Biofuel scam highlights import-export madness

We already knew there were problems with biofuel: world food production has fallen as land is devoted to growing petrol substitutes, and elsewhere virgin rainforest is sacrificed for the same reason.

Now a trading scam has come to light which undermines still more the claim that biofuels reduce emissions. To take advantage of US agricultural subsidies, European producers are shipping their fuel to the US, adding a splash of US fuel to qualify for 11p per litre in subsidy - then shipping it back to Europe to sell at a discount to domestic prices.

The practice is not illegal, but the environmental cost of shipping fuel across the Atlantic - and back - makes a mockery of biofuel's few remaining green credentials.

The scam highlights a wider flaw in conventional economics: the overlooked environmental cost of international trade generally. We import and export almost identical amounts of many products, at vast cost in energy - but this is overlooked, nay encouraged, because trade increases GDP (even when, as in this joke, it involves a pair of economists eating piles of dog poo).

Last year we learned that the seafood producer Young's ships Scottish-caught scampi to Thailand to be peeled by hand, then shipped back. Young's argued that this was "carbon neutral" because industrial peeling in Scotland would use as much energy as the shipping - conveniently disregarding the climate-friendly alternative of peeling by hand in Scotland (which would also provide more British jobs).

I daresay that some twister in the biofuels industry is even now coming up with an explanation as to how their own trading scam helps the environment, and possibly British jobs too. I only hope it's as funny as the joke about the coprophagic economists.

Comments

[Jon Blake]

Importing ethanol from the US to meet green targets is a joke. It is a well established fact that ethanol production in the US uses more resources and produces more emissions than using straight fossil fuels. In Europe we can get more out than we put in using ethanol but only marginally (about 10% I believe). The fuel used to transport it the distances described here must completely negate this.

In response to Steven, the reason we care about biofuel is that it gives us an opportunity to extend the quantity of oil we have and become more self-sufficient in supplying fuel. Also, in theory biofuels should help reduce global warming. From what I know about global warming and its effect on the UK climate, I am reliably informed that the UK should get colder and wetter before it gets warmer.

[windjammer]

I am so amazed that there are people in the universe that believe ethanol has any intrinsic value as an alternate fuel. This whole madcap scheme to utilize foodstuffs for fuel, while wasting many gallons of water for each gallon of ethanol, utilizing much fertilizer that adds to pollution through runoff and all of the other attendant problems like taxpayer subsidies, lower gas mileage etc etc is considered a viable solution to gasoline is nuts.

[GMAC]

Thermal energy, solar energy, wind energy: some examples of low profit ventures. Consider the up front CAPEX. What expected ROI would any reasonable investor seek? Over what period of time would an investmen be expected to mature?
Renewable energy offers low ROI for high CAPEX, with return on investment taking a long time. Hydrocarbons offer better investment opportunities.

[Steven]

What global warming? I have snow in my garden today in Summer ! So..err..why are we subsidising/encouraging bio fuel ?

[Chris Sawyer]

The real bio fuel scam is that if they weren't grown - taking in C02 - then other crops/herbage would be grown or grow in their place and guess what, they take in C02.
Why oh why don't we invest in geo thermal. Bore hole or snake of pipe under the lawn with a heat exchanger. This actually takes heat out of the earth to heat our houses with!