Telegraph | July 12, 2008
By Christopher Booker and Richard North

Rarely in political history can there have been such a rapid and dramatic reversal of a received wisdom as we have seen in the past 18 months over biofuels – the cropping of living plants, such as soya beans, wheat and sugar cane, to generate energy.

Two years ago biofuels were still being hailed as a dream solution to what was seen as one of the most urgent problems confronting mankind – our dependence on fossil fuels, which are not only finite but seemed to be threatening the world with the catastrophe of global warming. 

In March 2007 the leaders of the European Union, in a package of measures designed to lead the world in the "fight against climate change", committed us by 2020 to deriving 10 per cent of all transport fuel from "renewables", above all biofuels, which theoretically gave off no more carbon dioxide than was absorbed in their growing.

Since then, however, the biofuels dream has been disintegrating with the speed of a collapsing card house. Environmentalists, formerly keen on this "green energy", expressed horror at the havoc it was inflicting on the world's eco-systems, not least the clearing of rainforests to grow fuel crops. 

As the world suddenly faced its worst food shortage for decades, sending prices spiralling, experts pointed out that a major cause had been diverting millions of acres of farmland from food production to fuel. The damage this was inflicting on the world's poor led a United Nations official to describe the rush for biofuels as "a crime against humanity".

As damaging as anything to the belief that biofuels could help save the planet from global warming have been various studies showing that producing biofuels can give off more carbon dioxide than they save. So devastating has been this backlash that even the British Government, which prides itself on being the greenest of the green, commissioned a review, published last Monday, urging a slowdown in the move to biofuels. When this recommendation was endorsed by senior ministers, this put the UK directly at odds with a European Union policy to which it had already signed up. But the EU is firmly holding its line, saying it has no intention of lowering its target. 

How did we come to such a pass? The story of mankind's love affair with biofuels goes back much further than most people realise, and has unfolded through five stages. Stage One of the story dates back to the dawn of modern transport and the invention of the internal combustion engine. When Rudolf Diesel invented the engine that bears his name, he designed it to run on peanut oil. When Henry Ford designed the first mass-produced car, the Model T, he intended it to run on ethanol derived from two of America's most abundant crops, corn (maize) and hemp. 

But in the 1920s the burgeoning petroleum industry managed to squeeze out this competitor so effectively that the first stage in the biofuels story was over. Stage Two began in the 1970s, when a fourfold rise in oil prices and fears that reserves might be running out prompted a renewal of interest in biofuels – particularly among the new environmentalist groups, who saw them as "sustainable" energy. In 1981 this was taken up by the UN, at a conference on Renewable Sources of Energy, leading to a report in 1987 which prompted the UN to adopt a Programme on Sustainable Development, with biofuels playing a large part.

Stage Three began in 1992, when two developments coincided to move biofuels even higher up the political agenda. First, following a further oil price hike after the first Gulf War, Washington and Brussels believed that biofuels could be a way of using their then-massive crop surpluses to wean the United States and the EU off dependence on imported oil. The other came at the UN’s Earth Summit in Rio de Janeiro, when 100 world leaders and 20,000 environmentalists gathered to discuss mankind’s response to new environmental challenges, notably "global warming". 

It was at this moment that the cause of biofuels, long championed by the UN for other reasons, became part of the "climate change" agenda. Over the next 10 years, the cause was driven by these two quite separate concerns. On the one hand, particularly in the US, a powerful lobby grew up among farmers who were encouraged by their governments to see biofuels as a lucrative source of income (in the US alone, annual biofuel production now tops nine billion gallons).

On the other, led by the UN, the world was encouraged to see biofuels as key to the fight against global warming. No one took this up more enthusiastically than the leaders of the EU, who in 1997 adopted a "renewables" policy setting a target of 5.75 per cent of all transport fuel to be made up of biofuel by 2010. Stage Four came in 2004-07 when – driven by everything from the ratification of the Kyoto Protocol (originating in that 1992 Rio summit) to Al Gore's film An Inconvenient Truth – hysteria over global warming reached its peak, pushing it to the top of the world’s political agenda. The most obvious response came from the EU.

In March 2007 its leaders gathered in Brussels to adopt a package of measures designed to show that the EU was "leading the world on climate change". These ranged from stepping up the EU's "emissions trading scheme" to outlawing incandescent light bulbs. But they also included a mandatory target requiring 10 per cent of all EU transport fuel to come from biofuels by 2020 (which is why, since last April, 2.5 per cent of all fuel sold on British forecourts must be from "renewables"). 

In fact, it turns out there was something very odd about the inclusion of biofuels in this package. Internal European Commission documents show that, as late as January 2007, when officials were discussing that 10 per cent target, they saw it not as an answer to global warming but only as a way to increase the EU's "energy self-sufficiency". They were also aware that switching huge areas of farmland from food to fuel would drive up world food prices.

Indeed a 2006 report from the UN’s Food and Agriculture Organisation (FAO) had already suggested that for the EU to meet its 10 per cent target from home-grown biofuels would require a staggering 70 per cent of arable land to be taken out of food production, necessitating a huge increase in EU food imports. Even worse, by the end of 2006 the Commission was aware that the world was about to face a food shortage. 

Yet, in attempting to show that enough acreage would be available to meet the new biofuels target, the officials indulged in "Enron accounting", using the same areas of land three times.

"Set aside" allocated for other industrial crops was re-allocated for emergency food production in the light of the "global food crisis; then, within a matter of weeks, redesignated for biofuel production. Yet, despite all this going on behind the scenes, when the EU's political leaders nodded through their "global warming" package in March 2007, biofuels were thrown in, seemingly without any questioning from the politicians, including Tony Blair. 

In fact, it was at this point that, with startling speed, the backlash against biofuels – Stage Five of our story – suddenly erupted on all sides. Even before the EU had adopted its new target, the first criticism of biofuels was coming from those same environmental groups, Greenpeace and Friends of the Earth, which had once been their most fervent advocates. 

Their particular focus was the damage being done in the Third World, not least by the clearing for biofuels of vast areas of rainforest in Brazil and Indonesia, inter alia endangering the survival of Borneo's orang-utans. Next to weigh in, as the world suddenly woke up to its serious food shortage, were all those experts pointing out that a significant reason for this was the vast area of food-growing land already diverted to biofuels, thus shrinking food stocks and driving up prices. 

According to the World Bank's top economist, Don Mitchell, biofuels had been responsible for three-quarters of the 140 per cent rise in world food prices between 2002 and 2008. It was this that last October prompted Jean Ziegler, the UN's "special rapporteur on the right to food", to comment that biofuels could only bring "more hunger to the poor people of the world" and were a "crime against humanity". 

Most alarming of all to the global warming lobby, however, was a succession of studies showing that, far from helping to cut global CO2 emissions, biofuel production can often give off much more CO2 than it saves – not least by disturbing huge quantities of carbon dioxide locked in the soil which, according to the University of Minnesota, could release "17 to 420 times more CO2" than is saved by the fuels themselves.

A Cornell University study shows that biofuel production from farm crops such as corn takes 29 per cent more energy than is yielded by the fuel itself (although second-generation biofuel crops, such as hemp, are much more efficient). So devastating has been this onslaught on biofuels that last Monday, Ed Gallagher, chairman of our new Renewable Fuels Agency, published a report recommending that Britain should drastically review its policy, slowing the introduction of biofuels and concentrating on "second-generation biofuels", such as crop wastes and wood chips, that do not compete with food production. 

His findings were immediately endorsed by Ruth Kelly, the Transport Secretary, and Hillary Benn, the Environment Secretary – just as the European Parliament's environmental committee also called on the Commission to lower its targets. But the Commission now publicly maintains – despite its earlier internal analysis – that biofuels have not been the cause of higher food prices, which it blames on rising world demand, bad weather and international speculation.

"If you don't have targets you don't make progress," says a Commission spokesman, adamant that the 10 per cent biofuels target cannot be altered. With the powerful US farmers' lobby, backed by President Bush, equally insistent that nothing can be done to change a policy which, according to the FAO, could soon see nearly a third of US farmland diverted to biofuels, it seems this "crime against humanity" is set to continue.

Christopher Booker and Richard North recently published Scared To Death: From BSE to Global Warming, How Scares Are Costing Us The Earth (Continuum, £15.99)