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As of yesterday, all fuel sold at forecourts in the UK has to contain 5% biofuel, thanks to an EU Directive. Good news for the environment? On the face of it, yes. When we burn biofuels, it is carbon that was absorbed from the atmosphere by the crops used to make the biofuel that gets released back into the atmosphere. So, carbon neutral fuel, yes? Well, no actually. You see, you also have to take into account the use of fertilisers and farm machinery when the crops are growing and the refining process needed to create the fuels. And even more importantly, to make room to grow more biofuels, rainforests have already been destroyed and peatlands drained.

A report issued today by Chatham House shows that biofuels will cost us more too. Biofuel comes in two basic forms – ethanol, which can be added to petrol and biodiesel which can be an ingredient in diesel or which can be used as a standalone fuel for diesel vehicles.

Ethanol is refined from crops like corn, wheat and sugar. Biodiesel can be derived from rapeseed oil, palm oil, in fact pretty much any sort of vegetable oil, or from used cooking oil, which is the most common source of biodiesel in the UK at the moment.

The worrying thing is that if the EU directives are followed through as currently planned, then by 2020, petrol will need to contain around 14% ethanol and diesel will have to contain 10% biodiesel.

That means that biofuel production would have to increase significantly, potentially causing the creation of more biofuel plantations in areas that are currently rainforest (palm oil could become a more significant ingredient of biodiesel) and threatening food security by pushing up the price of food crops (wheat, sugar, corn etc.) used in the production of ethanol for petrol.

The study shows that while there is potential for more used cooking oil to be turned into biodiesel in the UK, the requirements will far outstrip what can be supplied, meaning that more biodiesel will have to be produced from palm or rapeseed oils.

The report also shows that greater environmental benefits are likely to be achieved through advances in engine technology.

So does an increased use of biofuel seem like a good idea? Where it’s recycling of used cooking oil, perhaps. But if it means that more of the crops that could feed hungry people around the world are being burned in engines instead and that previously unspoiled areas of rainforest are being cleared to make way for oil palms, then I think not.

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