Australian Contribution to the High Level Panel of Experts for Food Security and Nutrition
(HLPE) report on Biofuels and food security
Overall comments
The draft HLPE report on ‘Biofuels and Food Security’ provides a useful overview and
highlights well the range of key issues relating to biofuels and their implications for food
security. It reads as a good summation of the state of play across countries and the
scientific/economic perspectives currently influencing the biofuel agendas including
research. It is largely a factual exposition which effectively illustrates the conflicting
interactions between biofuels and food security in a world of finite land and energy
resources.
The draft policy recommendations acknowledge the potential distortions that mandates,
subsidies and tariffs can have on the market for biofuels. The report correctly reflects that
the Australian Government has not introduced a national mandate, and that New South
Wales is the only state to have one.
However, Australia considers that the analysis of the concept of food security in the draft
paper is limited and as a result the recommendations are also limited. For example, the
paper analyses food security arising from policy-based biofuels markets in terms of the FAO
framework for assessing the determinants of food security – (i) access (i.e. food
expenditure/income); (ii) availability (resources available for food production – mostly land
and water); (iii) stability (access and availability guaranteed through time); and (iv)
utilization (access to resources which enable food to be appropriated). However, the report
does not analyse biofuels policy-induced food insecurity in the context of other factors
impacting on food security, such as restrictive trade regimes, inappropriate price or output
regulation, stockpile policies, dietary preferences, insecure land tenure, taxes on food
production etc. Such an analysis is required to determine the significance of biofuels policyinduced food insecurity in relation to these other factors influencing food insecurity.
Biofuel promotion also has economy-wide impacts aside from its direct impact on food
production and price. For example, replacing some of the liquid petroleum fuel market with
biofuels leaves a larger amount of the hydrocarbon market available for the production of
agricultural fertilizers, with consequent impacts on price and supply of the inputs to food
production. It would be useful to look at the economy-wide impacts of subsidies to biofuels
to understand these effects.
A biofuels mandate may be a good policy for quickly developing a biofuels market. However,
unless biofuels are able to compete in the fuels market in the medium to long-term absent
the mandate, it is generally not good policy in the longer term.
Research related comments
The Australian government submits the following general research related matters for the
HLPE’s consideration:

The interplay and synergies between energy security and food security are becoming
more significant than ever though the impacts will vary across countries, with many
food productivity advances being more energy intensive in nature particularly in
developed countries but also in a range of developing countries.

There is and will be a need for ongoing scientific research into biofuels to realise the
latent efficiency potential of second and third generation biofuels in developing
countries. In this case however, there seems to be large amounts of good research
across countries without coordination and therefore considerable duplication of
effort, including in developing countries that can ill afford the expenditures.
Knowledge transfer mechanisms require increased attention to rectify this defect;
with developed countries have a comparative advantage in most cases. It seems that
a number of developing countries are engaging in R&D when other countries already
have the basic know how which could be adapted in many cases with less expense.
The use of jatropha is a case which is mentioned in this draft paper where countries
have engaged in the research and production without real access to the scientific
and economic information that should be readily available from public sector
agencies in other countries; recognising that private sector researchers are
understandably more restrictive with information for commercial reasons.

While the information gaps are reducing with time, there is still a sense that biofuels
are a panacea in some poorer countries where the costs of fossil fuels are
increasingly prohibitive. This can lead to false expectations and misuse of resources
driven partly by a lack of precise economic data and true reflections on the real
opportunity costs of biofuels at country levels. There are very few if any genuine
examples of biofuels which do not have an opportunity cost in terms of alternative
land and water use for food crops. The exception is where by-products from
food/feed crops can be utilised for biofuels or where biofuel crops are natural break
crops, thereby reducing the marginal production costs and enabling producers
including small holders to diversify the farm enterprise mix which is a basic income
and risk management objective in many developing countries.

It should be made clearer that the economics of biofuel cropping are volatile and
short term horizons are less likely to have success. The variable costs and
availabilities of fossil fuels have direct impacts on the viability of biofuels not only
because of the comparative prices but also the fact that many biofuels require
traditional energy sources at the processing stages which impacts on total
production costs.

The distortionary policy settings with subsidies and trade restraints in biofuel sectors
of many developed countries is addressed in this paper, but we believe this should
be emphasised further, given the negative impacts on food affordability in poorer
countries over time.
We also submit the following specific comments:

Appendix 1, page 65, the entry in the table for Australia requires amendment. The
column headed Mandate-Tools has the entry N/A, presumably meaning Not
Applicable and it relates to mandates listed in Columns two and three. The
Australian Government policy provides Ethanol Production Grants for producers of
fuel ethanol to stimulate domestic production. As well, it administers the Energy
Grants (Cleaner Fuels) Scheme, which aims to provide grants for the manufacture or
importation of biodiesel and renewable diesel, among other fuels, to offset any
excise or customs duty and give a market advantage to these cleaner fuels. These
grants apply throughout Australia and are not restricted to New South Wales. We
suggest adding a separate column to capture such policies.

The paper is inconsistent in its usage of metric and customary units of measurement
(litres vs. gallons). There should be a single measurement system used throughout
the reports, or alternatively dual reporting of figures presented in the paper.
o For example, “x billion litres (x billion gallons)”

The paper struggles to scale increases in demand for biofuels with rises in global
food prices. This connection needs to be more clearly made to support positional
statements in the report claiming the predominance of biofuels in food price
increases.
Specific comments on the recommendations of the paper
Australia makes the following comments on the following recommendations of the report:
Recommendation One
Australia’s comments:
Australia recognises that global demand for biofuels is one of the many factors that may
affect food security and food prices.
The government believes that inflexible mandates for biofuels are polices contrary to
creating an open trading market. We would caution against major market intervention or
regulation noting the potential for market distortion.
The Australian biofuels industry does not impact significantly on food prices in Australia due
to the small scale of the industry and because of the emphasis on advanced biofuels which
are derived from low cost, non-food crops, algae and agricultural wastes and would assist in
mitigating competition between food and fuel.
Even if there was a substantial increase in demand for biofuels necessitating their
production from traditional food crops, such as grains and sugar, it is unlikely to significantly
affect food prices domestically as these commodities trade in global markets.
Recommendation Two
Australia’s comments: The Australian Government has a policy interest in land use changes
and recognises that this is a significant policy issue that requires careful consideration. The
Australian Government employs a whole-of-government approach by working closely with
states and territories on land use planning.
In terms of foreign direct investment, Australia has well-established arrangements and
regulatory frameworks to protect landholders, investors and communities.
Recommendation Three
Australia’s comments:
The recommendation is not clear as to whether it is referring to integrated land and water
management, or the treatment of land and water as a single inseparable property right. The
latter would be in conflict with Australia’s current water reform agenda under the National
Water initiative, which guides the separation of land and water rights to allow water to be
allocated to its highest value use. We propose inserting the word “management” after the
phrase “land and water”.
Recommendation Four
Australia’s comments: The Australian Government agrees with this recommendation.
Recommendation Five
Australia’s comments: Australia questions the suggestion of a precondition to adhere to
the broadly-owned RAI principles. See recommendation two comments regarding
investment in Australia. Investment–whether foreign or domestic–in the agricultural sector
can bring significant benefits and opportunities for farmers. The Australian Government
does not support an approach that would impose blanket bans or restrictions on foreign
investment.
Recommendation Six
Australia’s comments: Australia is participating in the development of an International
Standards Organisation (ISO) Standard for Sustainability Criteria for Bioenergy which covers
the economic, environmental and social aspects of sustainability. The ISO standards involve
some 30 countries of which many are from developing nations and experience many of the
issues identified in the report. The ISO standard seeks to address these issues whilst still
allowing for the development of a biofuels industry in a sustainable manner.
Recommendation Seven
Australia’s comments: The Australian government is targeting investment in advanced
biofuels which have the potential to build a sustainable new industry that could increase
national fuel security, assist in reducing greenhouse gas emissions and stimulate regional
development.
We are also working with the Biofuels Association of Australia and the ISO to develop
internationally agreed sustainability criteria that can be applied to industry to ensure that
support for biofuels does not compromise sustainable production practices and will provide
greater impetus for move towards advanced biofuels. Voluntary certification schemes can
be a useful mechanism for producers to demonstrate their environmental credentials to
concerned consumers.
Most Australian exporters subscribe to either the International Sustainability and Carbon
Certification Scheme (ISCC) or the Biomass Biofuel Sustainability Voluntary Scheme (2BSVS),
which are formally recognised by the European Commission, to supply certified canola to
the EU. However, exporters regard the cost of these schemes as an expensive and
unnecessary impost, believing that the certification requirements should only be applied to
countries with unsustainable production systems.
Recommendation Eight
Australia’s comments: Australia agrees that developing a biofuel’s policy based on the
typologies of a country is beneficial. In December 2011, the Australian Government released
the Strategic Framework for Alternative Transport Fuels. The Framework establishes a long
term approach to a market led adoption of alternative transport fuels in Australia in the
context of maintaining Australia’s transport fuel security while moving towards a lower
carbon economy by 2030.
In regards to identifying trade-offs, the need for recommendation does not currently apply
to Australia because, as previous mentioned, we believe our biofuel policies do not
contribute to global food security concerns or have any significant impact of food prices
because of the small scale of the Australian industry and because most Australian biofuel
production is derived from waste products.
Recommendation Nine
Australia’s comments: The recommendation assumes the options are between using food
crops or non-food crops for biofuel (ignoring for the moment the merits, or otherwise, of
biofuel mandates etc). However, there is some research, including in Australia, into the
viability of using residues from crops grown for other purposes as the feedstock for
biofuels. This, ostensibly at least, solves the problem of displacing other land uses and
should be addressed in the report.
Recommendation Ten
Australia’s comments: The Australia government is targeting investment in advanced
biofuels which have the potential to build a significant and sustainable new industry that
could increase national fuel security, assist in reducing greenhouse gas emissions and
stimulate regional development. Therefore the recommendation to prioritise the
development of non-biomass renewable fuels cannot be supported as Australia invests in
the research, development, demonstration, deployment and commercialisation of various
renewable energy and related technology innovations.
Recommendation Eleven
Australia’s comments: Australia agrees with this recommendation.
Structure of the report
Some of the recommendations/conclusions at the beginning of the draft report do not seem
to be fully reflected in the report itself. In particular, the paragraphs/recommendations
referring to national mandatory biofuel targets and subsidies that impact negatively on food
prices: it would be helpful to show more clearly in the report the basis of the policy
recommendations that have been reached. We would also like to suggest that the
proposed recommendations/conclusions come at the end of each of the chapters of the
report rather than at the beginning of the report.
Concluding comments
The Australian Government thanks the HLPE for developing a zero draft of the ‘Biofuels and
Food Security’ report and is happy to engage with the HLPE to provide comment on future
drafts.