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US & Asian organisations put case forward for biodiesel production

18 July 2008

Claims that the global biofuels development would cause a food shortage and a subsequent surge in prices have been refuted by the US National Biodiesel Board (NBB) and the Asian Institute of Petrolium Studies Inc (AIPSI).

Both organisations have said that biofuels-related feedstock demand would have a "limited impact" on global food supply and pricing.

US NBB chief executive Joe Jobe said that production of the fuels was having a positive impact. He explained: "The presence of biofuels in the market, in fact, [is] helping keep US gas prices - now at more than $4 (£2) a gallon - from going even higher, amid skyrocketing prices in the world market.¿

AIPSI managing director Rafael Diaz concurred with the view that the impact of biofuel production on food costs had been grossly exaggerated.

Mr Diaz said: "To say it has no impact [on the food supply] is naivete, but to pass on nearly the whole problem of food supply and prices as being the result of biofuels is outright ridiculous."

There is currently a mandate which states that there should be a two per cent biodiesel blend by 2009 and Diaz said this would mean demand increasing between 112 million and 114 million litres.