Biofuels Firms Buy Up African Land, Cause Deforestation, Food Output Loss

Biofuels companies from the U.K. to Brazil and China are buying up large swaths of Africa, causing deforestation and diverting land from food to fuel production, the environmental group Friends of the Earth said.

Across the continent almost 5 million hectares of land, an area bigger than the Netherlands, have been sold to cultivate crops for biofuels since 2006, Friends of the Earth’s Brussels- based European division said today in a 36-page study.

European companies including Portugal’s Galp Energia SGPS SA, the U.K.’s D1 Oils Plc and Sun Biofuels Ltd. and Agroils Srl of Italy joined firms from Canada and Israel in buying acreage to plant jatropha to make biofuels, the study said. The 27- nation European Union has set a goal of getting 10 percent of transport fuels from renewable sources by 2020.

“The EU’s mandatory target for increasing agrofuels is a clear driver to the land grabbing in Africa,” Friends of the Earth said. “There is a risk that agrofuels, and with them, Africa’s agricultural land and natural resources, will be exported abroad with minimal benefit for local communities and national economies.”

Governments including Ethiopia, Ghana and Mali have encouraged the purchases, which in some cases are made without the consent of local communities, or an environmental impact assessment, the group said. The report lists land sold in Angola, Cameroon, Congo, Ethiopia, Ghana, Kenya, Madagascar, Mozambique, Nigeria, Sierra Leone and Tanzania.

Jatropha

Jatropha can use up valuable water resources and require expensive pesticides, while in some cases diverting farmland away from food crops, Friends of the Earth said. Companies including D1 Oils say the non-edible plant is a promising crop for biofuels that’s tolerant to drought and adaptable to different weather conditions.

Chinese, Swiss, German, Nigerian, Ghanaian and Norwegian firms are also listed as land purchasers. Friends of the Earth recommended that African nations halt the land purchases, and that the EU scrap its biofuel target, which was intended as a measure to cut greenhouse gases and combat climate change.

Non-profit interest groups including Greenpeace and Oxfam have said biofuels can do more harm than good, increasing greenhouse gas emissions as carbon dioxide-absorbing forests are cut down to make way for plantations.

Biofuels were also blamed in 2008 by researchers including the Washington-based International Food Policy Research Institute for contributing to rises in cereal prices. A study for the World Bank last month said “the effect of biofuels on food prices has not been as large as originally thought.”

Future land deals should include enforceable obligations for the investor, the agreement of local communities, and possibly a commitment that a certain percentage of crops cultivated should be destined for local markets, the study said.

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net.