Biofuel trade disadvantages poor nations: report
A combination of rich nation import controls and excessive pricing power among too few western importers is disadvantaging biofuels producers in developing countries, a London based research institute said.
Biofuels are derived from food crops and can be used as alternatives to oil and coal for transport and heat. They are seen as an answer to the growing concerns of global warming and energy security.
Developing countries are the biggest producers of biofuels that are currently competitive with oil, because they have lower costs and their biofuels have a higher energy content than those produced in temperate zones.
But under present trade rules rich nations the biggest biofuels consumers are disadvantaging developing country producers, the report by the International Institute for Environment and Development (IIED) said.
U.S. tariffs, for example, bring the cost of Brazilian bioethanol up to that of the local product, it said, citing 2005 research.
"Trade barriers distort biofuel trade and jeopardise developing countries' potential to benefit from greater global demand for biofuels," said the report, which was published on Friday.
Rich countries are ramping up their biofuel production both to address energy security and greenhouse gas emissions concerns.
U.S. President George W. Bush on Tuesday called for Americans to cut their gasoline use by 20 percent over a decade, mostly through a nearly five fold increase in use of home grown fuels such as ethanol by 2017.
The European Commission said earlier this month biofuels should account for a minimum of 10 percent of fuel used by vehicles in the European Union by 2020.
Another risk for developing nation producers was the power a small elite of western companies has over supply chains and prices, the IIED said.
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