BIOFUELS – AT WHAT COST?

The report examines biofuel subsidies in Australia, Canada, the EU, Switzerland, and the US, finding that government support reached at least US$ 11 billion in 2006. It argues that these measures often fail to cost-effectively reduce greenhouse gas emissions or improve energy security while driving up food prices and causing environmental degradation. The author recommends a moratorium on new first-generation biofuel subsidies and a fundamental rethink of the policy rationale.

• Government support for liquid biofuels in the OECD reached at least US$ 11 billion annually by 2006, with the United States and the European Union providing the bulk of this assistance.
• The report identifies a high degree of 'subsidy stacking,' where biofuel producers access multiple layers of support from federal, state, and municipal governments simultaneously.
• Biofuel mandates and subsidies have contributed to the diversion of food crops to fuel production, increasing the prices of staple foods and consumer products, such as a 60 percent rise in the price of tortillas in Mexico in December 2006.
• The cost of reducing greenhouse gas emissions through biofuels is significantly higher than alternative methods, with costs ranging from US$ 150 to over US$ 1,500 per metric tonne of CO2-equivalent avoided.
• Subsidies for biofuels are found to be an inefficient way to reduce reliance on fossil fuels, with transfers per unit of energy produced typically between US$ 12 and US$ 20 per gigajoule.
• The expansion of biofuel feedstocks, particularly row crops like maize and soybeans, has led to environmental degradation, including increased chemical input use, water depletion from aquifers like the Ogallala, and the growth of the 'dead zone' in the Gulf of Mexico.
• The report argues that the claim that subsidies are temporary is unfounded, as many support measures have existed for decades and the economic viability of biofuels remains dependent on public intervention.
• The use of 'dual-fuel' loopholes in the US allows manufacturers to obtain fuel-economy credits for flexible-fuel vehicles (FFVs) regardless of whether the vehicles actually use ethanol, which the report claims increased oil imports by 80,000 barrels a day in 2005.
• The report recommends an immediate moratorium on new support measures for first-generation biofuels and a transition toward competitive, budget-limited support and a focus on second-generation technologies.

APA

Steenblik, R. (2007). BIOFUELS – AT WHAT COST? International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/biofuels_oecd_synthesis_report.pdf

Chicago

Steenblik, Ronald. BIOFUELS – AT WHAT COST? International Institute for Sustainable Development, 2007. https://www.iisd.org/system/files/publications/biofuels_oecd_synthesis_report.pdf.

Wikipedia

{{cite report |last1=Steenblik |first1=Ronald |title=BIOFUELS – AT WHAT COST? |publisher=International Institute for Sustainable Development |date=September 2007 |url=https://www.iisd.org/system/files/publications/biofuels_oecd_synthesis_report.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{steenblik2007biofuels, author = {Steenblik, Ronald}, title = {{BIOFUELS – AT WHAT COST?}}, institution = {International Institute for Sustainable Development}, year = {2007}, month = sep, url = {https://www.iisd.org/system/files/publications/biofuels_oecd_synthesis_report.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }