Katainen leaves door half-open for conventional bioethanol

Katainen said first generation biofuels "will play a role also in the future because it’s not reasonable to take the business out of the current investment". [EURACTIV]

This article is part of our special report Rural Renaissance.

European Commission Vice-President Jyrki Katainen said he was “ready” to continue the discussion on the EU executive’s proposals on biofuels and see if there is something that “can be refined at a later stage”.

Speaking at an event organised by EURACTIV last week (12 May), European Commission Vice-President Jyrki Katainen highlighted the economic and environmental potential of bio-economy and biotechnologies.

Katainen, who is responsible for Jobs, Growth, Investment and Competitiveness, said that bio-based industries are currently providing around 3 million jobs in the EU and 1 million new jobs are projected to be created especially in rural areas.

The EU official noted that in order to take advantage of this potential, the Commission adopted in December 2015 a Circular Economy Action Plan and as part of the latest Clean Energy Package, the executive has tabled a revised renewable energy directive (RED II).

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“By concentrating on sectors where there will be noticeable effects, the [circular economy] package delivers tangible wins for climate, environment, and competitiveness […] Bioeconomy is one of these sectors,” he stressed, adding that this in practice means more support for bio-based products with proven sustainability.

The RED II proposal

Regarding RED II, the Commission has proposed reducing the contribution of conventional biofuels in transport from a maximum of 7% in 2021 to 3.8% in 2030 [See background].

It 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%.

“We want to boost the use of low carbon and renewable energy in transport – a sector where oil supplies about 94% of all energy used to power European cars, trucks, ships and planes,” Katainen said.

“The proposed gradual reduction of conventional crop-based biofuels and increase of advanced biofuels will promote the development and deployment of innovative advanced renewable fuels,” he noted.

No U-turn

Pekka Pesonen, the secretary-general of Copa-Cogeca, the association of European farmers and agri-cooperatives, recently said that the constant change of direction by the Commission has triggered uncertainty for investors.

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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 EURACTIV.com.

Asked by EURACTIV.com if the Commission’s U-turn in biofuels policy has damaged investor confidence, Katainen replied that the policy orientation has been known since 2014.

“First, I would not call our policy as a U-turn because the previous Commission already indicated in 2014 that the first generation biofuels should not get public support in a later stage.”

“There is only a change in public support for conventional biofuels or food-based biofuels because we want to avoid harmful indirect land use (ILUC) development.

However, Katainen recognised that there were differences between conventional biofuels. “For instance, looking at sugar-based biofuels and the others, and that’s why we allow member states take this difference into account.”

He also admitted that there are some companies which may suffer from the new regulation but at the same time he noted that there would be sufficient time to adjust to this change.

“The first generation biofuels will play a role also in the future because it’s not reasonable to take the business out of the current investment,” Katainen said.

A pragmatic approach

For the Finnish Commissioner, a “pragmatic approach” is needed and if possible, “to differentiate between different resources and use the science-based approach”.

“I can imagine that sometimes an EU regulation is like a hammer, while we would basically need a smaller tool […] but we need a common rule base for advanced and sustainable energy production and also to take into account the entire global market,” Katainen admitted.

“So, let’s continue the discussion if there is something that can be refined at a later stage, at least I am ready to look for these opportunities,” the Commission vice-president insisted.

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EU farmers are “very concerned” about the impact of the European Commission’s change of heart on biofuels, claiming the EU’s restrictive policy is putting thousands of rural jobs at risk.

Not only ethanol

Asked about the impact of RED II on ethanol contribution to EU rural development, Katainen agreed that the bioethanol business could be a big part of revitalising the rural areas.

However, when looking at the bioeconomy as a whole, ethanol is just one piece of it, he said, adding that one should not be blind and only look at ethanol production because there are other sources of renewables.

“It’s not only crop-based ethanol that will make a change. For instance, the forest is a source of biomass and if maintained in a proper and sustainable manner it’s a renewable energy.”

He underlined that new innovations would change the earning logic of rural areas. “We are now focused on the traditional ways but if we know how to make use of bio-waste then we can start looking at growth opportunities,” he said.

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.

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