Biofuels move to center stage

By David Evans

PARIS (Reuters) - Biofuels are set to be the major theme in global agricultural markets in 2007, driving more investment money into these underweighted commodity sectors.

As countries look to cut their dependence on traditional oil-based fuels, slow global warming and break their reliance on crude from the Middle East, new biofuel factories will come on stream around the world this year, producing alternative fuels using sugar, corn, rapeseed and palm oil.

"The development of biofuels is certainly one of the key elements in the evolution of agriculture in recent decades," French analyst Agritel said. "Make no mistake, the consequences of this sector will be extremely important."

But analysts say many question marks hang over the fledgling industry.

Will the extra demand on crops for fuel put their traditional food use in jeopardy? Will sugar-derived ethanol or oilseed-based biodiesel prove to be most cost-efficient or are new technologies using biomass likely to win the day?

Is the sector developing too fast? What will the environmental impact be? What happens if crude oil prices continue to fall? And how will it be regulated?

These are some of the questions to be tackled by industry leaders and policy makers at the Reuters Global Biofuel Summit, taking place in Asia, Europe and the Americas on January 16-17.

Speakers will include CEOs from major biofuel companies in Asia, Europe, the United States and Brazil as well as officials from the U.S. Department of Agriculture, the Chicago Board of Trade and the European Commission.  Continued...