Biofuels require little arable land but provide many benefits

By UFOP | January 09, 2020

Although the share of land used for biofuel production increased by 1 percent in 2018, it remains very low. Crop plants are grown on more than 1.56 billion hectares worldwide. These include—among others—grain, oilseeds, protein, sugar and fiber plants, fruits, vegetables, nuts and others. Most of this produce is used as food. Only around 5 percent goes into biofuels production.

At the same time, biofuels production is in most cases very obviously located in places where there is a surplus of feedstock anyway. If the surplus were not used to produce biofuels, it would have to be placed on the global market, where it would weigh heavily on already low feedstock prices.

The use in biofuel production reduces the production overhang, generates extra value added and reduces the need for foreign currency for imports of crude or fossil fuels. The latter is primarily a problem in poorer countries.

Another advantage is the amount of high-quality protein feed that is generated in biofuel production, demand for which is steadily increasing. The amount and quality of these protein feeds have a strong influence on feedstock prices. Consequently, they also determine the amount of land dedicated to growing the feedstocks.

Thus, biofuels are by no means the price drivers in the commodities markets. If necessary, the feedstocks grown for biofuel production are primarily available for food supply. In the case of politically subsidized extensification, this option for “buffering” food demand is omitted.

 
 
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