The pluses and minuses of using biofuel in Ukraine
The dispute over agricultural crops as an alternative source of energy or farming produce may well turn into a global problem. This became clear during the discussion of the World Bank’s report on global agricultural development. The report forecasts a wide-scale transformation of the biofuel market. The bank’s experts believe that the increased use of biofuel will open up huge agricultural markets.
According to the World Bank, the expansion of this market is a positive phenomenon because it will allow developing and poor countries to establish their own niche in the world economy. The report’s main author, Derek Byerlee, also recommends that Ukraine boost crops and the production of biofuels for the European Union: “In the short term, grain prices will be very high, owing to the production of biodiesel, which is an opportunity for many countries, including Ukraine, to capture these markets.”
However, Academician Valerii Heiets, director of the Ukrainian Institute of Economics and Forecasting, has his own view of these prospects: “Europe has set itself a goal that also affects us one way or another: biodiesel should account for 20 percent in the fuel usage structure. European scientists claim that if Ukraine implements the right policy, it will be able to meet 50 to 75 percent of Europe’s biodiesel requirements. In their view, Ukraine is capable of doing this, as the results of a serious economic study have shown.”
According to Heiets, Ukraine will begin the mass conversion of agricultural land dedicated to rapeseed. This in turn will change the structure of arable lands, lead to their excessively intensive use, and hinder rational land management. “But the main thing is that this policy will radically change the farming produce price ratio. In Europe, they want to sow [rapeseed] only on land without an agricultural designation. What about our country? Experts forecast that this dispute between bioenergy and food products will become a worldwide problem,” Heiets says.
World Bank economists express similar fears. The report’s co-author Iryna Kliuchnykova says that the production of biofuel as an alternative source of renewable energy can lay the groundwork for huge new agricultural markets. But she also points out human risks.
“For example, in some cases there is a clear relationship between the increase in land dedicated to ‘biofuel crops’ and food prices. This relationship is observable in the US, where the price of corn used for producing ethanol has risen considerably.” But this expert believes it is too early to make any final conclusions “because we do not know the impact of drought and other natural disasters on price increases.” Kliuchnykova has also determined that 240 kg of corn, which is needed to produce a mere 100 liters of ethanol, is enough to feed one person for an entire year.
World Bank experts point out that special “energy” crops might be used in the future to produce alternative fuels, which will somewhat mitigate this shocking statistic. But second-generation technologies in this sector “are still not commercially viable,” says Derek Byerlee, the main author of the World Development Report.
