EC dismisses claims it aims to cap first-generation biofuels use
London (Platts)--20Nov2012/1124 am EST/1624 GMT
The European Commission does not plan to "cap the production and
consumption" of first-generation biofuels as it moves to overhaul its
biofuels policies, but it will "cap the incentives" for their production,
Hans van Steen of the EC's Directorate-General for Energy said Tuesday.
"We are not proposing to limit the production or consumption of
crop-based biofuels. We are proposing to cap the incentives. There's a
difference," van Steen said at an industry event in London.
"Will member states have to scale back on their use? No. But if
consumption goes beyond our target, it will not count towards the overall EU
mandate," he said.
His comments came on the heels of a European Commission proposal
released in October that would reduce the use of first-generation biofuels to
5% of all energy used in transportation by 2020. The original goal set in
2009 allowed for a maximum of 10% use of first-generation renewable fuel.
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The proposal, which is unlikely to be voted on and fully implemented
before 2015, would also eliminate subsidies for food-based biofuels after
A batch of scientific studies concluded over recent years have pointed
to biofuels as the key cause for rising world food prices and the
displacement of highly biodiverse land.
Hanging over this debate is a report from the International Food Policy
Research Institute for the EU which showed that the expected environmental
gains of replacing fossil fuel with biofuels might be canceled out when
taking land use change into account.
"The modeling [for calculating indirect land use change] has improved in
the last five years, but there are still significant uncertainties. We still
don't have enough knowledge to pin down the precise impact of land use
change," Steen said.
Nonetheless, Steen claimed there is sufficient knowledge to "know that
first generation biofuels do have an impact [on land use change]. And we
wanted to send a strong signal to the market on where the investments should
The European Commission proposal calls for incentives for biofuels with
no or low indirect land use change, namely those made from waste or non-crop,
non-land-using feedstocks. These biofuels will count up to four times more
than first-generation biofuels towards the overall EU mandate.
Thomas Gameson, a public affairs manager at Spanish biofuels producer
Abengoa, said the EU is not providing the right incentives for the production
of second-generation biofuels.
"The way the industry moves depends on the policies to support or
discourage production. At the moment, there is not enough security for the
sector to build a very expensive project."
He said biofuels companies could take around a decade to build and
recoup investments on a production plant. "That's a substantial amount of
time, in which we cannot have policy U-turns," he said.
Currently, Europe does not have any second-generation biofuels plants
operating at commercial scale.
The biofuels sector has criticized the European Commission proposal
saying it could wipe out years of heavy investments in building capacity to
produce first-generation ethanol and biodiesel.
Oil major BP, which hosted the the panel discussion in London on
Tuesday, holds a 45% stake in Vivergo Biofuels. Vivergo is slated to open one
of Europe's biggest first-generation biofuels plant before year-end, only
months after the EU launched the proposal to overhaul its policies.
The project, estimated at around $500 million, will transform feed wheat
into fuel ethanol.
--Guilherme Kfouri, email@example.com
--Edited by Alisdair Bowles, firstname.lastname@example.org