Draft EU proposals to limit the use of crop-based biofuels are ‘misguided’ and will ‘devastate’ the nascent industry in the UK and Europe, according to the Renewable Energy Association (REA).
The aim of the proposals is to accelerate the uptake of ‘second-generation’ biofuels that do not directly compete with food production by using marginal land, the cellulose and lignin parts of plants or feedstocks such as algae and waste.
However, the REA says it will choke future investment into the industry.
‘We’re asking for something proportionate and phased,’ Clare Wenner, head of transport at REA, told The Engineer. ‘At the moment, the so-called second generation will not come in such a short of time frame.’
The European biofuels sector is estimated to be worth €17bn (£14bn) a year, while a total of around £1bn has been invested in the production of biofuels in the UK.
If implemented, the EU proposals will limit crop biofuels to no more than half of the 10 per cent target for renewable transport with immediate effect; remove all subsidies for crop-based biofuels post 2020; and retrospectively introduce a 60 per cent GHG saving requirement for all new biofuels plant in operation after July 2012.
Most of the biofuel manufactured in the UK is biodiesel from imported soy or used cooking oil, while a number of more advanced bioethanol projects are due to go online soon, including the Vivergo facility near Hull, which aims to produce around three billion litres a year.
‘These guys’ business plans have not been made on the basis of taxes slapped on them and a change in the policy landscape,’ said Wenner. ‘What the investors want is a proven market and a clear policy with longevity… You can’t expect investors who are not investing in the cheaper stuff to suddenly invest in the even more expensive stuff; it’s just not rational.’
According to the REA, UK-produced biofuels have achieved average lifecycle greenhouse gas savings of 69 per cent relative to fossil fuels. Meanwhile, the biofuels sector as a whole is subject to mandatory sustainability standards that are legally enforceable under the EU’s Renewable Energy Directive (RED).
‘The really sad thing is that some of the oil companies, such as BP and Shell, have put their own money into this and we will lose them, so the entire fossil-fuel industry will say “to hell with it; we’ll take it to the US or Brazil” and Europe will lose out.’