As part of the EU's commitment to promote renewable energy, it is encouraging member states to produce biofuels as a way to cut carbon emissions.The Federation of Bakers (FoB) supports the role that renewable energy sources from agricultural sources can play in tackling climate change. However, this will lead to additional demand for crops such as wheat and will carry implications for the supply of wheat for bread.
The mandatory target proposed in the EU Energy Package of 10 January, 2007, is that biofuels should replace a minimum of 10% of petrol and diesel for transport by 2020. It is a worry that the mandatory nature of the target could give rise to exacerbated shortages of agricultural raw materials for food production.
Increased demand for wheat crops would inevitably also affect price. In fact, the EU Energy Strategy for Biofuels estimates that, by 2010, cereal prices will increase by 6-11%. This would come hot on the heels of previous wheat price rises in recent months.
To ensure a smooth move to the increased use of biofuels, the FoB believes that policies should be managed in a way that does not distort the availability of agricultural raw materials for food. The introduction of financial incentives to encourage farmers to sell agricultural raw materials to the biofuel industry must be carefully managed.