“We shouldn’t be over-optimistic that fuel production is a solution to all Europe’s farm problems,” Dr Fischler told the Agricultural Engineers Association conference in London this week. “Europe is not in the best competitive position for the production of biofuels.”
It is much cheaper to produce biofuel in Brazil, Argentina and North America. At current oil prices, biofuel production in Europe could only be justified with large amounts of support and that will not be available, he warned.
Dr Fischler described EU plans to source 10% of total fuel consumption from biofuel by 2020 as “very ambitious.” “It can be achieved only with the help of imports and second generation biofuels such as biogas and bioethanol produced from cellulose.”
Key to the viability of biofuels is the price of crude oil, he continued. “If we in Europe are to produce (commercial) biofuel with present plant varieties and without tax exemptions, the price of crude oil would have to reach $90-100 a barrel.”
Speaking after the conference biofuel specialist Peter Clery said: “A crude oil price of $80-90 a barrel would sweep away all the old assumptions about biofuel. The whole of world agriculture would have to be fundamentally re-adjusted towards growing crops for fuel.”
Meanwhile, Stuart Porteous, of the Royal Bank of Scotland, acknowledged the volatility of crude oil prices but forecast it would bracket $40-$50 a barrel over the next five years.
Henry Fell, chairman of the Commercial Farmers Group warned that biofuel was a distraction which might last for 20 years. Food production should be the main business of farming while nuclear sources promised the best source of energy.
“Severe problems with global food supply are looming over the horizon. 70% of cropping in China depends on irrigation and water tables are dropping. Global population is set to increase by 50% by 2050 and Asian diets are moving towards white meat consumption,” said Mr Fell.
“Despite these pressures, the UK proportion of indigenous food has dropped from 87% to 70% within 10 years – a highly imprudent policy.”