Germany Cancels Biofuel Plans

Fears repercussions from angry motorists

HOLGER J. THUSS (Jena)

“ production may go down as one of the biggest blunders in history. An unholy alliance of environmentalists, agribusiness, biofuel corporations and politicians has been touting ethanol as the cure to all our environmental ills, when in fact it may be doing more harm than good. An array of unintended consequences is wreaking havoc on the economy, food production and, perhaps most ironically, the environment.“

Cinnamon Stillwell, San Francisco Chronicle
April 2, 2008

Fuel Fill Green Car zBerlin — The German government officially reversed plans to impose controversial legislation that would have increased the mandatory ethanol and renewable additives content of gasoline and diesel to 10 percent, a law similar to the US Energy Policy Act of 2005. The government’s rescission was based on fears that imposing the new requirement would boost fuel prices substantially and provoke the ire of some 3 million German motorists.

Under the proposed plan, German car drivers would be prohibited from filling their gas tanks with the new E10 blend fuel mix, forcing them to switch to a more expensive “super plus” gasoline. Environment Minister Sigmar Gabriel, a Social-Democrat, told a news conference in Berlin recently, “We don’t want to take responsibility for several million people, [many of] whom drive old cars only because they live on lower wages, to have to use expensive fuel.”

Gabriel came under pressure from members of his own party, Chancellor Merkel’s Christian Democrats, and various environmental organizations who do not support the new legislation. Markus Soeder, a senior Christian Democrat from Bavaria also said he is “basically skeptical” about the use of biofuel. “In general, the views on biofuel have changed worldwide,” he said, “because the ecological expectations were not fulfilled to an extent that was expected before. One has to address this.”

Interestingly enough, BUND, one of the largest green organizations in Germany, not only blamed so-called “dirty” industries, but also its allies in the former Red-Green government, for its poor handling of this legislation.

Hubert Weigert, president of the organization, viewed Minister Gabriel as “victim” of a policy that “was initiated by the [previous] red-green” coalition and continued to be carried out without any opposition from the present government – a coalition which still attempts to preserve many of the policies of the preceding red-green government. Weigert also asserts, “all warnings by conservationist and environmentalist organizations were more or less trivialized or ignored by Red-Green.” In fact, as much as 70 percent of all biofuels imported to Germany came from countries where precious rain forests had been cleared away.

Other aspects regarding the use of biofuels routinely criticized by environmentalists are its creation of monocultures and its increased pesticide and water use. However, BUND-president Weigert did offer some support for the use of biofuel energy if the fuel was produced in a region that met his organization’s “organic cultivation criteria.”

Harvester zAlso of note, few German politicians and activists seem to raise concern about the impact of biofuel production on global food prices – which in the last several months have risen dramatically. Unlike environmentalists elsewhere in the world, the German greens are more focused on the debate as it impacts the alleged global warming crisis. Despite its many press releases covering the topic, the German Green Party (initiator of the tax privileges for biofuels in 2002) has rarely, if ever, mentioned the link between hunger and diminished use of cropland caused by the production of biofuels.

Only last Wednesday did World Bank President Robert Zoellick mention biofuels as one of the driving forces “that will keep food prices high for years.” According to Zoellick, prices of staples rose to new highs — which is a blow to vulnerable groups, including children. In some developing nations, “prices have gone up 80 percent for staple food” confirms Josette Sheeran, executive director of the U. N. World Food Program.

Moreover, prices of meat and dairy products are rising as well as land once used for growing cattle feed is now devoted to corn and other “energy plants.” According to AP’s Stevenson Jacobs, worldwide demand for corn to feed livestock and those living in cold and wet weather parts of the US will add further pressure to global supply.

According to UPI, several governments have already introduced food rationing measures, Pakistan and Egypt among them. Other governments are imposing price controls and further undermining the global market. Kazakhstan has announced a freeze on grain exports.

Due to the international dimensions of the problem, one key to the solution is the response of the European Union. On the one hand, Slovenian PM Janez Jansa, currently the EU-President, said “We’re not excluding the possibility that we’ll have to amend or revise our goals” to raise the share of biofuels in transport. But only in January, the EU-Commission had presented legislative proposals to address concerns over rising oil prices, energy security and climate change by introducing the E 10 blend.

Fuel Pump Nozzles zAccording to EurActiv, the European Commission is even likely to resist any move to amend the target. It believes that the inclusion of “sustainablility criteria” in the legislation will be sufficient to ensure that only “good” biofuels – those which enable significant CO2 savings compared to fossil fuels and do not menace biodiversity – are utilized. Agriculture Commissioner Mariann Fischer-Boėl even said “price increases are not always a bad thing. European farmers have been waiting for prices to stop declining in real terms for two decades or more! And higher prices can be good news for the between 70-80% of the world’s poorest people who live in rural areas and rely on farming for their livelihood.”

This is, of course, bad news for consumers. Once more, green subsidies ( this time for biofuels)  introduced with the best of intentions, have severe consequences: the government manipulation of food prices at the expense of the world’s poor.

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About the Author: Holger Thuss