Trade and markets


European Union
Commodity Group
Policy Category
Renewable energy
Policy Instrument
Renewable energy policy
EU parliament endorsed draft proposal to cap the contribution of food-based biofuels in the transportation sector and to introduce mandatory reporting of GHG emission recution levels for biofuel.
EUROPEAN UNION – long-term biofuel policy: The environment committee of the EU Parliament has endorsed the EU Commission’s draft proposal (see MPPU Nov.’12) to cap the contribution of food-based biofuels in the transportation sector and to require reporting of estimated GHG emission levels for each biofuel, including mandatory accounting of ILUC effects. The committee recommended to limit the contribution of food-based (or ‘first-generation’) biofuels to 5.5 percent of total energy consumption in 2020 – as opposed to the originally proposed 5 percent, and compared to the current level of about 4.5 percent – with a view to ensure that support granted to such biofuels does not unintentionally harm the environment or displace food production. The proposal represents a reversal from the EU directive approved in 2009, which fixed the contribution of renewable energy sources at 10 percent. The committee also proposed that ‘advanced’ (or ‘second-generation’) biofuels – i.e. fuels made from agricultural residues, seaweed and certain waste products – account for at least 2 percent of total energy consumption and that their production be promoted through special incentives. The committee’s recommendation has to be followed by a plenary vote later this year, following which the proposal will be submitted to the EU Council for final approval. If confirmed, the policy shift would negatively affect the EU’s biofuel industry, which relies heavily on food crops, especially edible oils, as feedstock. Industry sources warned that, by applying an arbitrary cap on all food-based biofuels, important differences between individual fuels – in terms of environmental performance – would be ignored, thus exposing the EU’s policy to accusations of discrimination and breaches of WTO rules.