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EU energy ministers agree to cap food-based biofuels

01 July 2014

On June 13, European Union energy ministers agreed to limit production of biofuels made from food crops, responding to criticism that they stoke inflation, create food shortages and do more environmental harm than good. Biofuels were originally seen as an important way to cut fossil fuel use.

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Stock image

Studies show that taking EU land out of production to grow rapeseed oil in particular is creating more climate problems than it solves. The more fuel of this type that is put into cars the bigger the deficit created in the edible oils market. This had lead to increased imports of palm oil from Indonesia, often produced on deforested land.

The EU ministers' endorsement of a new compromise overcomes a stalemate late last year when governments failed to agree on a proposed 5% cap on the use of biofuels based on crops such as maize or rapeseed. The June deal would set a 7% limit on the use of food-based biofuels in transport fuel.

European Energy Commissioner Guenther Oettinger said the agreement was an important step towards moving to a new generation of more sophisticated biofuels based on waste and other non-food products.

The proposed 7% limit is part of a goal to get 10% of transport fuel from renewable sources by 2020, as part of efforts to curb greenhouse gas emissions and EU dependence on imported oil and gas.

Initially, the European Union backed biofuels as a way to tackle climate change, but research has since shown that making fuel out of crops such as maize displaces other crops, forces the clearing of valuable habitats, and can inflate food prices.

The next generation of advanced biofuels, made from waste or algae for example, does not raise the same problems, but does require more investment.

The agreement could mean that the overall goal to get 10% of transport fuel from renewable sources by 2020 is missed, analysts say. Currently around 5% of EU transport fuel comes from renewable sources.

Food-based bio-refiners, which have invested on the basis of the original 10%, say a lower target threatens jobs. And those trying to develop advanced biofuels say the progress they are making is under threat.

The agreement is part of EU plans to amend the 2009 Renewable Energy Directive and the 1998 Fuel Quality Directive, and it must now go before  the European Parliament.
In September 2013, MEPs backed proposals to limit the amount of food crops used to produce biofuel, amending the target from 10% to 6% by 2020. They also suggested a figure of at least 2.5% for next-generation biofuels.

According to the environmental group Greenpeace, the EU uses more than 60% of rapeseed for biofuels, while theEU's Joint Research Centre has calculated that scrapping the current biofuel incentives could lower the price of vegetable oil in the EU by 48% by 2020.

The European Renewable Ethanol Association (ePURE) has rejected the suggestion that biofuel crops are putting too much pressure on food production. It also argues that the impact of biofuels on food prices has been greatly exaggerated.

The European Biodiesel Board (EBB) said it was aware of the problems but believes that biofuels have many positives. These include improved fuel security and reduced dependency on animal feed imports, thanks to the rapeseed grown for biodiesel.

The compromise supported by ministers in June included a 0.5% non-binding target for next-generation biofuels, which environmental campaigners say is not enough to make a difference.
EU companies are considered world leaders in next generation biofuel R&D. Novozymes in Denmark has become a leader in developing enzymes to break down waste, Biochemtex has built a €150m biorefinery in Italy and in Finland, forestry company UPM has a refinery using wood waste to create a 20/80 biodiesel/diesel mix for cars. The latter claims its fuel produces 80% fewer emissions that normal diesel.

The failure to agree a binding target for next generation biofuel could jeopardise this nascent industry, campaigners claim.

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