EU Commission to limit food-based biofuels

In a major policy shift, the European Commission has said it wants to cap food-based biofuels to five percent. The new limit was announced during informal talks in Cyprus on Monday between EU energy ministers, Euronews reports.

Previously, the EU required bio-fuels to rise to 10% of transport fuels by 2020, and bio-fuels made from grains, sugar and vegetable oils were expected to account for the majority of that. The policy change is going to influence the markets strongly. As a first result, it paves the road to advanced bio-fuels made from urban and agricultural waste, non-edible grasses, and other non-food feedstock such as algae. Previously set target to source 10 percent of its road transport fuel from renewable sources by 2020 become hardly feasible. EU bio-fuels makers are critical of the new policy, saying the advanced bio-fuels industry is ill-equipped to handle the increased demand.

The EU’s action stands in contrast with US silence on this issue. Despite a prolonged drought and accompanying spike in food prices, there is no plan to change US ethanol policy, which dedicates about 40% of the US corn crop to produce bio-fuels. US corn prices recently reached record highs of more than $8 per bushel.

As US crop forecasts shrink, ethanol from Brazil will benefit – thanks to two developments that happened on January 1, 2012, that make this more economically feasible. That’s when a tariff of 54 cents per gallon on ethanol imports expired, as did subsidies of 45 cents per gallon given to US blenders. Brazilian ethanol is rushing back into the US because it is the only industry that has the scale to meet the US advanced bio-fuels mandate, reports The Chicago Tribune.

The upcoming EU Commission’s action, if confirmed, will contribute to change the risky scenario of a war between food and non-food agriculture and support the vision of the most innovative players. Just like Tavolo Majella, campaigning on “low disturbing policies” for innovative and sustainable bio-fuels from waste feedstock since 2006 with its ET-Bioenergy© Plan.