International Policies on Bioenergy and Biofuels - Industrial Crops: Breeding for BioEnergy and Bioproducts - page 376

The expansion of biofuels and biofuel policies has sparked a lively debate and
controversy about the contribution of biofuels to various issues related to develop-
ments in agricultural markets. As shown in recent studies [ 1 , 10 - 14 ], biofuels may
have far-reaching side effects on agricultural markets due to price interdepen-
dencies between the energy, bioenergy, and agricultural markets. For example,
they may directly or indirectly increase food prices [ 10 , 13 , 15 - 17 ], cause negative
environmental impacts [ 14 , 18 ], or induce indirect land use changes [ 1 , 19 , 20 ].
The objectives of this chapter are to provide an overview of biofuel policies
implemented around the world and to discuss the implications of biofuels for
biofuel markets, food prices, and direct and indirect land use changes.
The rest of the chapter is organized as follows. In the next section, we provide a
short overview of global biofuel production and consumption. Then, we discuss
feedstocks for biofuel production. The key biofuel policies are overviewed in the
fifth section followed by the discussion of the market effects on these policies. The
last section provides some concluding remarks.
Biofuel Production and Consumption
Global biofuel (i.e., ethanol and biodiesel) production has experienced a rapid
growth over the last two decades; it reached 29 billion gallons in 2011, a 625 %
increase from the quantity produced in 1990 [ 3 ]. Global ethanol production first
started to increase significantly, relative to earlier years, in the period 1975-1978 as
a result of the implementation of the Brazilian ethanol mandate originating in the
PROALCOOL program in 1975 and the introduction of the U.S. blender's tax
credit in 1978 (Fig. 18.1 ). The second surge in the global ethanol production started
Fig. 18.1 Global biofuel production, 1960-2011 (Based on data from Ref. [ 3 ])