Impact of Dutch and European biofuel policy on developing countries: new report

March 28, 2013

At the end of 2012, the Evert Vermeer Foundation travelled to Tanzania to assess the role and impact of Dutch and European biofuel policy on developing countries. Their report, “Fuelling progress or poverty? The EU and biofuels in Tanzania”, co-founded by Hivos, was presented on 27 March 2013 by Hivos partner Fair Politics to Dutch Minister for Foreign Trade and Development Cooperation, Lilianne Ploumen.

J. Van Teeffelen, author of the report, presented the outcomes of the study, after which Minister Ploumen gave a short speech, stating, “Sustainability is a broad concept, and the use of biofuels should not be at the expense of food security, human rights and biodiversity”. In the debate that followed, Sander van Bennekom of Oxfam Novib was critical of how the Netherlands and the EU implement regulations on biofuels. He maintained that commonly agreed commitments between the government and NGOs on downscaling (first generation) biofuels are not being complied with due to the biofuel industry lobby.  However, he singled out the Hivos biogas programme as one of the success stories in biofuel use and production.

The report’s main conclusion is that EU’s extensive stimulation of biofuel production and use in developed as well as developing countries has not been to the benefit of the latter. The Renewable Energy Directive (RED), which sets a 2020 a target of 10% renewable energy use (almost entirely of biofuels) in the transport sector, is inconsistent with European development cooperation objectives, as biofuels drive up food prices. The policy has also unwittingly encouraged large-scale land acquisition for biofuel production, resulting in land grabs and deforestation. Additional negative consequences are non-profitability of cash crops possibly resulting in bankruptcy of companies and women being sidelined from decision-making.

The Hivos Green Entrepreneurship programme has engaged in various pilot biofuel projects, mostly involving Jatropha, a first generation biofuel that was presented as a wonder crop some years ago. It was suggested that the crop would grow anywhere, require little attention and could be perfectly used as a biofuel, medicine or soap. This is not necessarily always the case. Yet Jatropha can be profitable for small-scale producers if it is grown and managed properly (not competing with food) and used for other purposes (e.g. medicine, soap) than exclusively as a biofuel.

These pilot projects aim to provide additional cash income for small-scale farmers who grow the crops, and may have additional features, such as adapting engines, converting the pure plant oil into bio-diesel, or even broader goals such as providing the community with renewable energy or fostering the independence of the local economy.

Hivos feels the EU could play an important role in promoting the effectiveness, sustainability and efficiency of Jatropha, while working with (local) organisations and businesses that support farmers to produce it. The EU should focus on small-scale producers and ensure women are effectively included in decision-making concerning Jatropha production and processing, as they are the main stakeholders.

However, Jatropha production is not a stand-alone solution for farmers in developing countries. We believe it is imperative to consider alternative sustainable strategies and other available oil crops and their applications to benefit smallholders in their farming and income-generating activities.

For more information, please read our policy paper, Biofuels: a Hivos perspective, which you can download in pdf from the right sidebar.