Co-op warns on bio-fuel investments

by Gill Montia

Story link: Co-op warns on bio-fuel investments

Co-operative Insurance is warning investors to be cautious about putting their money into bio-fuels projects.

Bio-fuels are seen by many as a means of reducing reliance on fossil fuels and cutting harmful emissions.

However, the insurer is aware that significant questions over the long-term sustainability of bio-fuels exist.

Sam Lacey, an analyst at Co-operative Insurance, says: “On the face of it investing in bio-fuels appears attractive as governments worldwide are setting ambitious targets to significantly increase production. However, there is a risk that bio-fuels could actually have a negative impact on the environment due to the vast amounts of land required for production.”

The crops needed for bio-fuel production could in future take up large areas of land, which in itself will raises issues about deforestation and implications for global food prices.

Ms Lacey is of the opinion that at this stage: “More must be done to make their long-term supply sustainable.”

Meanwhile, the European Union has put in place a target for 10% of all transport fuels to be bio-fuels by 2020.