Conducting food/fuel debate based on facts

UFOP report confirms very good supply situation to the international raw material markets

Berlin, 12 July 2017. Despite the raw material demand for the production of biofuels, the global raw material supply situation to the international markets is characterised by a structural oversupply. This was the conclusion of the “Supply report 2016/2017” published by the Union for the Promotion of Oil and Protein Plants (Union zur Förderung von Oel- und Proteinpflanzen: UFOP). UFOP demands that the debate regarding raw material demand and potential for biofuel production be based on these facts. The promotion of biofuels made from cultivated biomass through quota obligations has long since been internationally established, whereby the motivation for national legal regulations in third countries is the structural oversupply with maize, cereal, sugar cane and vegetable oil.

With this, UFOP notes that the biofuel policy also contributes to market price stabilisation. The current enormous price pressure on plant products in particular is putting a strain on the global income situation in agriculture. Conversely, the policy does not offer a solution for improving the income situation. The pricing and intervention policy as income political control tools were eradicated years ago with the reforms on agricultural policy. Biofuels and the bioenergy sector were and still are the only other added value segments that have made a noticeable contribution to income stabilisation over the past 20 years. Their high suitability for integration and interlinking into existing distribution systems and applications are the basis for this success story.

This is why UFOP demands that the vote now beginning in the European Parliament on the revised version of the Renewable Energy Directive at least does not call into question the achieved results and thus the investor confidence. The cap of 7 percent for biofuels made from cultivated biomass must be carried forward unchanged and integrated in the overall package of measures for the decarbonisation of traffic by 2030. The entry into a decarbonisation strategy that has now become necessary poses extremely large challenges for the transport industry in particular. This is why the Union demands that the overall potential of biomass for producing biofuels be exploited in such a way that it is open to technological approaches and competition on the basis of efficiency. The policy must now provide motivation instead of leaving behind a disappointed industry. The Union notes that the critical debate on biofuels introduced on the market with a view to further intensification of the global climate protection measures resulting from the Paris climate protection agreement is a “representative debate”. This is because the critical debate overlooks how large the future demand for ideally climate-neutrally produced and processed carbon is on the way towards achieving the required decarbonisation of all value-added chains by 2050.

In light of this, UFOP emphasises the internationally created “level-playing-field” based on the global legally stipulated sustainability requirements for biomass raw material production according to EU law as a market access requirement and use of biofuels in the European Union. The EU Commission has the power to further refine the certification systems and requirements for the improvement of a sustainable biomass production here, independent on the end use. Instead, the European Court of Justice had to attest inadequate controls and adjustment measures in its EU Commission report, emphasises UFOP.

The report is available as download here.

The individual charts can be downloaded here.