The European Union is juggling policy priorities ranging from farming to trade as it prepares for a surge in the use of plant-based fuels, a cornerstone of the bloc's ambitious target for fighting climate change. The 27-nation EU agreed in March that biofuels should make up at least 10 percent of vehicle fuels by 2020. That goal, along with stricter rules for fuel quality and carbon emissions from cars, means a huge increase in production and probably imports of fuels such as biodiesel and ethanol. Working out how to hit the target raises a host of questions for EU policy makers.

Should the fuels be homegrown or largely imported? Will they help or hurt the environment in the bloc and outside it? Should tariffs be lowered to facilitate trade? How will energy crops affect food supplies in poor countries? "Our aim must be to develop an EU biofuels policy which meets our objectives on security of supply and climate change, while ensuring sustainable development," European Commission President Jose Manuel Barroso is expected to say at a biofuels conference on Thursday. "What we must not do is pursue a policy which simply shifts environmental problems from one sector to another, or from one continent to another." Brazilian President Luiz Inacio Lula da Silva, whose country is a major biofuels producer, will attend the conference.

Environmentalists are cautiously supportive of the EU's efforts but have zeroed in on the potential for biofuels to create more greenhouse gas emissions than they save. "Sustainable biofuels can be part of the solution, but unsustainable biofuels are even worse for the environment than not producing them," said Frauke Thies, a renewable energy expert at environmental group Greenpeace. "If they lead to deforestation, if they lead to the release of genetically modified organisms into the environment, or if they lead to an increase in emissions compared to conventional fuels, then of course biofuels cannot be a solution."

POLICY TENSIONS, TRADE
Environmentalists fear that lower tariffs would ramp up farming in developing countries that could increase destruction of ecosystems such as rainforests -- particularly in Brazil, and also in major palm oil producers like Indonesia and Malaysia. Key to the EU's chance of hitting its target are new, more energy-efficient second-generation biofuels, technology that is still under development.

As well as detailed discussions on the best way to promote energy efficient fuels use, the EU's executive Commission also needs to study how to balance biofuel production between the EU's own farmers and those in developing countries. Brazilian bioethanol producers face tariffs equivalent to 70 percent of the value of the shipments when exporting to the EU, a level that some in Brussels say may have to be lowered in order to meet the targets for 2020.

But the prospect of a surge in biofuels imports is likely to be opposed by Europe's powerful farming organisations, which have the ear of the EU's agricultural powerhouse France and several other countries. EU farmers see biofuels as a new money-spinner at a time when farm import tariffs and subsidies are generally being cut. European Agriculture Commissioner Mariann Fischer Boel has said the EU would probably need to import between 10 and 30 percent of its biofuel needs by 2020 to meets its target. Some exporters expect to have an even bigger share.

Barroso believes at least some imports will be necessary, even if the EU could meet its goals through domestic production. The EU produced some 3.9 million tonnes of biofuels, made up of bioethanol from cereals and biodiesel from rapeseed, in 2005, a 60 percent increase over 2004, the Commission says.
(By Jeff Mason and William Schomberg, Planet Ark, 05/07/2007)