UK Money News

Money News

3rd March 2008

Investors 'should be wary of bio-fuels'

Investors have been urged to take a cautious approach to bio-fuels.

Co-operative Insurance has warned that while the technology has the potential to reduce the world's reliance on oil, there are serious questions over its long-term sustainability.

This comes as more and more investors are looking for ethical investment vehicles.

"On the face of it investing in bio-fuels appears attractive as governments worldwide are setting ambitious targets to significantly increase production," said Sam Lacey, an analyst at Co-operative Insurance.

"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.

"More must be done to make their long-term supply sustainable," he added.

The European Union has set a target for ten per cent of transport fuels to be bio-diesel by 2020.

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