Brussels, 08/02/2006 (Agence Europe) - On 8 February, the European Commission adopted a strategy in seven planks to promote the development of the production of bio-fuels in the EU (EUROPE 9126): to stimulate demand, to act in favour of the environment, to develop production and distribution, to extend supplies of raw materials, to boost commercial possibilities and to help developing countries.
Mariann Fisher Boel, the Commissioner in charge of Agriculture and Rural Development, told a press conference that this "highly ambitious" strategy was of "vital importance" for developments with the climate, seeking new outlets for farmers and reducing Europe's dependency on imported fossil fuels. She pointed out that the EU had failed to achieve the objectives laid down by the 2003 directive on bio-fuels, which were 2% of the market share for bio-fuels by 2005 and 5.75% by 2010. In reality, bio-fuels have achieved a market share of just 1.4%. Ms Fischer Boel stated that in order to respond to the objective of stimulating demand in this sector, the Commission would present a report with a view to a possible revision of the directive on bio-fuels, by the end of the year. The Commission will then decide whether the objective of achieving a market share of 5.75% by 2005 should then be made binding and, indeed, whether this objective should be increased, said Ms Fischer Boel in response to questions from the floor.
The Agriculture Commissioner stated that in 2004, Community production of bio-fuels stood at 2.4 million tonnes (representing around 0.8% of EU consumption of petrol and diesel), comprising 0.5 million tonnes of bio-ethanol (10% of global production) and 1.9 million tonnes of bio-diesel. According to estimations, the production capacity of bio-diesel in the EU should reach nearly 4 million tonnes in mid-2006. Ms Fischer Boel recommends a "well-balanced" approach to commercial matters (developing European production whilst maintaining import flows) and believes that we must "focus on research", particularly into second-generation bio-fuels. "If we do not act now, we run the risk of missing the boat on this new generation of bio-fuels", she warned.
The Commissioner with responsibility for development policy, Louis Michel, stated that a greater market for bio-fuels in Europe "represents new commercial possibilities" for the developing countries, "potentially major producers of biomass, particularly in tropical areas". He went on to add that the bio-fuel sector also offers a "viable alternative" to the ACP countries hit by European reforms in the sugar sector. He pointed out that "all this" will be the subject of specific EU assistance, on the country-by-country basis. Mr Michel also spoke of the dramatic consequences of increased oil prices on the most fragile economies of the developing countries, particularly of the ACP countries (with the exception of Angola and Nigeria, he added). Studies show that the annual impact of this increase in oil prices on African countries "may be up to 10 times higher than the debt relief recently granted by the G8", Mr Michel warned, going on to point out that this reality could "knock a large number of these countries from low growth levels into a recession, and lead to situations of payment stoppage". Mr Michel also referred to the specific and exemplary case of Brazil, which produces bio-ethanol which is able to compete with fossil fuels. "However, we must remain realistic", he said, noting that it will take considerable efforts for the industry to achieve "a degree of similar development" in the ACP countries in the medium term. That said, Mr Michel added that factors such as increased demand, high oil prices, higher-performing technology and targeted support "may make bio-fuels an economically interesting option in certain developing countries".
Asked about the possible contradiction between the need to develop the European bio-fuels market and that of encouraging poor countries to find outlets for these products, Ms Fischer Boel pointed out that: the EU should dedicate 15.5 million hectares for bio-fuels to reach the 5.75% of the market by 2010 out of a total cultivated surface area of 96 million hectares. The EU will be able, in theory, to be self-sufficient in bio-fuels “but I don't think we'll get to this situation”. She explained that the EU would respect both the interests of national producers and its trade partners. Mr Michel replied that, “it is not just a matter of telling ACP countries that access to the European market will make the difference”. Michel also insisted on the importance of initially developing the internal markets of these countries and noted that this kind of product could “in the long term represent export outlets for these countries”. Nevertheless, he recognised that it would practically be impossible for developing countries to compete with bioethanol produced by Brazil.
Here are the main measures planned for the bio-fuels strategy:
Stimulating demand for bio-fuels: as well as report revision of the biofuels directive, the Commission is encouraging the Council and European Parliament to “rapidly” promote clean and efficient vehicles including those using a high level bio-fuel mix.
Developing environmental benefits: the Commission will examine how biofuels can best contribute to reducing C02 emissions from cars. It also intends to propose measures to ensure that bio-fuels help reduce the greenhouse effect.
Developing production and distribution: the Commission seeks to encourage Member States and their regions to consider biofuels opportunities in rural development programmes; and increase monitoring to ensure no discrimination against biofuels. It will also call on industries to justify practices that hinder the introduction of bio-fuels and inspect the behaviour of these industries to ensure that there is not discrimination against these products.
Increase the supply of primary materials: decision on reform of the European sugar sector already plans to make beetroot sugar cultivated for manufacturing bio-ethanol eligible for the non-food system applicable to fallow land and the bonus for energy crops. The reform also confirmed the need to impose quotas on beetroot sugar grown for manufacturing bio-ethanol. The Commission will also assess possibilities for additional processing of cereals from existing bio-fuel intervention stocks (to help reduce the quantity of cereals export discounts; it will produce a report in 2006 on implementing the system of energy crops; it will present in 2006 a silvicultural action plan (important for the production of second generation bio-fuels; reflect upon measures for facilitating greater use of energy resources: organic waste from the paper industry; possibilities for using animal by-products and recycled kitchen waste.
Enhancing trade opportunities: the Commission will assess the possibility of putting forward a proposal for separate customs codes for biofuels; it will pursue a balanced approach in trade talks with ethanol-producing countries, The Commission will ensure that measures for ACP Sugar Protocol countries affected by the EU sugar reform can be used to support the development of bioethanol production; develop a coherent Biofuels Assistance Package for developing countries; and examine how best to assist national and regional biofuel platforms. It will propose amendments to the “biodiesel standard” in an effort to facilitate the use of a wider range of vegetable oils in biodiesel production and to help ethanol replace methanol in the production of biodiesel.
Supporting developing countries: the Commission will ensure that measures for ACP Sugar Protocol countries affected by the EU sugar reform can be used to support the development of bioethanol production.
Research: the Commission will continue to support the development of an industry-led 'Biofuel Technology Platform' which will make recommendations for research in this sector
The Commission will assess the possibility of putting forward a proposal for separate customs codes for biofuels; it will pursue a balanced approach in trade talks with ethanol-producing countries; and propose amendments to the “biodiesel standard”.
Supporting developing countries.
The Commission will ensure that measures for ACP Sugar Protocol countries affected by the EU sugar reform can be used to support the development of bioethanol production; through research, production costs could be cut by 30% beyond 2010, according to the Commission.