State of play on biofuel subsidies: are policies ready to shift?
The debate on the costs and benefits of governments’ support to biofuels development has gained considerable momentum, especially in light of fiscal austerity measures and the “food versus fuel” debate associated with the impacts of biofuels expansion on agricultural markets. The number of stakeholders in this debate has also significantly grown as more and more developing countries have begun producing biofuels or are currently considering this move. The purpose of this paper is to summarize and discuss the current state of play around over US$20 billion in subsidies and other forms of government support to the production and consumption of biofuels globally. The report examines whether the state of play on biofuel subsidies is now changing under the influence of three dynamic factors: the “food versus fuel” debate, advanced biofuels developments and the austerity policies necessitated by the financial and economic crisis.