The 2006 European Biofuels Forum has just ended and what are my take aways from the meeting?
Delegates want a number of things, whether they are possible is another matter. They feel it is imperative that they get a sensible long term legislative framework that will give them some certainty that the investments they make will be commercially sensible and that will help them to make money and also produce biofuels.
The harder question to answer is the form of legislation. It is pretty certain in some areas that prescription is out at this stage in biofuels development. It would be a mistake to legislate too firmly on the types of technology that should be used. Legislation should be enabling not stifling. Legislators need to be certain about what they are legislating for is it to keep rural jobs or is it to help the environment or is it to stimulate technology?
But there does need to be regulation of the different parts of the biofuel industry in Europe, once again, this should help encourage, rather than stifle innovation, but the current European minimum standards for fuel should be strengthened. It seems to me that it would be best for Europe if this came from the centre. Returning to different fuel standards by country will help no one. Having common standards would help the customers of the biofuels businesses. Engine manufactures, especially want sensible standards that apply across Europe and also want the assurance if they design engines for a fuel it will still be around in 20 or 30 years.
One of the best parts of the meeting for me has been the openness and interest that delegates have shown in each others businesses. I have said before that this is because the industry is fragmented and no-one quite knows who’s really going to be important to them in the future. With age comes maturity, and when the industry grows older it is likely to stratify more, there will be consolidation, prices and margins will fall and there will be shake outs. But until that time comes, let’s enjoy the ride.