BRUSSELS – 17 October 2012 – The European Commission released today a legislative proposal that would reduce support to conventional biofuels while creating additional incentives for advanced biofuels.

The Commission’s proposal includes amendments to the Renewable Energy and the Fuel Quality Directives, and is now due to be considered by the European Parliament. 

In particular, it is proposed:

• To increase the minimum greenhouse gas saving threshold for new installationsto 60% in order to improve the efficiency of biofuel production processes as well as discouraging further investments in installations with low greenhouse gas performance;
   
• To include indirect land-use change (ILUC) factors in the reporting by fuel suppliers and Member States of greenhouse gas savings of biofuels and bioliquids;
   
• To limit the amount of food-crop-based biofuels and bioliquids that can be counted towards the EU's 10% target for renewable energy in the transport sector by 2020, to the current consumption level, 5%, up to 2020, while maintaining the overall renewable energy and carbon intensity reduction targets;
   
• To provide market incentives for biofuels with no or low indirect land-use change emissions, and in particular the advanced biofuels produced from feedstock that do not create an additional demand for land, including algae, straw, and various types of waste, as they will contribute more towards the 10% renewable energy in transport target of the Renewable Energy Directive.

However, the proposal does not exhaust the options to rationalize EU biofuel policies, which remain a costly way of meeting their stated policy objectives: the creation of “green” jobs, the reduction of GHG emissions and improving energy security. The GSI’s ongoing research on biofuel subsidies stresses the opportunity costs of biofuel subsidies and their unintended effects, such as their potential effects on food prices.

Link to the official press-release of the European Commission.