Biofuel subsidies not cost-effective for cutting carbon emissions

News Article - 28 August 2008
Category: Industry

Using biofuel subsidies as a way of cutting carbon emissions is not cost-effective, according to a new study.

The report on biofuels and deforestation from the Policy Exchange think tank found that halting deforestation and peatland destruction should play a larger role in government strategy, reports BusinessGreen.com.

It was argued in the report that the government's target of using biofuels for five per cent of all transport fuel by 2010 will cost the Treasury £550 million and will only reduce carbon dioxide (CO2) emissions by around three million tonnes, equivalent to one tenth the output of a coal power station.

However, the report found that investing the same amount to stop deforestation and peatland destruction would reduce CO2 emissions by 200 million tonnes a year.

"The debate over cost keeps getting forgotten, but government should remember that the goal is to prevent climate change and we need to ask what is the cheapest way of doing that," the report's editor, Ben Caldecott, told the website.

"In that light, it is clear first generation biofuels are far too expensive."

He also supported claims that biofuel subsidies lead to increased deforestation, as forests are cleared to make room for energy crops.

---

More industry news

• Banks defend lack of lending with new taskforce
• Fallout begins from public spending cuts
• Only 4% of staff would approach manager with health concerns
• CFOs in dark about carbon management spend
• UK car production falls
• New CRC standards will benefit top performers
• Employee engagement at ‘all time low’
• Finance leaders back green reporting standards push
• UK worker productivity linked to performance bonuses

Back to news home page »