Greed for green gold

Brazilian liberation theologian and former Lula Government adviser Frei Betto has described agrofuels as «necrofuels». He justifies this drastic choice of term by citing the impacts of this accelerated cultivation on the poor. The boom has meant a threefold increase in the prices of some traditional food items in the space of a year. Frei Betto has the support of Jean Ziegler: «The production of biofuels could lead to hundreds of thousands of deaths from hunger worldwide», warned the UN Special Rappporteur on the Right to Food. According to Ziegler, the continuing sprawl of sugar plantations for ethanol production in northern and eastern Brazil is leaving less and less land for small farmers.

International water experts too sounded a warning at a conference in Stockholm in August. They pointed to the impending water shortage due to the expected mass production of ethanol and other «biofuels».

Investors pin hopes on «green gold»

The winners in Brazil's agrofuel boom are transnational agricultural and petroleum corporations as well as large landowners. By and large they control the sugar and ethanol industries. The business is being fuelled by investors such as Goldman Sachs and George Soros, which are rhapsodising over the «green gold». The European Investment Bank (EIB) plans to grant credits of over 37 million euros to EU companies keen to invest in Brazil's agrofuels market. «It is understood that [the big banks] UBS and CS too are getting into the new business», Switzerland's ambassador to Brazil wrote last year his report to Bern entitled «Perspektiven für brasilianisches Bio-Ethanol in der Schweiz» (Outlook for Brazilian bioethanol in Switzerland).

Damning OECD report

The «ethanol Alliance» between the USA and Brazil is generating even more dynamism. President Lula was already canvassing US investors for ethanol factories at the World Economic Forum in Davos in January. Lula wants to transform Brazil into «a Saudi Arabia of biofuel». For his part, Bush announced a law in January stipulating that in 10 years time all gasoline must have a 20 per cent ethanol content. As domestic production will be unable to meet this target, recourse will have to be had to output from other countries.

At the expanded G8 Summit at Heiligendamm, industrialised countries and heads of government from South Africa, Brazil, China, India and Mexico lauded «biofuels» as an antidote to the impending climate collapse. A series of current studies reveal just what a myth this is. A case in point is the OECD study published in September under the title «Biofuels: is the cure worse than the disease?». It draws the damning conclusion that the aim to substitute fossil fuels with agrofuels is leading to a shortage in the world's supply of food and feedstuffs, damaging the biodiversity and environment, is economically not very efficient, and has hardly contributed to any reduction in greenhouse gases . Already in May, the EMPA (a Research Institute of Swiss Federal Institute of Technology Zurich) had already concluded in a study for the Swiss Federal Office of Energy that «biofuels» per se are not environment-friendly. In particular, cultivation and processing of raw materials such as soybeans, maize (corn), rape seed or sugarcane sometimes placed serious burdens on the environment that were leading to a negative environmental assessment.

China has been the first country to react to the increased prices of foodstuffs (maize, cereals, rice). To preserve the social peace in the country, the government in June placed a temporary moratorium on bioethanol production. Lula in contrast is travelling the world over praising «biofuels» as an opportunity for all humanity, and is calling for the removal of import barriers.
Rosmarie Bär

Alliance Sud calls for social clause

On 1 January 2008 Switzerland will waive the mineral oil tax on several agrofuels in order to stimulate importation. Ethanol from sugarcane too is expected to benefit from the waiver, and this despite reports by the Swiss Ambassador to Brazil warning of the «slave-like conditions» and child labour often present in sugar production. This had prompted the Parliament during the review of law to demand that only those agrofuels produced under «socially acceptable conditions» should be tax-exempt.
In the draft of the corresponding implementing regulation, Federal Councillor Merz's Finance Department disregarded the request, with justification that it was currently not possible to list social criteria. Alliance Sud has protested against this disregard for the law and demanded that the regulation be revised to take account of the following:

• no tax exemption for agrofuels without setting social criteria.

• tax exemption only for agrofuels derived from food by-products or wastes and for which the overall environmental assessment is clearly positive.

• sugarcane and rape seed, whose cultivation has demonstrably very negative impacts on environment and food security, should not be tax-exempt.
• Contact: Rosmarie Bär, Alliance Sud