ASrIA - Press releases & notable news

The most important challenge for biofuels is the question of environmental benefit. This is the clear conclusion reached by Bank Sarasin in its latest sustainability study “Renewable Energies 2010” and the update on the theme of biofuels. First-generation biofuels in particular are in direct competition with food production and are forcing food prices upwards. The biofuel industry is therefore counting on the development of environmentally friendly and socially compatible technologies of the second and third generation. But factors such as crude oil prices, state subsidies and electric vehicles are other fundamental questions that investors have to deal with.

There are significant uncertainties surrounding the future of biofuels. In view of the limited availability of arable land and their doubtful environmental benefits, first-generation biofuels have limited potential as a fossil-fuel substitute, according to Sarasin’s new sustainability study. A life cycle analysis that takes into account not only CO2, but all the associated environmental impacts, produces a positive result for only a small percentage of biofuels. Here, relevant considerations include overfertilisation and loss of biodiversity, but also the effects of indirect land use change.

These effects have only recently been investigated in more depth: If biofuel crops are cultivated on existing arable land, mounting demand for food and cattle feed puts extra pressure on woods and grassland. Converting these areas into arable land can result in substantial CO2 emissions that can produce a negative environmental footprint for biofuels.

For more details, please see the attached media release.