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2 CCLR 67 (2008)
Climate Change and the International Trade of Biofuels

handle is hein.journals/cclr2 and id is 71 raw text is: CCLR 112008                          Climate Change and the International Trade of Biofuels 1 67

Climate Change and the International Trade
of Biofuels
Haroldo Machado-Filho*
This paper explores the significant role that biofuels have in mitigating greenhouse
gases, especially in the transportation sector. The paper focuses specifically on the bene-
fits of the use of ethanol and biodiesel and the emergence of their international trade,
as well as some issues that have been recently raised regarding these alternative fuels.
That includes environmental and socio-economic considerations which could potentially
lead to tariff and non-tariff barriers to the international trade in biofuels.

I. Introduction
The causes of climate change are strongly related to
the current patterns of production and consump-
tion of fossil fuels. The 2007 Fourth Assessment
Report of the Intergovernmental Panel on Climate
Change (IPCC) highlighted that CO2 emissions
increased 8o% from 1970 to 2004, representing
77% of the emissions in 20041. One of the largest
growth areas in greenhouse gas (GHG) emissions in
this period in an assessment of end-users sectors
was the transportation sector with 120%. This sec-
tor accounts for 23% of world energy-related CO2
emissions, with 74% coming from road vehicles.2
Moreover, GHG emissions from the transporta-
tion sector are expected to continue to sharply
increase in the near future, given that each year an
increasing number of people is gaining access to
motorised forms of transport. Although the vast
majority of the world's population still does not
* Haroldo Machado-Filho is Ph.D. in International Law, Graduate
Institute of International Studies - IHEI, Geneva. He is special
adviser to the Interministerial Commission on Global Climate
Change in Brazil. The ideas contained in this paper do not neces-
sarily reflect the official position of Brazil on this issue.
1 Intergovernmental Panel on Climate Change (IPCC), Climate
Change 2007: Synthesis Report, WMO/UNEP, 2007 (unedited
copy), p. 1 (Topic 2).
2 IPCC, Climate Change 2007: Mitigation of Climate Change, Wor-
king Group III Report, WMO/UNEP, 2007, p. 325.
3  Ibid.
4 UNCTAD, The Emerging Biofuels Market: Regulatory, Trade and
Development Implications, UNCTAD/DITC/TED/2006/4, New
York and Geneva 2006, p. 5.
5 Ethanol is an alcohol produced by the biological fermentation
of carbohydrates derived from plant material, cf. ibid.
6 Biodiesel is a synthetic diesel-like fuel produced from vegetable
oils, animal fats or recycled cooking grease, cf. ibid.

have access to personal vehicles, this situation is
changing fast, especially in emerging economies.
Despite the growing pressure on all countries to sig-
nificantly mitigate GHG, it is certainly unfair to pre-
vent new users from enjoying the benefits and lux-
uries of modern mobility.
If greenhouse gas emissions are to be curbed, the
transportation sector cannot develop along the
same path it has in the past or in the business-as-
usual scenario, given that it heavily depends on the
burning of fossil fuels. In fact, according to the
IPCC, 95% of the total energy used by world trans-
port is based on petroleum3.
Nowadays, a worldwide debate is taking place on
how to reduce dependence on oil, especially in the
transportation sector, given that not only its com-
bustion is recognised as one of the main factors
intensifying the greenhouse effect on our planet,
but also the price of oil, a finite resource, is rising
significantly in the international market.
Although it is unrealistic to think that the
dependence on oil will be overcome in a short space
of time, it is certainly valid to discuss alternative
energy sources related to the transportation sector.
Among existing mitigation options, biofuels have
an important role to play in this debate.
Biofuels are fuels produced from biomass, which
includes organic matter available on a renewable
basis, such as agricultural crops and residues, wood
and wood residues, animal wastes, etc4. From the
variety of existing biofuels, this paper will focus on
ethanol5 and biodiesel6, given that they are the
most used liquid biofuels for transport-related ener-
gy production and the only available large scale
substitutes for petrol and petroleum diesel in trans-
port. Also, they can provide considerable reductions

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