Ethanol at the EC

Cindy Zimmerman

Leaders of the biofuels industry in both Europe and the United States are calling on the Organization for Economic Cooperation and Development (OECD) to disavow a paper issued last week critical of world ethanol production.

Michael MannEurope is well behind the United States in biofuels production and use, but the European Commission is moving ahead with its plans to have biofuels make up ten percent of transport fuels by the year 2020, according to the Commission’s spokesman for agriculture and rural development Michael Mann who says this is a fairly modest. “We’ve also set that some of that will have to come from imports and we will also favor in the long term second generation biofuels,” Mann told ag journalists in Brussels last week on a trip sponsored by BASF Ag Products. “We don’t want too much of our agricultural land to be diverted away from food and feed production. So, its a balance between the importance of biofuels for environmental reasons and to lower our reliance on imported oil, but at the same time not upsetting our food and commodity markets too much.”

European Commission According to Mann, the EU has incentives for rural development of biofuels refineries in place, which are actually grants. “Developing biofuels plants is something you can receive a grant for from rural development funding.” In addition, there is a tariff in place for ethanol imports to the EU and there are incentive payments for farmers to produce crops for biofuels production which was introduced in 2003. “If you have a contract with a biofuel producer to produce the raw materials for biofuel, you can get an extra 45 euros per hectare on that land.”

Mann says they are reconsidering that incentive, in light of the OECD criticism of biofuels subsidies and also because there is now a market because the target is in place.

Listen to Mann’s remarks about biofuels in the EU here (5:50 MP3 File): [audio:]

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