EU eyes lower biofuel goal

A woman holds a funnel as she waits to refill the fuel tank of an eco-friendly car that took part in a ''Grease to Greece'' rally from London to Athens August 27, 2008.

BRUSSELS (Reuters) - European Union lawmakers have proposed cutting a target for using traditional biofuels to 6 percent of road transport fuel by 2020, while Malaysia's commodities minister warned the current plan is discriminatory.

The EU executive Commission earlier this year proposed that 10 percent of all road transport fuel should come from renewable sources, without specifying how much of that should be biofuels or vehicles powered by renewable electricity or hydrogen.

If agreed in a vote on Thursday by the European Parliament's influential industry committee, the tweaks would formally include electric and hydrogen-powered cars within the 2020 road transport target.

"At least 40 percent of this (10 percent) target shall be met from electricity or hydrogen from renewable sources," said a draft document seen by Reuters.

The proposal backed by three major voting groups also listed other alternative options including energy produced from waste, from biomass such as woodchips, or from algae produced in vats.

The EU's original 10 percent target has been attacked by environmentalists, who say traditional "first generation biofuels" produced from grains and oil seeds contribute to rising food prices and deforestation.

"Crops should be used to feed people and not fuel cars," said Adrian Bebb of Friends of the Earth Europe. "The promotion of biofuels in Europe will increase food prices and force millions of people in developing countries into poverty."

The EU has responded with tough standards to ensure its thirst for biofuels does not cause unnecessary damage.

DISCRIMINATION

But Malaysia's commodities minister Peter Chin told Reuters on Wednesday those criteria had been poorly thought out, in particular the EU's assumption that most palm oil plantations led to deforestation.

Many were planted on agricultural land that had been cleared of trees decades ago and had now become unproductive, or on old coconut of rubber plantations, he said.

"We could ask what happened to the forests of Europe," he said. "Those fields of rape seed must once have been forest."

The proposed EU standards also demand that biofuels must reduce greenhouse gas emissions by at least 35 percent compared with petrol or diesel, together with an assumption that palm oil would only reach 32 percent and therefore miss the target.

Malaysia argues the EU proposals are biased and that its palm oil can achieve CO2 reductions of around 60 percent.

"All we want is fairness based on science," said Chin.

The committee decision voted on Thursday will likely serve as a proxy for the EU Parliament's position during talks between the parliament and the 27 EU member states ahead of a full parliament vote in October.

The committee vote has become more crucial than usual because France, which holds the EU's rotating presidency, is aiming for a quick turnaround on environment legislation.

Paris wants to go to international climate talks in Poznan, Poland in December with proof that it is serious about battling climate change and has passed laws to do so.

Chin said the EU proposals were currently not compatible with World Trade Organization rules in their current form.

"The EU is now trying to put in place legislation that has elements of discrimination that are counter to the principles of the WTO, which promotes fair trade," he said.

But he felt confident there would be no need for a complaint to the WTO as there is still time to amend the legislation.

(Reporting by Pete Harrison; Writing by Gerard Wynn; Editing by Peter Blackburn)