The market and food security implications of the development of biofuel production

  • 01/02/2009
  • FAO

With the prospects of higher energy requirements in the longer term and the need for reducing GHG emission, biofuel production could be an important source of sustainable energy supply although it will only represent a small proportion of total energy consumption.
Driven by national objectives for greater energy security, the reduction of greenhouse gas (GHG) emissions and rural development policy, incentives supporting biofuel production have increased in recent years with a greater number of countries adopting a variety of stimulative policies. In combination with higher petroleum prices, support policies, such as consumption mandates, tax incentives, production subsidies and/or border tariffs, have induced a rapid growth in biofuel production and have affected the global distribution of production. The 2008 State of Food and Agriculture (SOFA) - Biofuels: prospects, risks and opportunities reported that feedstock for liquid biofuel production was the largest source of new demand for agricultural products and could be a significant factor affecting markets in the next decade and beyond, depending on the development of second-generation biofuel production. The Session offers an opportunity to discuss and exchange views on the importance of the emerging biofuel sector and its implications for markets and food security as noted in the SOFA report. In light of the considerable market turbulence in the past several years, the Session may wish to provide guidance for future policy development with regard to the future development of the sector in a manner that best meets national and international policy objectives.

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