EU publishes proposals to cap use of food, crop-based biofuels

17 October 2012 15:30  [Source: ICIS news]

LONDON (ICIS)--The European Commission published a new biofuels proposal on Wednesday which confirms it plans to limit the use of food, crop-based biofuels to reach the 10% renewable energy in transport target, to 5%.

Leaked draft proposals in September showed the Commission also planned to amend the Renewable Energy Directive (RED) to include indirect land use change (ILUC) emissions in its sustainability criteria, but the new proposals will not hold fuel suppliers accountable for ILUC emissions.

The Commission now plans to limit the contribution from coventional biofuels with risk of ILUC emissions towards RED targets, and to incentivise low-ILUC biofuels.

"This proposal will give new incentives for the best-performing biofuels. In the future, biofuels will be saving more substantial greenhouse gas emissions and will reduce our fuel import bill," Energy Commissioner Gunther Oettinger said.

''For biofuels to help us combat climate change, we must use truly sustainable biofuels. We must invest in biofuels that achieve real emission cuts and do not compete with food,” Climate Action Commissioner Connie Hedegaard added.

“We are of course not closing down first generation biofuels, but we are sending a clear signal that future increases in biofuels must come from advanced biofuels. Everything else will be unsustainable,” she said.

A source from the European fuel ethanol market said.“The 5% cap on the use of food crop-based biofuels means nobody will bother to invest in new ethanol capacities now.”

The source added: “Although this isn’t directly impacting prices, it definitely makes the outlook for fuel ethanol more pessimistic.”

In a joint statement, biofuels and agricultural groups including the European Biodiesel Board, ePURE, Copa-Cogeca, Fediol, Coceral and the European Oilseed Alliance said the new proposals were “set to decimate the biofuels industry in the midst of the European economic crisis.”

“The EU farmers and biofuels industries remain steadfastly opposed to the European Commission’s proposal to limit biofuels made from certain arable crops and to add ILUC to the renewable energy and fuel quality directives,” they said

“A proposal based on unfounded and immature ILUC science and a 5% cap in 2020 would destroy the biofuels industries and related sectors such as crushing and sugar facilities. It would also cut off European farmers from a key market, reducing the crops diversification.”

“Any change in policy must safeguard the investments made and ongoing toward fulfilling the Commission’s initial objectives of 10% renewable energy for transport production in the EU. Fundamental problems remain in the EC proposal which will have devastating impact on the biofuels industries and diversification of farmers’ revenues,” they added.

($1 = €0.77)

By: Sarah Trinder
+44 20 8652 3214

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