Biofuels industry to get support in form of subsidies

Subsidies worth $25 billion (£12.5 billion) will be awarded to the biofuels industry in the US, Canada and the European Union by 2015.

That is the conclusion of the Organisation for Economic Cooperation and Development (OECD) who estimated that subsidies totaled $11 billion (£5.5 billion) in 2006.

The OECD said that the industry was "highly" dependant on support in the form of tax breaks, financial aid, import tariffs and compulsory usage.

Under EU guidelines designed to cut carbon dioxide emissions from fossil fuels, it aims to have ten per cent of its transport fuels coming from biofuels by 2020.

Debate about whether the production of biofuels has caused food prices to rise continues.

According to the International Monetary Fund, their production has caused 20 to 30 per cent of recent gains in food prices.

A recently leaked confidential report from the World Bank stated that biofuels had forced global food prices up by as much as 75 per cent.

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