European Commission puts forward bio fuel plans

Nov 08, 2001 01:00 AM

Alternative fuels made from agricultural products would be a compulsory component of motor fuels in the European Union under proposals unveiled by the European Commission. The proposals would ensure that, from 2005, at least 2 % of fuel used in transport came from bio fuels, made from plants oils, sugar beet, cereals and even domestic waste. The mandatory minimum would rise to 5.75 % by 2010.
The Commission believes a shift towards bio fuels would reduce the EU's growing dependence on oil imports, while generating less of the gases which contribute to the greenhouse effect. It would also offer new options to the Union's struggling farmers. However, the success of the package rests largely on a parallel proposal giving EU governments the option of reducing excise duties on pure or blended bio fuels. This part of the package would require unanimous support from the 15 EU governments.

While bio fuels have the advantage of being domestically made and less environmentally damaging, they remain expensive to produce. The Commission calculates the additional cost of bio diesel over conventional oil-based diesel at about euro 300 ($ 270) per 1,000 litres, with an oil price of $ 25 a barrel.
The proposals, which require the approval of EU governments and the European Parliament, form part of the Commission's target of replacing 20 % of conventional fuels in road transport with alternatives by 2020. The Commission is also aiming to boost research into the long-term feasibility of using natural gas and hydrogen and fuel cell technology in road transport. These are the other two alternative fuels it believes to have significant potential for growth over the next 20 years.

The bio fuels initiative mirrors efforts begun in the US in the 1970s under President Jimmy Carter to make greater use of bio-ethanol, primarily made from maize (corn). Europia, which represents most of the big oil companies in Europe, said the proposals would not make a significant contribution to Europe's energy independence or to the environment, and cautioned against moves to make bio fuel use mandatory. Even environmental groups reacted cautiously to the plans, criticising the Commission for failing to differentiate sufficiently among the different types of bio fuels, some of which they said would bring no environmental benefit.

Source: The Financial Times
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