EU under pressure to finalise deal on biofuel production

Drought-stricken crops and record high grain prices have strengthened critics of the EU biofuel industry, adding fears of a food crisis to their claims that it does not ultimately reduce carbon dioxide emissions.

The anxiety adds to pressure on the European Commission to forge a deal to help ensure biofuels do not clash with food production or the environment.

Such an agreement would remove some of the uncertainty over the multibillion-euro bioenergy industry.

The UN Food and Agriculture Organisation last week called for a suspension of US ethanol quotas as a response to the impact of the worst US drought in more than half a century on corn supplies and prices.

“The US situation should be a warning for the EU that our inflexible biofuel mandate can lead to food price volatilities, especially as we are currently converting 65% of our vegetable oils into biodiesel,” said Nusa Urbancic, programme manager at campaign group Transport and Environment.

In the EU, far more than in the US, the raison d’etre of biofuel is to lower carbon emissions. Urbancic and many other campaigners doubt it achieves that.

“Science has also shown that biodiesel can be worse for the climate than conventional oil, once indirect impacts on forests and peatlands are included.”

Action plans drawn up by EU states predict that bioenergy, including biomass for power generation and biofuel for transport, will provide more than 50% of the EU share of renewable energy as part of 2020 climate goals.

Use of biodiesel — dominant in Europe, while ethanol prevails in the US — is expected to double by 2020 to 19.95m tonnes of oil equivalent. The EU already has enough refining capacity to cope with that, according to Rabobank. However, it faces daunting challenges in coming up with the investment and technology needed to move to feedstock, such as weeds, grass and waste stems, leaves, and husks, that would take the pressure off grain supplies for food.

The European Commission has said it opposes anything that inflates food prices. However, it has not worked how to ensure that its own biofuel policy does not have that distorting effect.

Reuters