Two main factors, which worries the Bank, are (a) insufficient land to support corn grown for both food and fuel and (b) an insufficient market for the byproducts of ethanol production.
An excerpt from the report narrates:
It is actually unclear how much land is available for growing energy crops without having a negative impact on the needs of the food industry, animal feed industry, fallow land, soil quality and biodiversity.
University of Minnesota researchers have calculated that even if all current US corn and soybean production were used to produce biofuels, it would meet only 12% of gasoline demand and 6% of diesel demand.Even the Renewable Fuels Standard’s of ethanol production level, as stated in the Energy Policy Act of 2005 (about 5% by 2012), corn ethanol production will generate about 12 to 14 million metric tons of by-product animal feed – to which Bank Sarasin cautions that more markets and applications would need to be found.
