PARIS – 12 September 2012 – The French cabinet has gathered to reconsider its policy that mandates and otherwise subsidizes the use of traditional crop-based biofuels. The new Socialist government's action plan for agriculture proposes that the use of crop-based biofuels should be capped at 7 per cent, the current level. This represents a U-turn from the previously-agreed EU objective.

The decision comes against a backdrop of rising food prices, which more and more researchers have linked to artificially stimulated demand for feedstocks for the biofuels industry. There is also an increasing body of scientific evidence arguing that crop-based biofuels have a limited ability to reduce greenhouse gas emissions and do so at a high cost.

In this sense, France’s move is a response to criticism from international organizations such as the Food and Agriculture Organization (FAO), the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD) and the World Bank; as well as many food companies and NGOs. In June 2012 the Global Subsidies Initiative (GSI) reviewed the changing global dynamics of the biofuel policy field in its report State of Play on Biofuel Subsidies: Are policies ready to shift?. It concluded that governments ought to reform subsidy policies that promote the production and consumption of biofuels that compete with food crops or negatively impact the environment.

In October-November 2012, the European Commission is expected to present its legislative proposal addressing indirect land use change caused by the EU's current biofuel policies. In the meantime, as a first-mover in the terrain of biofuel subsidy phase-out, France has also committed to mobilizing G-20 channels to ensure good policy coordination between large, producing countries on agricultural issues, according to the report from Reuters.