Biofuel industry fights the critics

By Gerard Wynn

LONDON (Reuters) - Biofuel supporters are fighting criticism that the "green", alternative transport fuel has raised food prices and harms the environment, amid mounting evidence that the debate is harming the industry.

The concerns come at a time of record oil prices which should be playing into the hands of producers of the substitute for gasoline and diesel.

Instead recent reports, for example from the OECD and by Nobel laureate chemist Paul Crutzen, have continued charges that a boom in biofuel production is spawning adverse trade-offs, putting the industry on the defensive as investors become wary.

"In terms of image it is harming us, and I would say unfairly harming us," said, Raffaello Garofalo, head of the Brussels-based lobby group the European Biodiesel Board.

The German biodiesel industry is lobbying against tax increases timetabled for next January, and one worry is that a tarnished reputation will play against them.

"We're worried that bad press about the social, environmental impacts will influence the tax decision," said Frank Bruehning, spokesman for the German biofuels association.

Biofuels are meant to be a dream answer to problems including climate change, energy dependency and dwindling farm incomes.

Produced from food crops like sugar cane, rapeseed and palm oil, they provide an alternative to conventional transport fuels like gasoline and diesel, seen important as oil supplies become ever more concentrated among fewer producing countries.