Biofuel goals may strain vegetable oil supplies

[Omaha Steve]

http://www.omaha.com/index.php?u_page=1208&u_sid=2357420

Published Sunday | April 1, 2007
Biofuel goals may strain vegetable oil supplies
BLOOMBERG NEWS


Global vegetable oil production is insufficient to meet the needs of the fuel and food industries, making European Union targets for biofuels use difficult to achieve, said Bunge Ltd., the world's biggest oilseed processor.

Supplies of soy, palm, sunflower and rape oils, the four main feedstocks for biodiesel, were 73 million tons in 2002. Demand from the food and biodiesel industries will have increased by about 41.2 million tons in the seven years through 2008, said Bernd Koelln, managing director of oilseeds and biodiesel for Bunge.

"This will require vegetable oil supplies to increase by 56 percent in seven years, which is impossible," Koelln said.

Demand for fuels made from such plants as corn, oilseeds and sugar is growing amid efforts by nations including the U.S. to reduce dependence on oil, gas and coal. Some governments also are trying to limit carbon emissions and assist farming.

The EU wants to cut emissions by a fifth, setting a mandatory target for biofuels to account for 10 percent of vehicle fuel by 2020.

The EU has limited additional land availability, with most of the region's set-aside acreage already in use or unsuitable for biofuels crops, Koelln said. Crop damage from unfavorable weather also would hurt the industry, he said.

"In years of bad crops, biofuels production will have to be cut in order to assume enough food and feed supply," Koelln said. "From a moral standpoint, food will always come first."

So called second-generation biofuels, made from biomass rather than edible crops, wouldn't be produced in sufficient quantities to meet the EU's consumption targets, Koelln said, adding that biomass-to-liquid, or BTL, fuel is too expensive to produce.

"I'm not optimistic that BTL will be a solution for second-generation biofuels," Koelln said.

[Hardrada]

1. We will naturally choose SUV's over margarine.

[BearSquirrel2]

2. It was good while it lasted ...

Yeah, it's good while it lasts, but there isn't enough used fry grease to go around ;-) Time to re-address the use of hemp.

[razzleberry]

3. the market will respond with palm oil

production of palm oil will expand