OECD report says massive biofuel subsidies not helping to cut greenhouse gases

The Associated Press
Published: July 16, 2008

BRUSSELS, Belgium: Massive government subsidies for biofuels are not helping to reduce greenhouse gas emissions, according to an OECD report released Wednesday.
The U.S., EU and Canada spent €11 billion (US$17.6 billion) in public money to support energy crops in 2006 — and will more than double that over the next 10 years, according to estimates by the Paris-based Organization for Economic Cooperation and Development.
But this failed to reduce greenhouse gas emissions from transport by more than 1 percent, the OECD said — recommending that governments would see more savings from a lower-cost push toward cutting energy use overall.
"Biofuels produced from wheat, sugar beet or vegetable oils rarely provide greenhouse gas emission savings of more than 30 percent to 60 percent, while corn — maize — based ethanol generally allows for savings of less than 30 percent," the report said.
"Generally the costs of reducing greenhouse gas emissions by saving energy are lower than by switching to alternative energy sources, in particular biofuels," it said.

Biofuels can generate large amounts of greenhouse gas as land is cleared and fertilizer, used to help the crops grow, triggers soil bacteria to release some global warming gases.
Bioethanol or biodiesel made from these crops are usually blended into fuel to cut down the overall amount of oil burned in vehicles.
The OECD says efforts to substitute fossil fuels have not been very successful — fossil fuel use in transport is down less than 1 percent and by 2 percent to 3 percent for EU diesel.
"These relatively modest effects come at a projected cost equivalent to about US$960 (€600) to US$1,700 (€1,063) per metric ton (1.1 ton) of carbon dioxide equivalent saved, or of roughly US$0.80 (€0.50) to US$7 (€4.38) per liter (a quarter of a gallon) of fossil fuel not used," it said.
Ethanol from sugarcane grown in Brazil tends to be far more effective at reducing climate change emissions, it said.
The OECD called for governments to put the priority on reducing energy consumption by shifting to more energy efficient forms of transport and improving fuel efficiency for all vehicles.
It said governments could also more easily make cheaper emission reductions by insulating buildings better to save on heating costs.