Exclusive: EU to Limit Use of Crop-Based Biofuels – Draft Law
(Reuters) The European Union will impose a limit on the use of crop-based biofuels over fears they are less climate-friendly than initially thought and compete with food production, draft EU legislation seen by Reuters showed.
The draft rules, which will need the approval of EU governments and lawmakers, represent a major shift in Europe’s much-criticized biofuel policy and a tacit admission by policymakers that the EU’s 2020 biofuel target was flawed from the outset.
The plans also include a promise to end all public subsidies for crop-based biofuels after the current legislation expires in 2020, effectively ensuring the decline of a European sector now estimated to be worth 17 billion euros ($21.7 billion) a year.
… While low values for ethanol made from cereals and sugars are expected to have little market impact, a much higher value for oilseeds is likely to exclude most biodiesel made from rapeseed, soybeans and palm oil from counting towards the fuel suppliers’ targets.
The Commission says its proposal will protect existing investments until 2020, but biodiesel producers fear that by removing any incentive for fuel companies to use biodiesel, it will put the future of the entire sector in doubt.
… But with diesel cars accounting for about 60 percent of Europe’s fleet and rising, it is unlikely that increased ethanol consumption will be able to completely offset the likely decline in biodiesel consumption. READ MORE and MORE (Platts)