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EU limits use of biofuels

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Janet S. Carter/The Free Press/AP/File

(Read caption) Corn kernels peer out from the husk on an ear of corn in this August 2012 file photo. Biofuel, which the European Union plans to limit, is made from the stalks and leaves of corn.

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The European Union announced a major change in its biofuel policy earlier this week, making clear that new laws aimed at limiting crop-based biofuels to only 5 percent of transport fuel used in the region will soon be introduced, putting the biofuel industry itself in peril.

The decision is being made in order to allow room for so-called “advanced biofuels,” a source of energy made from waste products that the EU hopes will take the lead in the industry. This would allow more crops, such as grains and sugar, to be used to feed the world’s population, a cause that has been championed by groups influential enough to paint a negative public image of the biofuel industry at large. (See also: Are You Looking to Invest in the Google of Biofuels?)

Despite this hope, industry analysts are adamant that Europe’s biofuel sector will take a hit that it cannot recover from, predicting near-immediate closures of biofuel plants throughout the EU that will lead to thousands of lost jobs. With the industry itself heavily invested in meeting the current energy target dictated by previous EU policy — 10 percent biofuel as transport fuel by the year 2020 — the potential economic impact is severe. (See also: Five Challenges of Next-Generation Biofuels)

“It’s a big U-turn in EU policy,” said Jean-Philippe Puig, chief executive of French oilseed group Sofiproteol, the parent company of the EU’s largest biodiesel producer. “We have made lots of investment in order to meet the 10 percent target in 2020, including more than 1 billion euros in biodiesel plants in France.”

Because the European Union government body behind the proposal will need to have the policy change approved by governments and the European Parliment before it can be implemented as law, the process itself is expected to take up to two years to complete. Given that both sides of the debate are heavily invested in the outcome, with both humanitarian concern and bank accounts on the line, lively campaigning from all involved is to be expected as the issue plays out.

Source: Industry in Peril as EU Limits Use of Food-Based Biofuels

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