By Carola Hoyos and Javier Blas in London
Published: April 25 2008 22:30 | Last updated: April 25 2008 22:30
Biofuel production is critical to meeting current and future fuel
demand in spite of its possible role in driving up food prices, the
west's energy watchdog has warned.
Amid signs of a growing backlash against biofuels in the wake of the
worst food price spike since the 1970s, the International Energy
Agency said that the crop-based fuel was vital to meeting current and
EU eyes stricter standards for biofuel imports - Apr-27
Consensus on crops turns into acrimony - Apr-26
UN says oil rise hits food prices harder - Apr-26
Environmental benefits not always so great - Apr-26
Alarm and irritation from carmakers - Apr-26
Comment: Food or fuel? An agonising policy choice - Apr-25
Biofuels already make up about 50 per cent of the extra fuel coming to
the market from sources outside the Opec's oil cartel this year. This
explains why fears of a retreat from biofuels this week helped drive
oil prices to record levels.
William Ramsey, deputy executive director at the IEA, said: "If we
didn't have those barrels, I am not sure where we would be getting
those half a million barrels [from]," adding that Opec has said it
would not raise supply.
The warning comes as the backlash from rocketing food prices has
increased pressure on the European Union and the US to review their
support of fuel made from crops.
The views of the IEA carry significant weight in Europe and the US and
policymakers have warned that the debate about biofuels should take
into account its implications for energy markets and climate change.
The issue has been put on the agenda for the next G8 summit in July.
However, the UN's Food and Agriculture Organisation says biofuels are
not a major cause of the food crisis. The FAO estimates biofuels
account for 10 per cent of the food price spike.
Copyright The Financial Times Limited 2008