EU panel lowers biofuels goal, protects industry

By Pete Harrison

BRUSSELS (Reuters) - European Union lawmakers voted on Thursday to lower a key target for using biofuels made from crops in petrol and diesel fuel, responding to fears they do more harm than good in the fight against climate change.

The European Parliament's influential industry committee also approved measures to protect heavy industries such as steel and chemicals from the risk that having to buy carbon emissions permits would make them less competitive than overseas rivals.

The move on biofuels could curb the growth of a market coveted by exporters such as Brazil, Malaysia and Indonesia, as well as European farming nations.

"Parliament puts at risk over 5 billion euros ($7 billion) invested in EU biofuel production capacity and all the employment linked to it," said the European Bioethanol Fuel Association, a body representing biofuel producers.

The executive European Commission has proposed that 10 percent of all road transport fuel come from renewable sources by 2020, without specifying how much of that should be derived from biofuels, renewable electricity or hydrogen.

Environmentalists charge that biofuels made from grains and oil seeds contribute to rising food prices and deforestation.

"Using crops to feed cars... could lead to irreversible loss of wildlife and misery for millions of people in the south," said Friends of the Earth campaigner Adrian Bebb.

The committee endorsed the EU's overall 10 percent target by volume but voted that at least 4 percent should come from electricity or hydrogen from renewable sources, as well as from second-generation biofuels from waste.

That would leave just 6 percent coming from traditional biofuels made from grains and other food stocks.

BITTER PILL

"Maintaining a binding target for biofuels is a bitter pill to swallow, but the committee has at least strengthened the safeguards against the damaging impact of agri-fuels in this directive," said Luxembourg Green deputy Claude Turmes, who is steering the legislation through parliament.

The committee's decision will likely serve as parliament's position in negotiations with the 27 EU member states later this year or in early 2009 on the final shape of the law.

The panel approved a mid-term goal of 5 percent of road transport fuel from renewable sources by 2015, of which a fifth should be from alternatives to biofuels from food crops.

"That mid-term target could be difficult," said Simo Honkanen of Neste Oil's renewable fuels division. "Biofuels from wood waste will come, but it will take years."

The panel stipulated that biofuels must achieve a reduction of 45 percent in carbon dioxide emissions compared to fossil fuels, rising to 60 percent in 2015 -- levels much more ambitious than those being mulled by EU member states.