* Final agreement unlikely before 2015
* OPEC, Russia the only winners from delay - Oettinger
* Member states divided for different reasons
By Barbara Lewis
BRUSSELS, Dec 12 EU energy ministers on Thursday
failed to agree on a compromise deal to limit the use of
transport fuels made from food crops, which critics say pushes
up food prices and can do more harm than good to the
The European Union's Energy Commissioner Guenther Oettinger
said the delay would damage its efforts to reduce dependence on
gas and oil imported from such sources as the Organization of
the Petroleum Exporting Countries and would hurt its drive to
curb greenhouse gas emissions.
"If we delay and postpone, the winners will be OPEC and
Russia," he said.
Last year, in response to warnings about food price
inflation and unintended consequences on the environment, the
European Commission, the EU's executive, proposed to cap the
bloc's use of biofuels based on crops such as maize or rapeseeed
at 5 percent.
That compares with an existing goal to get 10 percent of
transport fuel from renewable sources by 2020, an amount that
would be almost entirely derived from food-based fuels.
Lawmakers in the European Parliament backed a slightly
higher cap than the Commission proposed of 6 percent, stirring
opposition from the biofuels industry.
The industry has invested on the basis of the original 10
percent goal and accuses the Commission of a U-turn that it says
will force plant closures and cost jobs.
EU energy ministers debated a new compromise of 7 percent
put forward by Lithuania, holder of the EU presidency.
Member states were deeply divided. Some, such as Poland and
Hungary, argued a 7 percent cap was too low, while Denmark and
Belgium, for instance, said it was too high.
Others said a compromise deal should be accepted on
"There are some good victories for the environment compared
to the current directive," said Ed Davey, Britain's energy and
climate change secretary.
Danish Minister for Climate, Energy and Buildings Martin
Lidegaard wanted more. He called for a sub-target to spur new
generation biofuels made from algae and waste, a cap of 5
percent on crop-based fuels in line with the Commission
proposal, and accounting of factors such as indirect land use
change (ILUC) as soon as there was "a solid, scientific basis".
ILUC refers to the displacement effect biofuels can cause as
land is cleared for extra food crops to produce them, sometimes
negating the aim of curbing emissions because it destroys trees
and peatland that serve as carbon sinks.
Representatives of Germany's biodiesel industry - Europe's
largest - welcomed the deadlock, saying it allowed more time to
find a more effective approach.
"The compromise did not contain suitable rules which would
stop tropical rain forests being cut down," said Elmar Baumann,
CEO of German biofuels industry association VDB.
"But it would have heavily damaged Europe's biofuels
industry and its farming."
Anti-biofuel campaigners were also relieved the compromise
was not adopted, but said the status quo was worse.
"The EU needs to move fast and start listening to the
consensus, which is that using food for fuel is an outdated and
bizarre policy that needs to stop now," said Laura Sullivan of
anti-poverty group ActionAid.
Greece, which takes over the EU presidency in January, will
take up the biofuels dossier. However, the changeover of EU
institutions next year, with parliamentary elections in May and
the expiry of the current Commission in October, means a final
deal is unlikely before 2015.
While energy and biofuel firms oppose a lower limit on first
generation biofuel, food companies are strong supporters.
"The proposed 5 percent cap by the European Commission would
have been a significant step towards phasing out the use of food
for fuel," said a letter, seen by Reuters, to the 28 EU energy
ministers from Paul Polman, chief executive officer of Unilever
plc, and Peter Brabeck-Letmathe, chairman of the board
at Nestle S.A..