UN report outlines growing biofuels role in developing economies

By Sue Retka Schill | November 13, 2014

Biofuels now account for 1 percent of global energy use, a new report from the United Nations Conference on Trade and Development finds. “The State of the Biofuels Market: Regulatory, Trade and Development Perspectives” provides a sweeping global overview of the development of liquid biofuels.  It is an update of the UN agency’s initial 2006 report done as part of its biofuels initiative.

The 101-page document recounts the development of biofuels since 2006, looking at production in key countries and regions, international trade and consumption trends, as well as the evolving regulatory and political debates. “While in 2006 the biofuel market was only starting to become truly international,” the report states, “by 2013 bioethanol and biodiesel have already become established commodities traded daily in all continents.”

The report reviews market developments and regulatory frameworks in the main biofuels producers, from the U.S., the EU and Brazil to emerging producers in other Latin American countries and Asia. It also discusses the progress made and challenges faced in several in several developing countries, primarily in South America and Africa. Other chapters discuss first- and second-generation technologies, support measures and biofuels amid broader development challenges.

The report covers the emergence of land use and food versus fuel issues, taking mostly a neutral stance on the hotly debated topics and covers the emergence of sustainability certification. While such certification is “paramount to a better, more responsible biofuels industry,” the report says, “the implications of sustainability of biofuels and related feedstocks for developing countries remains a rather complex issue.” 

The report contains policy recommendations for developing countries to make beneficial use of biofuels.These include the creation of regulatory frameworks tailored to national resource endowments which do not antagonize food and energy supplies but rather enhance agricultural productivity, rural income and workers' skills. The development of competitive second-generation biofuels will pose a number of challenges to developing countries, the report adds. One key recommendation is a call for international strategies to avoid the emergence of a technological gap between land-intensive first generation and capital-intensive second-generation biofuels.

Looking ahead, the report stresses affordable energy will be needed to foster prosperity for all nations.  Sustainable development goals will be key “to avoiding environmental disruption and allowing human development to continue. This challenge cannot be met without the participation of bioenergy.”

“Biofuels will continue to provide different types of opportunities to different countries,” the report concludes. UNCTAD’s biofuels initiative aims to provide developing countries with access to economic and trade policy analysis, as well as capacity building activities and consensus building tools.

A full copy of the report can be downloaded here.