Socialists, EPP and ALDE propose to cap biofuels shares at 2017 level, end palm oil

MEP Seán Kelly: "This deal, while not perfect, achieves the important EPP objective of protecting existing investments." [Tom Shockey/Flickr]

Lawmakers from three political families of the European Parliament reached on 10 January a compromise to cap the level of crop-based biofuels at the level that each member state reached in 2017 and “kill” palm oil as a transport fuel from 2021, has learnt.

The MEPs from the European People’s Party (EPP), the Socialists and Democrats (S&D) and the Alliance of Liberals and Democrats for Europe (ALDE) groups in the European Parliament submitted an amendment for vote at the Strasbourg plenary session on 17 January.

Sources stressed that the amendment will likely be adopted at the plenary considering that MEPs will follow their party lines.

Particularly, the MEPs agreed on the share of crop-based biofuels in each member state to be capped at the level each country has reached in 2017.

This cap would be continued to 2030 with no decrease or phase-out.

EU heading for ‘zero palm oil’ in transport by 2021

Lawmakers are considering a complete phase out of palm oil in transport fuels by 2021 – a proposal which has garnered support from the biggest political groups in the European Parliament ahead of a key vote next week, EURACTIV can confirm.

On the other hand, the European Commission proposed to reduce the contribution of crop-based biofuels in transport from a maximum of 7% in 2021 to 3.8% in 2030.

In practice after Wednesday’s amendment, if a country had a 5% share of crop-based biofuels (also known as first-generation biofuels) in its energy mix in 2017, the same share will apply as a cap up to 2030; if another country had 4% in 2017, its cap to 2030 will be 4%.

However, for those countries that have a crop-based biofuels’ share of less than 2%, they will be granted flexibility to adjust their cap upwards to 2% in order to meet the 12% renewable energy in transport target.

The purpose of this provision is to avoid being capped at an extremely low level all the way to 2030.

As far as palm oil is concerned, from 2021 will no longer be considered as a renewable energy “leaving more space in the cap for European-produced biofuels”.

Commission's biofuels proposal may kill future investment, industry warns

The biofuels industry has hit out at the European Commission’s proposal to reduce the cap on crop-based biofuels in the EU’s transport fuel mix, saying it would undermine the EU executive’s renewable energy policy and slash investment in advanced biofuels.

Protecting existing investments

The EU executive’s proposal has been heavily criticised by the biofuel industry as well as EU farmers for damaging investors’ confidence due to the constant changing policy recommendations.

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 first-generation 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.

Pekka Pesonen, the secretary-general of Copa-Cogeca, the association of European farmers and agri-cooperatives, has pointed out the need for a stable EU policy framework to support investment.

“The EU biofuels policy is unstable and does not create a favourable climate for the setting up of new biofuel commercial plants,” Pesonen emphasised, referring to investment in advanced biofuels, made from wastes and residues.

EU's biofuels policy damages investor confidence, farmers claim

The European Commission’s “unstable” policy on biofuels has created uncertainty among investors and undermines the market as a whole, the head of the EU farmers’ lobby told

For the centre-right EPP, Wednesday’s amendment will send the markets a message of certainty.

“I am pleased that we have reached an agreement that I feel is acceptable to all parties after hours and hours of hard work over the past few months. This deal, while not perfect, achieves the important EPP objective of protecting existing investments,” Irish MEP Seán Kelly told EURACTIV.

Kelly added that the biofuel sector had enjoyed very little investor certainty recently and this proposed compromise would send an important signal to the industry that “we in the Parliament want to end this period of uncertainty”.

“I hope that in next week’s vote, Parliament will take a pragmatic approach, support this agreed text, and give us a strong position to take into negotiations with Council,” the Irish MEP added.

“Biofuels are crucial for the decarbonisation of the transport sector, we will not replace our whole transport fleet overnight with EVs and so biofuels have a vital role to play in the short to medium term. However, investor certainty is needed. This deal will help to bring certainty right along the biofuels supply chain, from the farmer to the fuel pump,” he concluded.


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