Unilever comes out against worldwide rush to biofuels

Tim Webb
The Guardian,
Monday October 6 2008

Unilever, the food and consumer goods group, has thrown its weight behind moves to scrap mandatory biofuel targets and subsidies. It is backing recommendations being made today to Commonwealth finance ministers at their annual meeting in St Lucia to improve food security and prevent famine.
Unilever is concerned that subsidies for biofuels are driving up food prices and the cost of its products. The group is a member of the Commonwealth Business Council (CBC), which is presenting the recommendations to the ministers. The CBC is chaired by Paul Skinner, chairman of the mining group Rio Tinto; other members include the Indian steel magnate Lakshmi Mittal and John Studzinski of the private equity firm Blackstone.
If ministers adopt the recommendations, the CBC hopes that they will lobby their counterparts for curbs on biofuels at the International Monetary Fund and World Bank summits in Washington later in the week.
Mohan Kaul, director general of the CBC, said: "This would be the first major world signal to stop the current rush to produce energy from biofuels that has impacted on food, security and prices."
It is also the first time that a major conglomerate such as Unilever has voiced its opposition.
Most environmentalists and non-governmental organisations are already opposed to biofuels, which use oil mostly produced from food crops, which is then blended with petrol or diesel. By reducing the consumption of fossil fuels, biofuels are supposed to reduce greenhouse gas emissions, but many types are so inefficient that they result in higher emissions. For example, biofuels from sugar cane in Brazil have 10% of the carbon footprint of traditional fuel, while maize-based fuels in the US have at least 80% to 90%. Biofuels are also accelerating the destruction of rainforests to clear the extra arable land needed. Environmentalists estimate that deforestation is responsible for one-quarter of the world's emissions.
The large-scale diversion of food crops into biofuel production has contributed to record food prices. According to the International Food Policy Research Institute, the forecast increase in biofuel production will result in maize prices increasing by more than two-thirds in future.
In the UK, from April this year, petrol stations must supply more biofuels at the pumps. By 2010, 5% of all petrol and diesel must be made from biofuels. However, this summer the government announced that it was considering reducing the targets because of concerns that biofuels are doing more harm than good.
But India, a member of the Commonwealth, announced plans last month to increase its own target, so that by 2017, a fifth of its road fuel must be produced from biofuels. The US, which is the world's largest biofuel producer, shows no sign of reviewing its policy. It is estimated to use more than a third of its domestic maize crop to produce bioethanol.