Commission proposals on biofuels will damage Romania’s interests

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Ethanol production has created what has been described as a ‘quiet revolution’ in rural America. [eXtension Farm Energy Community of Practice / Flickr]

The change of EU policy on biofuels will undermine Romania’s potential to become one of Europe’s most important sources of clean renewable fuel, writes Laurențiu Rebega.

Laurențiu Rebega is a Romanian politician and a member of the European Parliament with the Europe of Nations and Freedom Group (ENF).

In 2009, the EU enacted the Renewable Energy Directive (RED). That legislation was intended to promote the use of biofuels as a clean renewable alternative to fossil fuels that would help the EU climate change targets and reduce air pollution that causes tens of thousands of death in EU member states every year.

In addition to the other major advantages, biofuels produced in Europe were seen as a means of creating jobs, particularly in rural areas, and of improving farm incomes. Romania was, and remains, the EU member state that will benefit most from such a policy.

One commercial group that looked at Romania as a potential site for producing bioethanol in 2011-2012 calculated that Romania had the capacity to produce up to 18 billion litres of ethanol annually, a figure which if fully realised would create tens of thousands of jobs and add significantly to the country’s GDP.

If that potential was released Romania could become Europe’s most important sources of clean renewable fuel and Romania’s farming families and rural communities could enjoy the same remarkable prosperity that ethanol production brought to the corn growing areas of the United States over the last 20 years.

In 2005, the US Congress in an effort to reduce greenhouse gas emissions, expand the use of renewable fuels and to reduce oil imports enacted the Renewable Fuel Standard (RFS), legislation very similar to the European Union’s RED.

The RFS set mandatory targets requiring renewable fuel – mainly ethanol in the case of the US – to be blended into transport fuels. The policy has had an extraordinarily positive impact. It has given US consumers access to a lower priced, cleaner burning, less polluting energy for their cars and trucks.

The policy has become a crucial wealth generator for the US rural economy. In 2015 over 210 ethanol plants were in operation in 29 States producing almost 15 billion US gallons of ethanol.  The industry supported over 357,000 jobs and contributed almost $44 billion to US GDP.

It has been particularly successful in supporting the incomes of farm families and has rejuvenated the rural economies of the US states where field corn is grown. In 2015 ethanol production generated over $13 billion in income for US agriculture lead to over $2.4 billion expenditure on construction, mostly in rural areas and has contributed $3.9 billion in state and local government taxes.

Ethanol production has created what has been described as a ‘quiet revolution’ in rural America. Europe’s Renewable Energy Directive (RED) introduced a requirement that EU states ensure that at least 10% of transport fuels should come from renewable sources by 2020.

However, before the RED delivered the benefits in Europe that had been delivered in the US, the European Commission made an absolutely disastrous about-turn in policy.

In 2012, on the basis of a set of arguments, which do not stand scrutiny and many of which have been shown to be false the European Commission reversed its policy on biofuels. Commission bureaucrats proposed cutting the biofuel requirement that had been set only three years earlier by half.

When the 2012 proposals appeared the leader of one of Europe’s most important ethanol producers, Spain’s Abengoa,  predicted that the change in direction that the bureaucrats were pushing would turn Europe’s ethanol industry into a zombie industry. His predictions have proven to be all too accurate.

As predicted the changes have been a disaster. Across Europe ethanol plants have been closed, jobs have been lost, farmers have had an important income stream cut and rural communities, particularly in Central and Eastern EU member states have been denied the opportunity to share in the prosperity that a vibrant ethanol industry has brought to their counterparts in the US.

Oblivious to the damage that it has done already the same Commission bureaucrats who masterminded the 2012 debacle are now planning to go even further. In a policy document circulated on 20 July, the Commission is against all logic and in spite of the best available science, planning to revoke the mandate for conventional biofuels from 2020.

The EU Commission, which is supposed to have jobs as a priority, is planning to end tens of thousands across Europe by closing down a viable industry – an absolutely ludicrous position.

Because of Romania’s huge unrealised capacity to produce ethanol sustainably without triggering any of the concerns that have steered EU bureaucrats off course, it has more to loose from the direction the Commission is taking Europe than any other EU member state.

If the EU were to adopt a positive approach to ethanol on the lines that have been applied in the US-Romania would be a ‘big winner. A progressive EU policy would:

  • Open up investment opportunities in Rural Romania;
  • Create tens of thousands of jobs, one industry source estimates up to 70,000 jobs in this sector;
  • Provide Romanian farmers with a secure income source;
  • Pump billions of euro into the Romanian economy;
  • Make Romania a major source of GMO-free animal feed and cut the EU’s need to import millions of tons of animal foodstuffs;
  • Help the EU as a whole reduce its dependence on imported oil by producing clean renewable ‘Romanian grown’ energy;
  • Help Romania and Europe cut greenhouse gases and meet EU 2020 targets.

The Commission’s approach is based on ideology rather than on logic, ignores the best available science and is an assault on common sense.

At a meeting in the European Parliament, the senior Commission official in charge of the latest proposal reversal admitted to EURACTIV that the change was due to “public opinion” and “citizens’ concerns”.

Commission admits policing biofuels according to public opinion

The European Commission’s proposal for a gradual phase-out of conventional biofuels was based on public opinion, an EU official admitted.

The response failed to mention either the interests or concerns of the thousands of citizens whose jobs will be lost, the thousands of farm families who will be denied income or the member states, like Romania, that will lose out.

Public policy should be formed on the basis of fact, hard science and rigorous analysis and not on the vague ideas conjured up by Brussels bureaucrats.

It is time EU governments including the government of Romania, call a halt to the madcap policy that EU bureaucrats are promoting on biofuels.

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