* Deal fixes 7 percent limit for biofuels from food crops
* Still needs European Parliamentary approval
* New generation biofuels say they need more incentives
By Barbara Lewis
LUXEMBOURG, June 13 EU energy ministers agreed
on Friday to limit production of biofuels made from food crops,
responding to criticism they stoke inflation and do more
environmental harm than good.
The ministers' endorsement of a compromise deal overcomes a
stalemate hit late last year, when European Union governments
failed to agree on a proposed 5 percent cap on the use of
biofuels based on crops such as maize or rapeseed.
Friday's agreement would set a 7 percent limit on food-based
biofuels in transport fuel.
It still needs the approval of the newly-elected European
Parliament, expected to begin considering it later this year.
"We think this proposal is much better than nothing,"
European Energy Commissioner Guenther Oettinger told the
Luxembourg meeting of ministers.
"We need to support research and development in advanced
biofuels so we can move forward from generation one into
generation two and generation three," he added, referring to
more sophisticated biofuels that do not compete with growing
crops for food.
The proposed 7 percent limit is part of a goal to get 10
percent of transport fuel from renewable sources by 2020.
Initially, the European Union backed biofuels to contribute
to efforts to curb greenhouse gas emissions and EU dependence on
imported oil and gas.
Research has since shown that making fuel out of crops such
as maize displaces other crops, forces the clearing of valuable
habitats, and can inflate food prices.
The next generation of advanced biofuels, made from waste or
algae for example, does not raise the same problems, but does
require more investment.
The compromise supported by ministers on Friday includes a
0.5 percent non-binding target for next-generation biofuels,
which environment campaigners say is nowhere near enough to make
The agreement could mean that the overall goal to get 10
percent of transport fuel from renewable sources by 2020 is
missed, analysts say. Currently around 5 percent of EU transport
fuel comes from renewable sources.
Food-based bio-refiners, which have invested on the basis of
the original 10 percent, say a lower target threatens jobs.
And those trying to develop advanced biofuels say they are
not been given sufficient incentive.
Manuel Sanchez Ortega, CEO of Spanish renewable and
engineering firm Abengoa SA told Reuters by telephone
the deal was positive in that it reduced uncertainty, but Europe
was in danger of being left behind.
"In the United States there has been a revolution (in
second-generation ethanol)," he said. "To us it seems that
Europe is acting timidly."
Thomas Nagy, executive vice-president of Novozymes
, which makes enzymes used in the production of
advanced biofuels, said Friday's decision enabled "a reboot of
the decision-making process".
However, he also said there was an "absence of incentives to
allow the conventional biofuel industry to develop sustainably".
He urged the European Parliament to propose amendments when it
resumes debate of the draft law.
(Additional reporting by Sybille de la Hamaide in Paris and
Jose Elias Rodriguez in Madrid; editing by James Macharia and