Hungary says bioethanol phase-out will damage its agricultural economy

Budapest makes it clear it is supportive of the so-called advanced biofuels but this should not come at the expense of the first-generation ones. [Sarantis Michalopoulos]

The European Commission’s proposal to gradually phase-out first generation biofuels by 2030 will have a “major” negative impact on Hungary’s rural development, the ministry of agriculture told EURACTIV.com.

Budapest is also supportive of so-called advanced or second generation biofuels, made from wastes and residues, but this should not come at the expense of crop-based first generation biofuels.

In a written reply to EURACTIV, Hungary’s ministry of agriculture said that the country was one of the EU’s largest exporters of bioethanol and, therefore, the adoption of the first version of the draft directive would cause “major losses to Hungary’s agricultural economy”.

According to the ministry, farmers will be unable to sell the raw materials they produce, the majority of which are purchased by the biofuel processing industry, parallel to which export revenues would also be significantly reduced.

“Hungary produces excellent quality GMO-free protein feeds using the by-products of these raw materials, which are cultivated in large quantities, and this sector of agriculture would also suffer a disadvantage,” the ministry emphasised, adding that the impact on agricultural areas as a whole should be not neglected.

“The processing industry has a positive effect on rural development and in retaining the local, trained workforce, and accordingly it is in our interests to further increase this well-functioning and suitably-developed market rather than reduce it.”

The European Commission’s proposed Renewable Energy Directive II reduces the cap on the contribution of conventional biofuels to transport fuel from a maximum of 7% in 2021 to 3.8% in 2030. It also sets an obligation to raise the share of other “low emissions fuels” such as renewable electricity and advanced biofuels in transport to 6.8% [See background].

The Visegrád group (Hungary, Slovakia, the Czech Republic and Poland) together with Romania and Bulgaria recently signed a joint declaration criticising the Commission’s proposal.

The six member states pointed out the importance of biofuel production to rural development and emphasised that the current level of renewable energy sources of agricultural origin “should be maintained or if possible increased after 2020”.

Visegrad and Balkans hit out at Commission over biofuels phase-out proposal

The Visegrad and three Balkan countries signed a joint declaration urging the European Commission to reconsider its proposal to gradually phase-out the first generation biofuels after 2020 and think about the consequences.

The biofuels industry has also reacted strongly, blaming the Commission for “unfounded science”, while several NGOs believe the EU executive is moving in the right direction and urge it to go further and impose a full ban.

Advanced biofuels

Hungary’s ministry of agriculture pointed out that it was not against the development of second-generation or advanced biofuels and the gradual increase of their role.

“But it does not support the idea that this should be realised at the expense of traditional biofuels,” the ministry noted.

“Hungary is standing up for promoting the production of traditional biofuels and for regulations that set out the mandatory stipulation of their mixing ratios (at a higher level).”

Background

The first Renewable Energy Directive set a target of 10% of renewable energy sources in the transport sector, including first generation biofuels made from food crops.

But this directive was amended in 2015 and the contribution of conventional biofuels from October 2017 will be limited to 7% of energy consumption in land transport, a figure that will be lowered to 3.8% in 2030 under the latest Commission proposals.

At the same time, the EU executive also set an obligation to raise the share of other ‘low emissions fuels’ such as renewable electricity and advanced biofuels in transport to 6.8% by 2030.

Phasing-out biofuels: What’s really at stake?

The European Commission's proposal to limit the use of biofuels in transport has drawn heated reactions from farmers who have warned about the effects on jobs and the economy.

Timeline

  • January 2018: Vote in the European Parliament plenary is expected

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