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Report says biofuels expensive and have 'limited impact' on environment

A damning report on the production and use of biofuels, published by the Organisation for Economic Cooperation and Development (OECD), has suggested it is costly to produce and has limited impact on reducing greenhouse gases.

The OECD said that the biofuels based on foodstocks have a much smaller effect on the reduction of greenhouse gases than ethanol produced from sugar cane.

OECD said: "Ethanol from sugar cane - the main feedstock used in Brazil - reduces greenhouse gas emissions by at least 80 per cent compared to fossil fuels. But emission reductions are much smaller from biofuels based on feedstocks used in Europe and North America."

Recommendations from the report include pushing governments to refocus policies away from the production of biofuels and towards reducing energy consumption.

Creating more open markets in biofuels and feedstocks will, the OECD say, improve efficiency and lower costs.

Provision must also be made for a focus on alternative fuels that maximize the reduction of fossil fuels and have a significant impact on reducing greenhouse gas emissions.

The Energy Independence and Security Act of 2007 mandates that producers such as BP must be using 36 billion gallons of biofuels - mainly ethanol and biodiesel -annually by 2022.