EU energy chief against higher biofuel target for now

Tue Feb 7, 2012 10:00am EST

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By Barbara Lewis

BRUSSELS, Feb 7 (Reuters) - The EU's energy chief said on Tuesday for now he was opposed to raising the bloc's 10 percent biofuel target due to environmental concerns and urged the bloc to agree 2030 energy goals within two years.

"During the life of this Commission, we want to be able to reach a conclusion on targets for 2030," Guenther Oettinger said, referring to the current EU executive, whose mandate expires in 2014.

On the biofuel target, he told a conference: "If I had to decide today, I would reject a proposal to go beyond 10 percent (on biofuels). The whole question of sustainability has to be addressed."

The conference debated the EU's 2050 energy road map, which aims to provide guidance for investment beyond an existing set of firm targets which establish policy until 2020.

The European Union has a binding target to raise the share of renewable energy in road transport to 10 percent by the end of the decade, almost all of which is expected to be met by blending biofuels with conventional fuels.

It also has a 2020 target to increase the overall share of renewables in the energy mix to 20 percent and to lower carbon emissions by 20 percent, as well as a non-binding goal to improve energy efficiency by 20 percent.

On the question of whether 2030 targets should be legally binding, Oettinger said that would depend on whether biofuels and other renewable sources were financially competitive with conventional fuels.

"If they can compete, we don't need binding legislation," he said.

Oettinger oversees the European Commission department responsible for implementing the EU's biofuel target, which environmental groups have said could create more problems than it would solve.

The EU executive is grappling with the question of how to regulate the unintended environmental consequences of biofuel production and has repeatedly delayed legislative proposals due last year on indirect land use change (ILUC).

ILUC refers to when biofuels spur the conversion of forests and peatland into farmland, a factor which threatens to undermine the green credentials of some biofuels.

Scientific studies on ILUC prepared for the Commission concluded that biodiesel from EU rapeseed, Asian palm oil and South American soybeans all emit more carbon dioxide than conventional diesel when their indirect emissions are taken into account.

Last month, U.S. regulators said biodiesel from palm oil failed to achieve the required greenhouse gas savings to qualify for a renewable fuels programme.

REGULATORY UNCERTAINTY

EU biodiesel producers, who have halted investment in new production capacity partly because of the regulatory uncertainty, have rejected the findings of the EU studies and argued that the science on ILUC is still too uncertain.

Environmental campaigners argue that the EU's biofuel target does little to mitigate climate-warming emissions from transport and costs European taxpayers an additional 18 billion euros ($23.5 billion) a year, which would be better spent on promoting electric vehicles and public transport.

Another headache for the Commission is the weakness of carbon prices on its Emissions Trading Scheme (ETS), which at around 8.5 euros on Tuesday remain well below levels needed to encourage low carbon investment.

EU Climate Commissioner Connie Hedegaard reiterated on Tuesday that the Commission was looking at ways to support the ETS, but did not give details.

Martin Lidegaard, minister for climate, energy and building in Denmark, current holder of the EU's rotating presidency, said he hoped a meeting of EU environment ministers in March would discuss new milestones on how to reduce carbon emissions beyond the 20 percent goal for 2020.

"We need to give the market some quite strong signals," he told reporters. ($1 = 0.7646 euros) (Additional reporting by Charlie Dunmore; editing by Rex Merrifield and Jason Neely)

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