GoodFuels

International Views on Biofuels

I am just back from spending a week with 250 agricultural journalists from all over the world. The International Federation of Agricultural Journalists congress is an annual event that meets each year in a different country. This year we visited Austria and Slovenia - next year the congress will come to the United States and we will entertain the group in Fort Worth, Texas.

It is always interesting to get perspectives on agriculture from other countries. Biofuels production was a big topic of discussion and many people that I talked to were very interested in the progress being made in the US toward cellulosic ethanol. We visited a wood biomass plant in Austria, but their focus is using that for energy production, rather than liquid biofuels.

Of course, food versus fuel was a topic of discussion. The organizer and president of this year’s congress was former European Union agriculture commissioner Franz Fischler, who is a native Austrian. He calls the food versus fuel controversy “unfair.”

“They don’t differentiate between food price and agriculture price and the agriculture price is usually only a small component of the final food product,” Fischler told me during an interview about biofuels production in Austria.

Fischler says that second generation biofuels will be key in meeting long term renewable fuels goals for all countries, but it has to start with first generation ethanol from corn. “That’s why we have to start now,” he added.

Austria has ten biodiesel plants but so far only one ethanol plant. “It seems to me that biodiesel is the most difficult concept as far as sustainability is concerned,” Fischler said, mainly because soybeans and other oilseeds are less economical to grow in that region, compared to corn.

Listen to Fischler’s comments on biofuels here:

Phasing Out of Ethanol Incentives

Speaking in Kansas City this week, U.S. Secretary of Agriculture Ed Schafer told a group of business editors that ethanol incentives should be phased out gradually once production begins to approach 34 billion gallons per year, which is likely to be 13 to 14 years from now.

Schafer said ethanol producers need to prepare for an eventual end to subsidies. “Because they have been built in today, I think we can’t just shut them off,” Schafer said. “I think it’s important to say here’s the target, we are going to gradually reduce them so that you can adjust your operations to operate without them.”

Schafer used the word “subsidy,” which just has a negative connotation, unfortunately. But, of course, just about all industries - including oil - are subsidized in one form or another. The subsidies, in the case of ethanol, are the blenders tax credit and the tariff - which work together. The word “incentive” has a much more positive connotation compared to “subsidy” and is really more accurate since the idea is to provide incentives to get domestically produced ethanol into the marketplace with the tax credit, while keeping other countries from taking advantage of that credit by with imported ethanol.

However, it really just comes down to semantics - one man’s incentive is another man’s subsidy.

More from the campaign trail…

With less than 60 days until election day, the campaign for president is reaching a fever pitch.  And talk of energy features prominently in each candidate’s stump appearances.

As USA Today’s Paul Davidson and Barbara Hagenbaugh correctly point out, “To win the presidential race, it takes energy.” They detail the approach to the energy crisis this country faces of both candidates and give space to renewable fuels and ethanol near the end.

Over at Reuters, Chuck Abbott reports on the content of a conference call Senator Obama had with leaders of the National Farmers Union.  According to Abbott:

“I’ve long been a strong supporter of the RFS,” Obama said during a brief telephone call to members of the National Farmers Union. “I am strongly committed to advancing biofuels as a key component of reducing our dependence on foreign oil.”

Just a hunch, but I’m guessing we will here a lot more from the candidates about renewable fuels as this campaign heads into the home stretch.  Stay tuned!!!

Afternoon blog round-up

Here’s a look at what’s going on elsewhere in the ethanol blogosphere:

Corn Commentary has a look at why ethanol is an economic engine for small-town America.

Domestic Fuel reports on the grand opening of VeraSun’s newest plant in Dyersville, Iowa.

Wal-Mart has donated $369,000 to ethanol research. Full report over at Ethanol Business.

Finally, The Big Biofuels Blog talks about a recent article that points to Africa as the next big battleground for biofuels.

Be sure to visit our friends and join in the discussion!