The competition between food crops and non food crops for energy : what are the effects on agricultural structures and on the use of land ?

15-05-2008

This study examines the effects of the EU biofuel policy on European agriculture. The requirements in terms of feedstock and arable land of the EU biofuel targets have been evaluated by assuming scenarios of different price levels for agricultural commodities and the possibility of the EU biofuel industry to be alternatively supplied by European crops or through import. The research has also investigated the technical adaptation of agricultural holdings, the consequences of the prospective CAP changes, and the impact on the EU food industry and on the environment (land resources, biodiversity, GHG balances, sustainable feedstock production). Executive summary The start of the EU biofuel policy in 2003 - with the provision of incorporation targets and fiscal incentives - has encouraged a remarkable expansion of the European biofuel industry in both the biodiesel and the bioethanol sectors, and an equally significant growth of production capacity is also expected in the short-medium term. These changes have involved the main world competitors, which in the past (Brazil) or more recently (US), launched aggressive biofuel policies. These developments have activated an additional demand for agricultural commodities together with an increased competition between the food and agro-energy sectors for the use of land resources. However, increasing demand in the agricultural markets may make feedstock prices rise at levels that might hinder the progress of the biofuel industry and the fulfilment of the incorporation targets. In addition, the rise in the price of oil is creating cross effects between oil, biofuel production and the agricultural markets, which are critical for agriculture and food supplies. The potential impacts of competition between food and non-food uses of land are analysed through a simulation model by assuming the EU 2010 target of 5.75% incorporation of biofuels as a short-medium term perspective, and the 2020 target of 10% as a long term perspective.

This study examines the effects of the EU biofuel policy on European agriculture. The requirements in terms of feedstock and arable land of the EU biofuel targets have been evaluated by assuming scenarios of different price levels for agricultural commodities and the possibility of the EU biofuel industry to be alternatively supplied by European crops or through import. The research has also investigated the technical adaptation of agricultural holdings, the consequences of the prospective CAP changes, and the impact on the EU food industry and on the environment (land resources, biodiversity, GHG balances, sustainable feedstock production). Executive summary The start of the EU biofuel policy in 2003 - with the provision of incorporation targets and fiscal incentives - has encouraged a remarkable expansion of the European biofuel industry in both the biodiesel and the bioethanol sectors, and an equally significant growth of production capacity is also expected in the short-medium term. These changes have involved the main world competitors, which in the past (Brazil) or more recently (US), launched aggressive biofuel policies. These developments have activated an additional demand for agricultural commodities together with an increased competition between the food and agro-energy sectors for the use of land resources. However, increasing demand in the agricultural markets may make feedstock prices rise at levels that might hinder the progress of the biofuel industry and the fulfilment of the incorporation targets. In addition, the rise in the price of oil is creating cross effects between oil, biofuel production and the agricultural markets, which are critical for agriculture and food supplies. The potential impacts of competition between food and non-food uses of land are analysed through a simulation model by assuming the EU 2010 target of 5.75% incorporation of biofuels as a short-medium term perspective, and the 2020 target of 10% as a long term perspective.

Údar seachtarach

Luigi Vannini, Maurizio Aragrande, Massimo Canali, Gianluca Macchi, Areté Srl, Mauro Bruni, Enrica Gentile, Francesco Vanni and Alberico Loi (Dipartimento di Economia ed Ingegneria Agrarie - DEIAGRA, Università di Bologna, Italy)