Biofuel Shares: Outlook Bleak As Damning New Study Is Published

Regular readers will know that I am sceptical on the future of biofuels – and more evidence emerged over the weekend to support my view.

I do not think that biofuels offer a global panacea to the looming energy crisis and I believe the only reasons that they have risen high on the agenda is due to government subsidies and targets.

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But don’t take my word for it – take a look at what Nobel Prize-winning chemist Paul Crutzen and his colleagues have to say.

They published a study in Atmospheric Chemistry and Physics over the weekend for peer review. The study concluded that burning and growing crops for many biofuels would probably increase total greenhouse gas emissions rather than reduce them.

Crutzen calculated that growing some of the most commonly used biofuel crops releases around twice the amount of nitrous oxide (N2O) than previously thought – and it’s all down to bacteria.

The study discovered that microbes converted 3%-5% of nitrogen to the dangerous greenhouse gas nitrous oxide. This is twice the widely accepted figure of 2% used by the International Panel on Climate Change.

Biofuel Shares Warning: Worse than oil

The conclusions were as follows… For rapeseed biodiesel, the relative warming due to N2O emissions was estimated at 1.0-1.7 times larger than the quasi-cooling effect due to saved fossil CO2 emissions. For corn the figure is 0.9-1.5 times.

There was however some good news…. Crutzen argued that cane sugar bioethanol was a viable alternative to conventional fuels, with a ratio of under 0.9 and as little as 0.5. Good news for Brazil, but the Europeans are focused on rapeseed and the Americans on corn… Oh dear, oh dear…

If this analysis is correct, the use of biofuels will actually make the climate-change situation worse. It is a foolish policy pushed by vested interests.

Indeed, it’s not just the odd Nobel Prize winner that is coming around to this view...

The Organisation for Economic Co-operation and Development (OECD) recently called for an end to Europe’s biofuels target (something I have been advocating for some time.)

The damning report said biofuels’ ability to tackle global warming was very limited and that the sector was only economically viable with large state subsidies (from the pockets of taxpayers like you and I). It also predicted rising food prices and damage to forests and wildlife.

So, when will the EU fools swallow their pride and take a look at these targets in the light of “sustainability” – that all-important watchword? It is patently obvious that this needs to be done.

Nobel Prize winners realise it… economic bodies such as the OECD recognise it… even National Express recognises it. The coach operator withdrew from biofuel trials which would have seen some of its buses running on 30% biodiesel – because there were too many sustainability issues.

Why can’t the EU see what’s going on..? Let’s hope they act before it’s too late…. And, when they do, all those overvalued biofuels shares are really going to slump. You have been warned; again.

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