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OECD: Biofuels: Is the Cure Worse Than the Disease?

Authors: Richard Doornbosch, and Ronald Steenblik
September 12, 2007



Biofuels have been championed as an energy source that can increase security of supply, reduce vehicle emissions and provide a new income stream for farmers. These claims are contested, however. Critics assert that biofuels will increase energy-price volatility, food prices and even life-cycle emissions of greenhouse gases. This paper presents salient facts and figures to shed light on these controversial issues and asks whether biofuels offer a cure that is worse than the disease they seek to heal.


Global production of biofuels amounted to 0.8 EJ in 2005, or roughly 1%of total road transport fuel consumption. Technically, up to 20 EJ from conventional ethanol and biodiesel, or 11% of total demand for liquid fuels in the transport sector, has been judged possible by 2050.

An expansion on this scale could not be achieved, however, without significant impacts on the wider global economy. In theory there might be enough land available around the globe to feed an ever increasing world population and produce sufficient biomass feedstock simultaneously, but it is more likely that land-use constraints will limit the amount of new land that can be brought into production leading to a “food-versus-fuel” debate.

Moreover, land use will be driven by the net private benefit owners can derive from their land. Any diversion of land from food or feed production to production of energy biomass will influence food prices from the start, as both compete for the same inputs. The effects on farm commodity prices can already be seen today. The rapid growth of the biofuels industry is likely to keep these prices high and rising throughout at least the next decade (OECD/FAO, 2007).

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