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As Russia’s war in Ukraine threatens global food supply, Asia needs a rethink of biofuel push
- To produce clean energy, Biofuels use crops that could be put to better use for the food market to offset surge in prices triggered by invasion in Ukraine
- Soaring food and fuel prices put millions at risk of hunger with families unable to afford a basic meal
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As food commodity prices surge at the fastest pace in a decade, experts are warning that policymakers in Asia and elsewhere will soon have to grapple with urgent questions about the use of biofuels.
Countries around the world, from the United States, China, Malaysia and Indonesia all have what is known as a biofuel mandate – where the government requires refiners to blend certain biofuels such as corn-based ethanol, soy-based diesel, palm oil biodiesel and other biofuels into fuel each year or purchase credits from those who do.
But with the price of food commodities jumping sharply since Russia’s invasion of Ukraine, a major grains producer, one mitigation strategy is making more grains available for food and meat production.
In Washington, the Biden administration is considering a waiver of the nation’s biofuel policy, the Renewable Fuel Standard, Reuters reported on March 3. Ukraine and Russia combined account for 75 per cent of world sunflower oil exports and 26 per cent of wheat exports.
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Russia was the top wheat exporter in 2018 and Ukraine the fifth largest, according to World Bank data.
Thomas Mielke, executive director of ISTA Mielke GmbH and publisher of Oil World, which provides global market analysis, said “a new debate about biofuels versus food” emerged in the aftermath of the Ukraine invasion.
Amid the current food crisis and inability of consumers in developing economies to afford the high prices of edible oil, there was increasing demand for biofuel mandates to be reduced, Mielke said.
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