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Frets About Biodiesel

11:37AM Sep 05, 2008

Europe's biodiesel producers, accustomed to booming demand and acclaim for reducing oil usage, face a less enthusiastic audience these days. Rather than gathering applause, they're increasingly a target for consumers concerned about food prices, and for environmental activists.

"The debate in Europe is really, really tough," says Amandine Lacourt, European Biodiesel Board (EBB) project manager. Lacourt explained Europe's biodiesel conundrum during a Brussels, Belgium, meeting with U.S. farmers on Top Producer's recent Frontier Study Tour.

With 55% of Europe's vehicles running on diesel, diesel demand is now at 200 million tons a year, up from about 150 million tons in 2000. Europe produced almost 5.71 million tons of biodiesel in 2007, a bump of nearly 17% from the year before. That production increase lagged behind the 54% logged in 2006 and 65% in 2005. Europe can produce 16 million tons of biodiesel, but as much as 3 million tons of capacity sit idle.

The European Union (EU) set a biofuels target of 10% by 2020. EBB's 66 member organizations hoped biodiesel would fill 10% of the market by 2010 and 15% by 2015. Lacourt says that goal is now in question.

Food vs. fuel. Recent debates pressure the industry, with biofuels becoming the scapegoat. "We know high food prices are linked with oil, but many people argue the biofuels industry is linked with food price increases. That is incorrect, of course, but combating that perception is difficult," Lacourt says. She believes the EU will now develop a new legislative framework for biofuels.

"That will be major and will impact us tremendously. Many groups want to lower the 10% mandatory level. They're also calling for a revision of the fuel quality directive designed for a 1% reduction of greenhouse gases starting in 2010," she says.

"The problem is that EU biofuels policy was designed in 2000 when oil was $20/barrel; now it's over $120. It will be an interesting debate. If the 10% target is questioned or dropped, it will be very bad," she says.

"In this debate, sustainability is already an issue. If you want to be eligible for tax incentives, you would have to meet certain sustainability criteria," Lacourt says. "Let's apply sustainability to all biomass, all food and feed. Let's look at the big picture and not only concentrate on biofuels. Everything is interrelated."

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Top Producer, September 2008