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A Discussion on Biofuel Policies: A Key Link in the Water-Food-Energy Nexus

Shutterstock/Csaba Deli

News  |  11 Dec 2013

The Nexus and Biofuel // A Discussion on Biofuel Policies: A Key Link in the Water-Food-Energy Nexus

"In the last few months, the European Union started to take a closer look at the negative implications of biofuel subsidies and, in particular, the mandates, imposing biofuel as a percentage of transportation energy consumed," writes Peter Brabeck-Letmathe, Chairman of the Board at Nestlé S.A. "The closer look started to have an impact; but policy change remains slow, too slow."

A letter to Ministers for Energy of the European Union by Peter Brabeck-Letmathe, Chairman of the Board at Nestlé S.A, and Paul Polman from Unilever.

Therefore, Peter Brabeck-Letmathe from Nestlé together with Paul Polman from Unilever wrote to Ministers for Energy of the European Union. "While in my own argumentation", says Brabeck-Letmathe, "I mostly focus on the water as linchpin in the water-food-energy nexus for biofuels — up to 9,100 litres of freshwater are needed to grow the soy needed for 1 litre of biodiesel — the text below lists some other facts and figures to be considered."

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<<fotos/personen/peter_brabeck-letmathe_120_b.jpg|c|Peter Brabeck-Letmathe>>

Peter Brabeck-Letmathe

led the Nestlé Group from 1997 to 2008, first as CEO, until 2005, and then as Chairman and CEO. In April 2008, he handed over the office of CEO and remained Chairman of the Board of Nestlé S.A.

Peter Brabeck-Letmathe serves as Vice-Chairman of both L'Oréal and Credit Suisse Group. He is Chairman of the "2030 Water Resources Group", a Public Private Partnership housed in the IFC/World Bank, Washington. Mr. Brabeck-Letmathe is also the Chairman of the Board of Nestlé Health Science S.A. and of Delta Topco Limited (Formula 1). In addition, he is member of the Exxon Mobil Corporation Board and the European Round Table of Industrialists (ERT), where he is part of the Steering Committee and chairs the Foreign Economic Relations workgroup.

This article was originally posted on {http://www.linkedin.com/today/post/article/20131209144033-230883806-a-discussion-on-biofuel-policies-a-key-link-in-the-water-food-energy-nexus|Mr Brabeck-Letmathe's LinkedIn page}. He is also publishing his thoughts on water issues on his blog {www.water-challenge.com.|Water Challenge}.

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"We are writing you to further your leadership in the battle against hunger and poverty by limiting the amount of food crops used to produce biofuels.

"The proposed 5% cap by the European Commission would have been a significant step towards phasing out the use of food for fuel. A 1% increase in biofuels produced from food crops would divert enough food to feed 34 million people. Across the G8 the amount of food consumed as fuel annually is already enough to feed more than 441 million people for a year, while the European taxpayer subsidizes the industry to the tune of €6.2 billion per year.

"Biofuels continue to lead to food price rises. The EU's current biofuels targets, those that are being reviewed, could by 2020 increase oilseed prices by up to 20%, vegetable oil prices as much as 36%, maize by as much as 22%, sugar by as much as 21% and wheat by as much as 13%. The World Bank, OECD, WTO, IFPRI, IMF, and five other UN agencies have all told G20 governments that 'prices are substantially higher than they would be if no biofuels were produced.'

"The cost of food still represents, for many European families, a substantial share of their income. Any measure that can contribute to alleviate this situation is beneficial to Europe's economy and prosperity. But we also must keep in mind poor families in developing countries, where spending on staple food for subsistence, particularly cereals most affected by biofuel subsidies, amount to 30-50% of disposable incomes.

"Furthermore, many of the recent large-scale land acquisitions in Africa, and worldwide, have taken place for biofuels. A report from the World Economic Forum also showed that Africa will become a very significant exporter of biofuels to the EU by 2020. ActionAid's research documenting European biofuels activities in Africa suggests that between 2009 and 2013, 98 biofuels projects have been started so far, covering six million hectares of land. These projects alone will be responsible for the yearly use of 35-40 km^3 of fresh water. This volume corresponds to 7-8 times the yearly needs of fresh water for the public water supply in Germany.

"The European Parliament also discussed the opportunity to introduce correct accounting for the full impact of biofuels on our climate, taking into consideration the CO2 emissions caused by deforestation and other negative factors caused by the production of biofuels (so-called Indirect Land Use Change factors - ILUC). The vote did introduce binding ILUC factors, but only from 2020.

"Ahead of the next European Energy Council meeting in December, we urge you to strongly support a standstill-cap on biofuels that compete for food, towards an eventual phasing-out, and the introduction of binding ILUC factor accounting."

Keywords

biodiesel ; biofuel ; biofuel exports ; biofuel subsidies ; climate ; energy production ; food exports ; food for fuel ; food price ; freshwater ; freshwater withdrawal ; greenhouse-gas emissions ; hunger ; hunger reduction ; indirect land use change (ILUC) ; land acquisition ; nexus ; nexus approach ; oilseeds ; subsidies ; vegetable oil ; water for energy ; water-energy-food security nexus ; ActionAid International ; European Commission (EC) ; European Energy Council ; European Parliament ; G8 ; International Food Policy Research Institute (IFPRI) ; International Monetary Fund (IMF) ; Nestlé ; Organisation for Economic Co-operation and Development (OECD) ; Unilever ; United Nations (UN) ; United Nations World Trade Organization (WTO) ; World Bank ; World Economic Forum ; Brabeck-Letmathe, Peter ; Polman, Paul ; Africa ; Europe

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