Analysis by Daan Bauwens

BRUSSELS, Sep 19 2012 (IPS) - The European Commission has announced it will limit the amount of crop-based biofuels used in transport, but its newly proposed measures are not nearly enough to curb the disastrous impact of the EU’s biofuel policy around the world. Its effects will only worsen, activists say.

According to the existing European rules at least 10 percent of the EU’s transport energy must come from renewable sources by 2020, primarily through biofuels derived from wheat, soy or rapeseed. But in an unprecedented move, EU Energy Commissioner Günther Oettinger and Climate Commissioner Connie Hedegaard announced Monday that the European Commission (EC) is planning to limit the use of crop-based biofuel to five percent in the total share of renewables in transport fuel.

Just ahead of the meeting, international NGO Oxfam released a new report which demonstrates that Europe’s hunger for biofuels is pushing up global food prices and driving people off their land, resulting in deeper hunger and malnutrition in poor countries.

According to the NGO, despite soy and maize prices being at all-time highs in July and prices of cereals and oil remaining at peak levels in August, the Commission and most governments seemed to turn a blind eye to the devastating impacts that EU biofuels mandates have on food prices and land rights.

At a press briefing after the morning plenary of the informal meeting, European Energy Commissioner Oettinger recognised the fact that the current EU policy had lead to “unfavourable developments such as the tearing down of rainforest to produce biofuel.”

He added that all ministers “agree that every percentage of biofuel higher than five percent should only be achieved by using second generation products like agricultural waste and leftovers instead of food crops.”

“I’m happy the EC is finally recognising the fact that the use of food-crops for fuel is problematic,” says Ruth Kelly, Oxfam’s economic policy advisor and writer of Oxfam’s new report, “but putting a cap of 5 percent on biofuel consumption is ridiculous. At this moment the biofuel use in the EU is only at 4.5 percent. So the new cap of 5 percent is actually an increase of what we’re using at the moment.

“In 2008 biofuels accounted for 3.5 percent of all transport fuels in the EU,” Kelly tells IPS. “That same year, the land that was required to grow crops for those biofuels could have fed 127 million people. The new target of 5 percent is not double, but it is significantly more. Increasing the percentage is obviously not what has to happen right now, given the negative effects we are seeing around the world right now.”

Recent data gathered by Oxfam shows land acquired for biofuels production in the Philippines in 2010 could be used to produce up to 2.4 million metric tonnes of rice, enough to make the country self-sufficient in rice production. According to a recent survey by the International Land Coalition, two-thirds of big land deals in the past ten years are to grow crops that can be used for biofuels such as soy, sugarcane, palm oil and jatropha.

Paraguay has also been hit hard by the EU’s demand for biofuel. According to research by Oxfam, each year 9,000 rural families are evicted and nearly half a million hectares of land are turned into soy fields. For families living beside massive soy plantations in eastern Paraguay, farming has become almost impossible. Water has become increasingly scarce as local resources are used up irrigating the plantations.

As the water table falls, the community has to sink wells twice as deep into the ground to reach drinking water. More than half of the soy grown in Paraguay is exported to Argentina, and much of this is turned into diesel either in Argentina or in Europe to fuel Europe’s cars.

“The key problem is that the EU’s biofuel mandates generate an important demand in the South,” says Constantino Casasbuenas Morales, policy adviser on economic justice at Oxfam UK, and Paraguay expert. “Relatively small countries like Honduras or Paraguay modify their national strategies in order to open up for foreign investment.

“As a consequence, smallholders are evicted from their land and have to move to the capital. Biofuel demand is clearly linked to land concentration, growing city populations and increasing poverty.”