BP supports biofuels, but sees barriers for ethanol

16 February 2006 21:04  [Source: ICIS news]

BRUSSELS (ICIS news)--BP supports the introduction of biofuels but sees limitations in the use of ethanol, said Philip New, senior vice president of BP Fuels Management Group UK, said on Thursday.

"We strongly support the introduction of conventional first generation biofuels as the positive first step in the use of biomass," he told the Biofuels Conference.

BP was the first major oil company to introduce E10 - 10% ethanol in gasoline - in the US and Venezuela. BP is driving biofuels in Europe as the first major to bring 5% ethanol blend to Germany, along with the switch of its methyl tertiary butyl ether (MTBE) plants in Europe to ethyl tertiary butyl ether (ETBE), he added.

But ethanol is limited due to competition with food and power crops, quality and handling difficulties, supply chain issues, blend limitations and vapour pressure problems.

"We need to think of much bigger blends than 5% by 2020-40. If we free up crop land and make dedicated energy crops, this could theoretically lead to biofuels meeting 30% of fuel demand in Europe instead of the EU target of 5% by 2012," New said.

He said BP thinks tax incentives are a useful way of stimulating market activity but is not keen on mandates due their inflexibility and their impact on supply security.

"We need the right fiscal framework to keep biofuels competitive with other fuels but mandates are probably unsustainable in the long term," said New.

By: Geraldine Gilmartin
+44 20 8652 3214

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