UK adoption of RED would be encouraging news – Ensus

08 December 2011 14:23  [Source: ICIS news]

LONDON (ICIS)--The likely adoption of the EU's Renewable Energy Directive (RED) by the UK “would be encouraging news”, a spokesperson for UK-based bioethanol producer Ensus said on Thursday.

The directive requires EU members that adopt it to produce a pre-agreed proportion of energy consumption from renewable sources. The aim is that the EU as a whole will obtain at least 20% of its total energy from renewable sources by 2020 and utilise a 10% share of renewable energy specifically in the transport sector.

Ensus’s 410,000 tonne/year biorefinery at Wilton in the UK has been shut since the end of May this year.

The company has attributed the temporary closure to a number or issues, including the slow implementation of RED, delays to the approval of voluntary sustainability schemes and the importation of US E90 (90% ethanol blended gasoline), which benefits from a US government tax credit and is currently subject to a lesser duty.

According to the press officer for Liberal Democrat Member of Parliament for Redcar Ian Swales, the UK is likely to implement RED as of 15 December 2011.

Referring to the likely adoption of RED by the UK, the Ensus spokesperson said: “This would be encouraging news. Other issues are yet to be resolved but things are moving in the right direction and we remain confident in the long-term future of the business.”

There is no further information as to when the Ensus biorefinery will restart, but the company's concerns are slowly being resolved, with several voluntary sustainability schemes now approved by the EU. 

Furthermore, the EU is launching an investigation into a complaint by the European Producers Union of Renewable Ethanol (ePURE) that alleges US ethanol is being dumped in Europe.

If this complaint is upheld, sources believe levies could be applied to imports of US ethanol, curbing the number of shipments arriving in Europe.

In addition, the US volumetric ethanol excise tax credit (VEETC) will expire at the end of the year and it is unclear whether it will be renewed. If the VEETC is permanently removed it could limit the competitive nature of E90.

The EU also plans to amend the import tariff under which E90 is imported, making it subject to a higher duty. Official documents for this are yet to be published but it is thought this measure could diminish E90’s appeal.

By: Sarah Trinder
+44 20 8652 3214

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