29/10/2007 (The Age) - A PROMINENT United Nations activist against famine has demanded a five-year moratorium on biofuels as a new report showed Australia could use its sugar to become a major global provider of ethanol.

The UN Special Rapporteur on the right to food, Jean Ziegler, said it was a "crime against humanity" to convert food crops to fuel, driving up food prices when there are 854 million hungry people in the world.

Dr Ziegler said a child under 10 dies from hunger or disease related to malnutrition every five seconds.

A study by global consulting group Accenture found Australia could become a big ethanol producer if all our sugar exports were converted to biofuel.

The report compared six big sugar cane-producing countries — Australia, Thailand, Guatemala, South Africa, Colombia and Argentina — in 2005 and found that Australia had the biggest volume of exports.

Thus, Australia had the highest level of potential ethanol production — more than 3000 million litres of ethanol, Accenture said.

However, Australia was falling behind most of the big players in the global ethanol market in terms of industry maturity and production. The leaders are Brazil, the United States, China, Spain, Poland, France, Sweden and Ukraine.

Australia was also being disadvantaged by only operating in the domestic biofuels market, the study said.

Sugar won out as the best feedstock for ethanol against all comers. Criteria included production costs, fossil energy balance, land availability and the size of the global feedstock market.

For biodiesel, results were mixed, based on feedstocks such as soybeans, rapeseed, jatropha, coconut oil and palm oil.

"Soy-based biodiesel and jatropha are becoming increasingly important as sustainability issues challenge the future of palm oil," the report said.

The study, which compared 20 countries, said several factors would influence the success of the biofuels market.

These included the emergence of second-generation technologies, the development of the hybrid automobile market, and what key energy-consuming nations such as China, India and Japan do.

Other factors were companies' ability to gain feedstock, and lower transport and production costs; pressure from governments to achieve energy security; policies favouring agriculture in almost all countries; and regulations encouraging biofuel use to reduce carbon dioxide emissions. "We believe that biofuels will experience a cycle similar to that of the internet during the dot-com bubble," said Melissa Stark, a senior executive in Accenture's Energy industry group.

"Initially there will be a boom followed by a downturn as the realities of practically scaling this market become more apparent."

The study found that incentives would encourage new entrants to the marketplace.