On 21 January 2008 the UK Government's Environmental Audit Committee (EAC) published its report …

• Background
• Biofuels: a global imperative
• Rising to the challenge: industry, policy and technology
• A European opportunity
• The way forward
• References

The substance of the EAC's argument is as follows: no biofuel is carbon-neutral today. Although GHG emissions from each litre of fuel burned in an internal combustion engine are absorbed by plants grown to produce the next litre, net CO₂ emissions are released by fossil fuels used in the agricultural, manufacturing and distribution processes that produce the fuel. In the most extreme cases, GHG emissions from fossil fuel inputs can exceed those avoided by the end user. In addition, any forest or grassland that is lost to make way for cultivation of feedstock oil, starch or sugar crops causes an enormous one-off release of carbon dioxide, and the ongoing production of artificially fertilised crops releases nitrous oxide, a GHG almost 300 times more potent than carbon dioxide. Add in the social cost of higher food prices, and the environmental impact of habitat loss, soil erosion and water depletion as intensive biofuel agriculture expands globally, and the arguments against continued political support for biofuels in the UK and EU appear to be overwhelming. Surely we should wait until better alternatives are available, perhaps back the most promising technologies with government funding, and in the mean time look at efficiency measures to curb our transport emissions.

This argument appears persuasive, and is partially based on facts. However, it misses four important points and therefore draws flawed conclusions.

First, we do not have the luxury of time implied by the EAC's 'wait and see' recommendation. Road transport fuels are produced from oil reserves that are being depleted at a rate in excess of new discovery [3]. Global transport demand continues to grow, driven by India and China, and oil scarcity is leading to increasing use of alternative sources of transport fuel such as tar sands, heavy oil, shale and coal-to-liquid processes. As well as being generally more expensive than fuel from conventional oil reserves, these sources are more environmentally damaging both in terms of the local impact of extraction and refining, and in terms of GHG emissions [4]. For example, the extraction of oil from tar sands requires large quantities of steam and the fuel thus produced causes at least 50% more GHG emissions compared with the extraction and use of conventional crude oil. Coal-to-liquid process technology is even less efficient, with almost a third of the coal's chemical energy lost as waste heat in the conversion process. Even the extraction and use of our remaining conventional oil reserves will, in the future, produce higher GHG emissions than today, owing to the smaller size and geographic inaccessibility of the remaining productive fields. This double-whammy of increased demand for more damaging fuels creates an imperative for action. A moratorium on EU biofuel targets as recommended by the EAC implicitly endorses these more polluting alternatives.

Well, is the answer to make us all drive smaller cars that use less oil? The second point missed by the EAC concerns the underlying economics of transport emissions growth. Efficiency is clearly desirable from a consumer's perspective as it lowers the cost of motoring, but will not abate the aggregate growth in transport fossil fuel use. Tata's Nano, unveiled in January as the world's cheapest car, claims an impressive average fuel consumption of 50 mpg [5] yet nobody suspects for a moment that this will reduce India's GHG emissions. Rather, at a price of just over £1000 and with low running costs the Nano is expected to create a transport revolution that will see car use in India soar. Lower price stimulates demand growth. Similarly, any improvement in average fuel economy in the UK or Europe as a whole is unlikely to slow the global rate of oil production and consumption, which it would need to do to have any impact on global emissions. Whether motivated by regulation, environmental concern or thrift, ongoing efforts to improve fuel economy in Europe will be offset by a corresponding increase in consumption elsewhere, until this new demand (stimulated by temporarily lower oil prices) takes up the slack. The only practical way to ensure fossil fuels are left in the ground is to create an abundance of cheaper alternatives. Larry Page, co-founder of Google and champion of Google's renewable energy initiative, recognises this need: "We want to produce one gigawatt of renewable energy capacity that is cheaper than coal. We are optimistic this can be done in years, not decades". Likewise, the goal of a transport biofuels policy must be to create a cheaper and more sustainable alternative to oil as soon as possible.