Energy & Food Security: - PDF Free Download

IAEA 12 th Scientific Forum Energy for Development Vienna International Centre, Vienna September 15-16, 16, 29 Energy & Food Security: Faris Hasan Director of Corporate Planning OPEC Fund for International Development 1

A A doubling of food prices over the past three years could potentially push 1 million people in low income countries deeper into poverty president of the World Bank, April 28 More than half of the increase in in use of both coarse grain and vegetable oil was due to higher use in the biofuels industry OECD 28 rising food prices 2

Outline Biofuels and Food Security: Implications of an accelerated biofuels production An OFID study prepared by IIASA (International Institute for Applied Systems Analysis) Methodology Key Findings Social, Economic, Environmental 3

Biofuels today Mitigate Climate Change Enhance Energy Security Foster Rural Development Fuel ethanol production 1975-27 Biodiesel production1992-27 7 15 6 12 5 billion litres/year 4 3 Others China EU USA Brazil billion litres/year 9 6 Others Australia Brazil USA Europe 2 3 1 1975 1978 1981 1984 1987 199 1993 1996 1999 22 25 28 1992 1995 1998 21 24 27 Source: F.O. Licht World Ethanol & Biofuels Report, October 27 and May 28. 4

Biofuels Mandates and Targets Country/ Region Mandatory, voluntary or indicative target Australia At least 35 million liters biofuels by 21 Canada European Union 5 percent renewable content in gasoline by 21 5.75 percent by 21 1 percent by 22 Germany 6.25 percent by 21 1 percent by 22 France 7 percent by 21, 1 percent by 215, 1 percent by 22 Japan.6 percent of auto fuel by 21; a goal to reduce fossil oil dependence of transport sector from 98% to 8% by 23 New Zealand United States 3.4 percent target for both gasoline and diesel by 212 12 billion gallons by 21, rising to 2.5 billion gallons by 215 and to 36 billion gallons by 222 (with 16 billion gallons from advanced cellulosic ethanol) Country/ Region Brazil Mandatory, voluntary or indicative target Mandatory 25 percent ethanol blend with gasoline; 5 percent biodiesel blend by 21. China 2 million tons ethanol by 21 increasing to 1 million tons by 22;.2 million tons biodiesel by 21 increasing to 2 million tons by 22. India 5 percent ethanol blending in gasoline in 28, 1 percent as of 29; indicative target of 2 percent ethanol blending in gasoline and 2 percent biodiesel blending by 217. Indonesia 2 percent biofuels in energy mix by 21, 3 percent by 215, and 5 percent by 22. Thailand 2 percent biodiesel blend by 28, 1 percent biodiesel blend by 212; 1 percent ethanol blend by 212. South Africa 2 percent of biofuels by 213 5

Two key Scenarios Scenario TAR-V1 Biofuels targets implemented by 22 Transport fuel as projected by IEA/WEO 28 Gradual deployment of Second-generation (>215) Scenario TAR-V3 Same as TAR-V1, except: Accelerated development of second-generation conversion technologies 6

Biofuel Feedstocks First-generation Oil crops Rapeseed; Sunflower; Soybean; Oilpalm; Jatropha Sugar crops Sugarcane; Sugar beet; Sweet sorghum Starch crops Wheat; Rye; Triticale; Maize; Sorghum; Cassava Second-generation Herbaceous ligno-cellulosic plants Miscanthus; Switchgrass; Reed canary grass Woody ligno-cellulosic plants 7 Poplar; Willow; Eucalyptus

OFID study commissioned to IIASA Climate Change Biofuels Targets + IEA / WEO Agro Ecological Zone Methodology IIASA World Food System Model FAO/IIASA model World-wide coverage Peer-reviewed Used for IPCC,WSSD, etc. Food Security Price & Supply Rural Development Others: competition for arable land, deforestation, etc. Energy Security 8

AgroEcological-SocioEconomic Assessment 3 2 Climate model 1 Development scenario Climate impact response relations Production Trade Demand 4 Global Food, Feed, Biofuels System World Market 5 6 9

Suitability for rain-fed sugarcane production, high input level Undefined SI > 75 : Very high SI > 63 : High SI > 5 : Good SI > 35 : Medium SI > 2 : Moderate SI > 1 : Marginal SI > : Very marginal Not suitable Water Potential VS and S Land Current Land 65 Mill ha Forests 159 Mill ha Grasslands 74 Mill ha Current Sugarcane Land 22 mill ha( Brazil + India 5%) 1

Suitability for rain-fed jatropha production ~-- - ':.1.'... D D D Ḏ -Ḏ Undefined SI > 75 : Very high SI > 63: High SI > 5: Good SI > 35 : Medium SI > 2 : Moderate SI > 1 : Marginal SI > : Very marginal Not su~able Water -.. '. Potential VS and S Land Mill ha Jatropha Developed Developing Current Land 17 286 Forests 28 36 Grasslands 6 273 Current Land - 1.5 11

Global Land Suitability for 1 st and 2 nd Gen. Biofuels First Generation o Undefined _ 51::- 75: Very high 51::-63: High 51»5: Good o 51::- 35 : Medium c:::j 51» 2 : Moderate _ 51 ::-1: Marginal _ 51» : Very marginal o Nolsuitable _Water... o Undefined _ 51::- 75 : Very high 51::- 63: High D 51::-5: Good D 51::- 35: Medium 51» 2 : Moderate _ 51» 1: Marginal _ 51» : Very marginal D Nolsuitable _Water Second Generation 12

Net greenhouse gas savings achieved in selected scenarios Note: computations for first-generation biofuels are based on greenhouse gas saving coefficients in Commission of the European Communities (28) & IPCC Tier 1 approach for carbon losses due to land usechanges (IPCC, 26). For 13 second-generation biofuels a greenhouse gas saving of 85 percent was used.

Agricultural prices Impact of first-generation biofuels on agricultural prices in 22 Price changes compared to reference scenario Price changes compared to Referece (percent) 4 35 3 25 2 15 1 5-5 Cereals Other crops Livestock Price changes compared to Referece (percent) 6 5 4 3 2 1-1 -2-3 -4-5 Wheat Rice Coarse grains Protein feed Other food Non-food 14

Impact on agricultural value added Change relative to reference scenario In 22 In 23 9% 9% Change in agricultural value added (percent) 8% 7% 6% 5% 4% 3% 2% 1% % W EO-V1 W EO-V2 TAR-V1 TAR-V3 Change in agricultural value added (percent) 8% 7% 6% 5% 4% 3% 2% 1% % W EO-V1 W EO-V2 TAR-V1 TAR-V3 Developed Developing 18

Cereal production Change in cereal production relative to baseline REF-1, in 22 In 22 In 23 Change in cereal production in 22 (million tons) 25 2 15 1 5 Change in cereal production in 23 (million tons) 25 2 15 1 5 Developing Developed 2

Where do the cereals needed for biofuel production come from? In 22 Reduced Feed Use 24% 66% 1% Increased Production Reduced Food Use 23

Food and feed consumption Change of cereal food and feed consumption relative to baseline REF-1, in 22 Food Feed Change in cereal food use in 22 (million tons) -5-1 -15-2 -25-3 Change in cereal feed use in 22 (million tons) -1-2 -3-4 -5-6 -7 Developed Developing 24

Additional number of people at risk of hunger in 22 Additional people at risk of hunger (millions) 15 12 9 6 3 Relative to the reference scenario Rest of World M. East & N. Africa Latin America Asia, South Asia, East Africa 27

Deforestation Additional forest conversion (Mha( Mha) Additional forest conversion (million hectare) 2 22 18 23 16 14 12 1 8 6 4 2 28

The study in a nutshell Upwards Pressure on World Food Prices: + 3 to 5% A Factor in Rising Hunger: + 14 million people Absorbing Cereal Production: + 26 million tons Benefits for Rural Development: + 3% to 8% GDPA Mitigating Climate Change: 12.4 Gt CO2e; 5 years Competition for Arable Land: + 3 to 45 million ha Fueling Deforestation: + 15 to 18 million ha The Fertilizer Dilemma: + 1 million tons A Threat to Biodiversity risks & opportunities 6 to 12 % in Transport Fuel Energy security? Imperative for a transition from 1st to 2nd Generation Biofuels 29

The full OFID study prepared by IIASA is available upon request info@ofid.org A summary is available on: www.ofid.org www. iiasa.ac.at 3