World Bank ousts energy costs as true culprit for rising food prices
National Biodiesel Board
JEFFERSON CITY, MO — The World Bank recently released a report reversing claims that wrongly faulted biofuels for food price increases. “As the first commercially available advanced biofuel available in the U.S., biodiesel plays an important role to cut greenhouse gas emissions and reduce our dependence on fossil fuels. Attempts to perpetuate a myth of food versus fuel are invalidated as World Bank identifies energy costs as the true price driver,” said National Biodiesel Board CEO Joe Jobe
The recent report, “Placing the 2006/08 Commodity Price Boom into Perspective,” drastically reduces estimates of biofuels impact on commodity prices. World Bank economists now say that initial estimates were too high and note, “This paper concludes that a stronger link between energy and non-energy commodity prices is likely to be the dominant influence on developments in commodity, and especially food, markets.” The report also points out that biofuels only account for about 1.5 percent of global grains and oilseeds use.
“Food price inflation of 2008 was all about energy price inflation and the oil shock – which is what biofuels aim to address by reducing our reliance on crude oil as the nation’s nearly singular source of transportation fuel. Since the initial study was the basis of opponent’s claims, the new report deflates the hot air behind the tired food v fuel debate and reinforces that biodiesel provides a renewable alternative to petroleum without negatively impacting food markets,” Jobe said.
Real facts about biodiesel are often overlooked. Consider:
* In 2008 the global economy saw significant food price inflation which corresponded with an oil shock that saw oil more than double in 12 months to $147/bbl. From April 2008 to September 2008, oil then dropped from $147/bbl to $33/bbl. Predictably food prices eventually followed. Since then, global biofuels volumes have steadily increased yet food prices have stayed moderated.
* Biodiesel made from soybean oil creates a new market for soybean oil, which is coproduced when a bean is ground for its 80 percent meal. This increases the total bean value and makes the meal portion more cost competitive for protein markets, which has a net positive impact on the food supply.
* Biodiesel is the most diverse fuel on the planet, made from a wide variety of regionally abundant by-products of crop and livestock production. Biodiesel has the highest fossil energy balance of any domestic fuel, has the highest energy content of any alternative fuel, and offers the best greenhouse gas reduction of any domestic liquid transportation fuel.
# # # Additional information about biodiesel is available online at biodiesel.org.
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