuel was vital to meeting current and future demand.

Biofuels already make up about 50 per cent of the extra fuel coming to the market from sources outside the Opec’s oil cartel this year. This explains why fears of a retreat from biofuels this week helped drive oil prices to record levels.

So it’s very clear why the Defenders of the Status Quo are bashing ethanol and blaming it for food price increases — any decrease in ethanol production will drive an increase in oil price.

William Ramsey, deputy executive director at the IEA, said: “If we didn’t have those barrels, I am not sure where we would be getting those half a million barrels [from],” adding that Opec has said it would not raise supply. [...]

the UN’s Food and Agriculture Organisation says biofuels are not a major cause of the food crisis. The FAO estimates biofuels account for 10 per cent of the food price spike.

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