The EU says we need them, some experts say they damage the planet. Who is right?

26/01/2008 (Guardian Unlimited) - From the top of the Greenergy refinery in Immingham you can see across the Humber estuary to Hull. A hum of equipment fills the air, along with a curious smell. Popcorn.

Greenergy processes vegetable oil. It takes the gloopy juice squeezed from inside rape seeds harvested on surrounding Lincolnshire fields, strips out the waste and chemically tweaks the leftovers to make it easier to burn. Greenergy pipes almost 100,000 tonnes a year of its veggie option to ConocoPhillips and Texaco, just across the road, which mix it with their diesel fuel.

Until recently, the operation was viewed as a good thing. Because the oilseed rape plants absorb carbon dioxide, the company says the carbon emissions of the mixed fuel are lower, which helps the fight against global warming. And because oil companies that supply the blend pay less tax, everybody wins. Greenergy is expanding and similar facilities are going up elsewhere.

But now a chill wind is blowing through this emerging industry. Fuels from vegetable oil, sugar, corn and a number of other crops and plants, collectively known as biofuels, are taking flak. There are doubts about their carbon savings, and concern over their impact on food supplies, prices and the land needed to grow them. This week, a parliamentary committee called for a moratorium on efforts to increase their use. Yet on Wednesday, the EU confirmed it will force oil companies to mix biofuel into petrol and diesel, while separate UK action on climate change will make all suppliers use biofuels by April.

It is a confusing situation, which provoked New Scientist to call on the UN's Intergovernmental Panel on Climate Change to "determine whether biofuels are good or bad". The issue splits even the green campaigners: Friends of the Earth said this week's European move was a disaster; WWF welcomed it.

Challenge
Jeremy Tomkinson, head of the National Non-Food Crops Centre in York, which promotes biofuels, says the New Scientist question misses the point. "We need people to understand not all biofuels are the same," he says. "You can't say whether all biofuels are good or bad. The challenge is to use more of the good ones and less of the others."

The Greenergy refinery illustrates the point. At the moment, the plant is running on British rape seed oil, but later in the year it will include oils from US soya beans. In the summer, it could blend palm oil from the tropics into the mix. Sometimes it uses waste cooking oil.

Like others in the oil industry, biofuel companies source their feedstocks from suppliers across the world, depending on price and availability. Greenergy has a similar biofuel facility in Rotterdam, using rape from France and Germany.

The company is also involved in ethanol, which it mixes into petrol. Most ethanol from plants comes from fermented sugar cane in Brazil, but batches can also come from sugar beet, wheat and corn, grown in different ways across different countries. Andrew Owens, managing director of Greenergy, says it takes the environmental impact into account. The company has blacklisted some suppliers, and will not buy bioethanol from the US, because of the amounts of nitrogen fertiliser required to grow the crops.

Its website says the carbon savings of bioethanol produced in the northern hemisphere, such as from another British biofuel facility owned by British Sugar in Norfolk, are "questionable". Greenergy has lined up a sugar cane-based bioethanol supplier in Africa, to combat rising demand for the Brazilian version, which is generally agreed to be the greenest biofuel around.

On biodiesel, it points out that tropical fuels such as palm oil produce less carbon-intensive fuels, because they require less greenhouse gas-fuelled effort to grow, and claims associated problems such as deforestation to start plantations are "managerial rather than intrinsic".

Owens says it tries to buy from companies which have joined the Round Table on Sustainable Palm Oil, an industry body that is working to green the supply chain, and inspect non-members. "I can trace our supplies through to specific farmers and plantations. I believe we're driving up standards across the board."

Owens argues that the food industry, which still takes the vast majority of palm oil, has caused more damage in countries such as Indonesia but escaped the level of criticism aimed at green fuels.

Demand
Tomkinson says the new mood against biofuels could even make the situation worse. European investors have lost their nerve, he says, and are planning to build fewer refineries. To meet increased demand for biodiesel, oil companies would have to look elsewhere. Under the UK and European regulations, Britain alone will need about 2m tonnes of biofuel by 2010. Current production is about 300,000 tonnes. (Though UK use of palm oil as biofuel is limited by our colder climate, which makes it waxy and unsuitable for engines).

It is this expansion of biofuel use that most worries opponents and critics. Even if companies such as Greenergy manage to make their products sustainable and climate-friendly - and campaigners point out that some palm oil companies registered with the Round Table have still been linked with illegal logging - how could such checks be maintained on a huge scale?

Besides deforestation, campaigners say wider biofuel cultivation could cause water shortages and increase pollution, and that converting land could release more carbon emissions than the fuels save. Scientists have questioned whether there is enough suitable land to grow sufficient crops.

There are also uncertainties over the life cycle analyses used to work out the overall carbon saving of different biofuels. Paul Crutzen, the Nobel prize-winning physicist, recently suggested that more nitrogen compounds, potent greenhouse gases, could escape into the atmosphere from fertiliser than officially counted. Some say, per tonne of carbon saved, biofuels are simply not cost-effective.

The parliamentary environmental audit committee concluded on Monday that the possible risks outweighed the benefits and that UK and European targets on biofuel use should be scrapped until their environmental advantages can be guaranteed. Tim Yeo, chair of the committee, said: "The government must ensure its biofuels policy balances greenhouse gas emission cuts with wider environmental benefits."

Andris Piebalgs, the EU energy commissioner, strongly disagreed and said the only realistic alternative was oil, which he described as "a shrinking source of energy with serious environmental concerns in regions where it is produced, that generates large amounts of carbon dioxide not only when it is burned, but also when it is extracted, transported and refined".

The UK government, this week handed down a stiff EU target to produce 15% of all its energy from renewable sources by 2020, was also in no mood to abandon its biofuel targets, which it reckons can save a million tons of carbon pollution by 2010.

Both the UK and EU say they will apply strict sustainability criteria to the new fuels, and demand audited carbon savings. Britain has created the Renewable Fuels Agency and plans to publish the results for each supplier. By 2010, it says the process will be able to link tax benefits received by the oil giants to how green their biofuels are.

The Royal Society, in a study that was more supportive of biofuels than was reported, recently gave cautious backing to the sustainability criteria, though it pointed out they were riddled with uncertainties. Friends of the Earth said the government had given people no easy way to distinguish good biofuels from bad, and that indirect effects, such as people being displaced from land seized to grow crops, were not assessed.

Andrew Owens of Greenergy says: "We are trying to introduce unprecedented standards. We're the good guys here."