28
4.3 Producers and Users in Developed Nations
Chapter 2.1.1 is a unique, but foremost important, chapter in Part II, because it will
primarily deal with producers and users of biofuel in the United States. While Brazil
would be the first successful nation to propagate the use of biofuel through its PróÁlcool policy, the renewed interest in biofuels in the twenty-first century was initially triggered by the US federal government’s substantial investments in the further
use of biofuels produced by domestic corns and soybeans. Its influence is formidable because using these feedstocks for biofuels directly competes with other conventional uses, which are vegetable oil and food as such. The added demand for
these crops can trigger price hikes infiltrated by opportunistic investments in future
option markets. In addition, wide varieties of government subsidies to producers,
often motivated by political interests, in the name of “green innovation” distort the
value of these crops. Nonetheless, the bioethanol production in the United States
has been steadily increasing even until 2011
1
, and the troubling nature of biofuels
that entertain competition between fuel use and food use can become a major issue
in 2012 when the North American farmers are hit by a major drought.
Users in the developing nations are also major stakeholders because they can
influence the demand for biofuels worldwide. Chapter 2.3.1 will touch on this issue.
In particular, the EU member states and many states of the United States have mandates regarding the mix of biofuels in the conventionally marketed automobile
fuels. For instance, EU’s Directive 2009/28/EC mandates each member state to turn
the 10% of its transportation fuels into biofuels before 2020. This kind of mandate
influences the global demand for biofuels. Users in developed nations are also concerned about rainforests and fair trade. Therefore, the governments of these nations
have been exploring the use of accreditation schemes for biofuels so that their policy for increasing the use of biofuels would not harm the interests of these domestic
NGOs and other interest groups.
4.4 Communities of Stakeholders in the Production Areas
There are many “other” key stakeholders in the field of production. For instance,
Chap. 2.2.1 articulates the impact of increased production of feedstocks on the environment. In Brazil, there is strong concern, particularly among international environmental NGO communities, about the expansion of plantations into rainforest
and in Cerrado. Even if a marginal expansion of plantation takes a piece of relatively less environmentally valuable land, it can have a spillover effect on water
resources and other competing land uses such as cattle herding. These indirect
impacts must be addressed in considering the expansion of biofuel uses and Chap.
2.2.1 tries to address these issues by analyzing such impacts quantitatively. Chapter
1 http://www.ethanolrfa.org/pages/statistics
M. Matsuura and H. Shiroyama
4.3 Producers and Users in Developed Nations
Chapter 2.1.1 is a unique, but foremost important, chapter in Part II, because it will
primarily deal with producers and users of biofuel in the United States. While Brazil
would be the first successful nation to propagate the use of biofuel through its PróÁlcool policy, the renewed interest in biofuels in the twenty-first century was initially triggered by the US federal government’s substantial investments in the further
use of biofuels produced by domestic corns and soybeans. Its influence is formidable because using these feedstocks for biofuels directly competes with other conventional uses, which are vegetable oil and food as such. The added demand for
these crops can trigger price hikes infiltrated by opportunistic investments in future
option markets. In addition, wide varieties of government subsidies to producers,
often motivated by political interests, in the name of “green innovation” distort the
value of these crops. Nonetheless, the bioethanol production in the United States
has been steadily increasing even until 2011
1
, and the troubling nature of biofuels
that entertain competition between fuel use and food use can become a major issue
in 2012 when the North American farmers are hit by a major drought.
Users in the developing nations are also major stakeholders because they can
influence the demand for biofuels worldwide. Chapter 2.3.1 will touch on this issue.
In particular, the EU member states and many states of the United States have mandates regarding the mix of biofuels in the conventionally marketed automobile
fuels. For instance, EU’s Directive 2009/28/EC mandates each member state to turn
the 10% of its transportation fuels into biofuels before 2020. This kind of mandate
influences the global demand for biofuels. Users in developed nations are also concerned about rainforests and fair trade. Therefore, the governments of these nations
have been exploring the use of accreditation schemes for biofuels so that their policy for increasing the use of biofuels would not harm the interests of these domestic
NGOs and other interest groups.
4.4 Communities of Stakeholders in the Production Areas
There are many “other” key stakeholders in the field of production. For instance,
Chap. 2.2.1 articulates the impact of increased production of feedstocks on the environment. In Brazil, there is strong concern, particularly among international environmental NGO communities, about the expansion of plantations into rainforest
and in Cerrado. Even if a marginal expansion of plantation takes a piece of relatively less environmentally valuable land, it can have a spillover effect on water
resources and other competing land uses such as cattle herding. These indirect
impacts must be addressed in considering the expansion of biofuel uses and Chap.
2.2.1 tries to address these issues by analyzing such impacts quantitatively. Chapter
1 http://www.ethanolrfa.org/pages/statistics
M. Matsuura and H. Shiroyama