The Bio-Fuel Insanity

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At the G7, US President Joe Biden, along with Canada, is going to block Prime Minister Boris Johnsons call for a temporary pause in bio-fuel mandates, so that grain can be grown to help reduce prices after Ukrainian exports have been halted by the Russian invasion.

The UK’s initiative is backed by Germany, but the US and Canada are looking to block the idea to protect their farmers and Net-Zero commitments. They too suggest that this scheme would further increase already crippling fuel prices.

The US is the world leader in ethanol and bio-diesel production, and with critical mid-term elections coming up, Biden’s Democrats are seeking to secure votes in their rural bases. They seem however to have been sniffing the bio-fumes.

Ethanol, or the E10 component of fuel, makes up around 0.1% of the global fuel supply and so the effect of reducing this supply will be negligible in terms of both whole sale fuel prices, and climate commitments. But what good is bio-fuel when you cant feed the driver? Humans need ‘fuel’ more so than our cars, and if one thing has been made apparent by the Ukraine War is that the West is deeply vulnerable to disruptions in food supplies. The UK, and Western Europe as a whole, depend on imports of food stuffs to feed their populations. This has been the case for around a century, but with cheaper grains abroad and the widening palate of European consumers, this dependency has deepened.

Although it is true, we cannot grow things like bananas or avocados, at least not on a viable commercial scale, we can grow grains such wheat or maize which still make up the bulk of our diets. However, a great deal of land that could be put to work growing our food is being used to grow bio-fuels, something which shouldn’t have been the case in the first place.

The argument around growing them is based on sourcing our fuel from places other than fossil fuels, which although an important point, falls down when we see that bio-ethanol has such a minor influence on our fuel supply, far less an influence as it does on our food supply.

Relying on imports for food is not an issue when times are good, but times are not good, and we just don’t have the backup for that rainy day. During the Second World War, enormous impetus was placed on growing food in any place we can because the Germans knew Britain depended on food imports, and if that was stopped, we could be starved into submission — and we understood that too. In fact, Churchill said that the situation of the North Atlantic convoys was the only thing that kept him up at night.

The moves by the US and Canada could be just simple protectionism, something in which the US is well versed in, but it too shows what happens when ideology hits against cold hard facts. Climate Change is very much an issue, but it cannot be tackled by ideology. We need sensible solutions and the bottom line is, food is more important than fuel. Actually, our vulnerability to the loss of food supplies is very much one of the key issues of Climate Change. So having the ability to grow more of our own is something that will become more important over time.

Biden has said he wants to expand the growth of bio-fuels over the summer because ‘bio-fuels have a role to play right now’. It appears then that the President just does not have his priorities straight.

The current jump in grain prices could mean a better price for farmers, but soaring inflation will be hitting them probably harder than most, and securing our grain supplies will at least take pressure away from one factor feeding inflation. For someone who’s seen as the leader of the free world, not helping to address the immediate issue of food is irresponsible. All down to the obsession with Net-Zero.