Investor's perspective on biofuels.

F&C Management, a European investment firm with € 141.0 billion euro under management (as at 31.12.07) has published a research note on biofuels, Biofuels and sustainability - an investor perspective.

F&C warns that if companies do not convince the public that they will move towards sustainable business models, they may find that governments turn back on the targets and subsidies that are driving their industry's growth. F&C calls for four actions in 2008 for the biofuels industry to rebuild public confidence and to deliver sustainable investment returns:

• Governments need to set a clearer political and regulatory framework for a sustainable and competitive biofuels industry, and remove European and US trade barriers such as tariffs on Brazilian ethanol imports. Governments need to promote investment in new technology, as this will be key to the industry's success, and ensure policies are driven by climate change and link subsidies to achieved carbon savings.
• The biofuels industry needs to work more closely with governments to promote political objectives on carbon savings, technology, food prices, food security and international development. The industry also needs to encourage governments to support easier distribution of biofuels.
• Global industry-wide standards must be implemented to ensure biofuels have a net positive impact on ecosystems. This needs to happen fast, as biofuels producers face a profit margin squeeze due to rising commodity prices, and many are sourcing low-cost feedstocks, regardless of the long term environmental damage they cause.
• The industry must engage more actively in public debate about biofuels and demonstrate transparency about carbon savings and sourcing impacts.