Only 7 percent of global crops is used for biofuels production

January 23, 2022 |

In Germany, UFOP reports that in 2020, 1.4 milliards ha of crops such as grain, oilseeds, protein, sugar and fibre plants, fruits, vegetables, nuts and others were grown worldwide. Most of this produce is used as food. Only around 7 percent go into biofuels production.

Biofuel production is mostly located in countries where there is already a surplus of feedstock (especially maize, soy and palm oil) and legally prescribed blending obligations. If the surplus were not used to produce biofuels, it would have to be placed on the global market, where it would weigh heavily on feedstock prices. The use in biofuel production reduces the production overhang, generates extra value added and reduces the need for foreign currency for imports of crude or fossil fuels. This is primarily a problem in poorer countries.

Another advantage is the amount of high-quality protein feed that is generated in biofuel production, demand for which is steadily increasing. The amount and quality of these protein feeds have a strong influence on feedstock prices. Consequently, they also determine the amount of land dedicated to growing the feedstocks. In other words, biofuels are by no means the price drivers in the commodities markets. If necessary, the feedstocks grown for biofuel production are primarily available for food supply. In the case of politically motivated extensification, the EU Commission is currently pursuing with its reduction strategy for fertilizers and plant protection products as part of the “Green Deal”, this option for “buffering” food demand would be omitted.

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Category: Fuels

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