EU eyes imports to quench biofuels thirst
Europe must open its doors to imports of biofuels from developing countries in order to reduce its oil dependency and cut carbon emissions, said EU leaders at a high-level conference in Brussels attended by Brazilian President Luis Inacio 'Lula' da Silva.
Europe will fail to meet its objective to increase the share of biofuels to 10% of overall transport fuel consumption without a major rise in imports from countries like Brazil, warned EU Trade Commissioner Peter Mandelson at an international conference organised by the Commission on 5 July.
The conference was attended by Brazilian President Lula Da Silva and followed hard on the heels of the first ever EU-Brazil summit, held one day before (EurActiv 5/07/07).
"Europe should be open to accepting that we will import a large part of our biofuel resources," said Mandelson, adding: "We should certainly not contemplate favouring EU production of biofuels with a weak carbon performance if we can import cheaper, cleaner, biofuels. Resource nationalism doesn't serve us particularly well in other areas of energy policy - biofuels are no different."
Currently, biofuel such as ethanol are classified as agricultural goods and enjoy relatively high tariff protection in Europe in order to support the development of the biofuel market and protect European farmers against foreign competition.
However, since there is not enough European land available to produce sufficient amounts of fuel and feed, the EU will have to further open up its doors to imports from third countries, said a number of EU Commissioners speaking at the conference. In the Commission's view, this can be achieved either by means of a multilateral agreement, at the World Trade Organisation, or through bilateral deals, such as the new strategic partnership launched with Brazil on 4 July.
Commission President José Manuel Barroso and Brazilian President Lula Da Silva underlined that further market opening in Europe would also benefit developing countries – currently the main producers of biofuel crops, such as sugar cane and corn.
However, the move could face opposition from some EU members such as France, which are strongly resisting calls from developing countries and the US, to slash EU farm tariffs in order to achieve a deal in global trade talks at the WTO.
As part of Europe’s strategy for reducing oil dependency and fighting climate change, EU leaders committed, at the March 2007 European Council, to a binding minimum target for each member state to achieve at least 10% of their transport fuel consumption from biofuels.
Transport is responsible for around one third of all carbon dioxide emissions in the EU with road vehicles relying almost entirely on oil as a primary energy source.
The EU sees biofuels – considered to be “carbon neutral” – as the only viable green alternative to oil. However, a number of doubts have been raised about the benefits of biofuels, with studies showing that some biofuels actually generate more greenhouse gases than conventional fuels if one includes the total emissions from agriculture, transport and processing involved in their production.
Furthermore, many are worried that an increase in biofuels production will lead to biodiversity loss and food shortages, especially in developing countries, considering the vast tracts of land that would be required to replace petrol to any significant degree.
Trade Commissioner Peter Mandelson said he was confident that developing countries would eventually gain from expanding their biofuels production: "Many developing countries have spare agricultural capacity and a genuine comparative advantage in production. They also have the climate and land profile that suits energy-rich biofuels," he told the conference.
But he also stressed that the development of such a market "must be tempered by environmental reality."
"Europeans won't pay a premium for biofuels if the ethanol in their car is produced unsustainably by systematically burning fields after harvests or if it comes at the expense of rainforests. We can't allow the switch to biofuels to become an environmentally unsustainable stampede in the developing world."
Energy Commissioner Andris Piebalgs said: "We could – if we had to – fulfil our 10% target for 2020 entirely through domestically produced biofuels – notably, by using 'set-aside' agricultural land and by reducing the rate at which arable land is being abandoned in the EU. However, even if this approach is technically possible, it is not the one that we want to follow. We think that this purely domestic sourcing of biofuels is neither likely – given current trade rules, and the increased trade liberalisation we hope to see in future – nor desirable."
He concluded: "We need to ensure that our biofuel standards create no unnecessary obstacles."
Commission President José Manuel Barroso said that the new biofuels market "should not only serve the interests of the car-owning rich, but also the interests of the world's poorer nations", adding: "It is true that as the price of staple foods increases, there is a potential impact on food security for the world's poor. But this should be offset by the benefits of improving terms of agricultural trade, which provide developing countries with an opportunity to produce more."
Swedish Minister for Trade Sten Tolgfors commented that Brazilian ethanol was still met with tariffs of up to 55% while the tariff on petrol is as low as 5%. "Why is Europe making ethanol so much more expensive than petrol?" he asked, calling for a full elimination of tariffs on biofuels.
Brazilian President Lula Da Silva pointed out that, in his country, more than six million jobs have been created thanks to the development of a strong biofuels market. Furthermore, he underlined that: "This is not a choice between food and energy," adding that, in Brazil, "the planting of sugar cane did not force out or reduce the production of food." Instead, he said, the increase in sugar cane production has been accompanied by an increase in income. "We can repeat these results in many poor and developing countries" he said.
However, he stressed that, in order for the development of biofuels to become viable for many developing countries, rich countries would first have to put an end to their agricultural subsidies and reduce tariffs. "You must give a chance to those who didn’t have a chance in the 20th century," he concluded amid thunders of applause.
European farm leaders however rejected the idea that the EU should open itself to imports of cheap biofuels on the basis of environmental considerations. "Mandelson must get his facts right on biofuels," said EU farm lobby Copa-Cogeca Secretary General Pekka Pesonen, accusing the Commissioner of closing his eyes to economic realities in developing countries.
"The international cost advantage of, for example, Brazilian production is based firmly on cheap land, won by destruction of rainforests and pristine savannahs, and exploitation of workers even to the point of using slave labour," he stressed, adding: "Mandelson must understand that biofuels policy is also about promoting EU energy independence. No one says that the EU should seal itself from imports. But rejecting out of hand, as Mandelson does, the contribution European farmers can make to meeting the EU’s energy needs in a sustainable way, is something to be expected from a Brazilian minister for exports for example, not the EU’s Trade Commissioner", the Secretary General concluded.
Green NGO Friends of the Earth Europe said that the EU’s commitment to replace 10% of its transport fuel market with biofuels by 2020 was "dangerous" for biodiversity in developing countries and demanded it to be dropped. Citing Indonesia, the world’s largest producer of palm oil – a product used to make biofuels – as an example, Rully Syumanda, Forest Campaigner at Friends of the Earth Indonesia said: "Europe's growing demand for palm oil is leading to environmental and social devastation here in Indonesia."
- 5-6 July 2007: International Conference on Biofuels