BIOFUELS: IS THE CURE WORSE THAN THE DISEASE?

This document is prepared on the responsibility of the Chair of the Round Table on Sustainable Development at the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the OECD or of the governments of its Member countries.

Biofuels have been championed as an energy source that can increase security of supply, reduce vehicle emissions and provide a new income stream for farmers. These claims are contested, however. Critics assert that biofuels will increase energy-price volatility, food prices and even life-cycle emissions of greenhouse gases. This paper presents salient facts and figures to shed light on these controversial issues and asks whether biofuels offer a cure that is worse than the disease they seek to heal. The information gathered in this paper gives rise to two fundamental questions:

1. Do the technical means exist to produce biofuels in ways that enable the world to meet demand for transportation energy in more secure and less harmful ways, on a meaningful scale and without compromising the ability to feed a growing population?

2. Do current national and international policies that promote the production of biofuels represent the most cost-effective means of using biomass and the best way forward for the transport sector?