Brussels blog

A friend of mine who works for the European Commission’s internal market directorate  moaned the other day that it was “turning into the OECD”. In other words, it had stopped bludgeoning the barriers to trade in the EU market with a battering ram of regulations and was instead consulting, advising and recommending change . But the OECD, a dry economic think tank , seems to be turning into the European Commission, judging by the latest furore surrounding it.

In early September its round table on sustainable development met to discuss a report entitled “Biofuels – is the cure worse than the disease”. The academic paper fuelled a controversy that has burned for several weeks.

I declare an interest. I was the first journalist to write about the paper and its view that many biofuels were often no more environmentally friendly than fossil fuels, and that governments should not be rigging the market in their favour with subsidies and targets for its use. This was then picked up by media around the world. Many of us were not clear enough that this was a working paper, prepared by outside experts, in association with Brice Lalonde, the chairman of the round table, who works from the OECD office but not for it (clear now?).

Richard Doornbosch, one author, is the principle adviser to the round table, also based at the OECD. Ron Steenblik, the other, joined the International Institute for Sustainable Development in Canada in 2006. Before that he spent four years as a senior trade policy analyst at the OECD.

Nor has the Paris-based outfit seemed unhappy to be associated with the report, which fits its view that there should be no subsidies or picking winners in technology terms.

Nevertheless, the biofuel industry is fuming. The Renewable Fuels Association and European Bioethanol Fuel Association have written a letter to Angel Gurria, OECD secretary-general, asking him to “disavow this report”. (Find it here). They point out that the European Commission is still sticking to its target of generating 10 per cent of vehicle fuels from plants by 2020 and that real OECD reports have talked up the potential of biofuels.

Gurria has responded, noting that the report is consistent with OECD thinking.

The US has also launched an offensive. Thomas Dorr, US under-secretary of agriculture, was in Brussels this week telling reporters that he hadn’t bothered reading the report as it was not official. “The biofuels industry is so new anyone can make any case they wish to,” he said. He says the 51 US cents a gallon credit to farmers for turning corn into ethanol was an investment – and less than subsidies given to the oil industry through lax regulation. He also pointed out that corn yields had risen by a quarter in a few years and the amount of ethanol that could be squeezed from a bushel was growing fast. Mr Dorr should know – he spent 30 years growing corn in Iowa.

Steenblik himself is dismayed at all the attention and has said the views were his own, as the Biopact website was all too eager to point out. It tore into the media coverage, though , like the author, it favours imported ethanol from developing countries rather than uncompetitive subsidised western products. “Big chunks of it have completely been left out of the coverage,” its blogger fumed.

However, when the New York Times used the report to write something it liked, its tune changed, citing a “recent report from the Organization for Economic Co-operation and Development, a Paris-based global economic think tank [note, the report was not by the OECD, but that's a detail]”.

The biofuels industry may not have the last word. Brice Lalonde, who told me after the meeting that participants from several governments had expressed grave doubts about the dash to biofuels, has just been made French ambassador for climate change.