Europe is carrying out a fundamental review of its energy policy, which will be the subject of a “Green Paper” in spring 2006 with three main objectives in mind: competitiveness, sustainability and security of supply.

It is in this wider context of an integrated and coherent energy policy and, in particular, of the promotion of renewable energy sources that the Commission is presenting this action plan. It is just one component of the measures needed to achieve the objectives set out above—but an important one, since biomass presently accounts for about half of the renewable energy used in the EU.

Each of the three areas—transport, power generation and heating/cooling—offer different benefits from the use of biomass fuels, according to the plan:

• Within transportation, biofuels are one of only two measures that has a reasonable chance of reducing greenhouse gas emissions on a significant scale in the near future. (The other is the mandated reduction of CO₂ from new cars.) Although costly, transport biofuels have the highest intensity of use and the greatest security of supply benefits.

• Biomass in electricity has the greatest greenhouse gas benefits.

• Biomass in heating is cheapest.

Currently, the EU meets about 4% of its energy requirements from biomass. The union had already adopted targets for increasing the use of biofuels for transport to 2% this year and to 5.75% by 2010, but the objectives will not be met. Were all Member States to achieve the targets they have set, biofuels will attain a share of only 1.4%. The commission now plans to adopt a new position on the implementation of the biofuels directive in 2006.

The new action plan describes six major areas of activities to be undertaken to drive the use of biofuels in transport:

1. Implementation of the biofuels directive. The primary mechanism for implementing the biofuels transport directive has been fuel tax exemptions, but, according to the plan, “a number of practical problems have arisen.” The Member States are now turning to biofuel obligations—mandating the incorporation of a specified percentage of biofuels in fuels on the market.

   The Commission also intends to encourage Member States to give favorable treatment to “second-generation” biofuels in biofuels obligations. Second-generation biofuels encompasses biofuels produced from biomass or waste—cellulosic ethanol, for example, or Biomass-to-Liquid diesel substitutes produced via the Fischer-Tropsch process.

   The new stance on a biofuels directive in 2006 will revisit the national targets, address the issue of biofuels obligations, and require that only biofuels whose cultivation complies with minimum sustainability standards will count toward the targets.

2. The vehicle market. The Commission will propose legislation to encourage the public to buy clean vehicles, which could include those using high biofuel blends. The Commission will also devise a policy to factor in the use of biofuels, along with other elements, in the calculation of CO₂ emissions from new cars. This future strategy of accounting based on an “integrated approach” will ease some of the technical burden from automakers, who are now faced with a coming target of an average 120 g/km CO₂.

3. Balancing domestic production and imports. For production and trade issues, the Commission plans to:

   • Propose the amendment of standard EN14214 to facilitate the use of a wider range of vegetable oils for biodiesel, to the extent feasible without significant ill-effects on fuel performance;

   • Address the issue of amending the biofuels directive so that only biofuels whose cultivation complies with minimum sustainability standards count towards its targets;

   • Maintain market access conditions for imported bioethanol that are no less favorable than those provided by the trade agreements currently in force;

   • Pursue a balanced approach in ongoing free trade agreement negotiations with ethanol-producing countries/regions. The EU must respect the interests of domestic producers and EU trading partners, within the context of rising demand for biofuels.

   • Support developing countries that wish to produce biofuels and develop their domestic markets. This is of particular importance in the context of the sugar reforms.

4. Standards. Existing European fuel quality standards establish limits on the content of ethanol, ether and other oxygenates in gasoline, and limits the vapor pressure. Standard EN590 limits the use of biodiesel in a blend to no more than 5% by volume (4.6% in energy terms). The Commission is reviewing all those directives with an eye to increasing allowed biofuel use, while keeping other factors such as cost and benefit in mind.

5. Removal of technical barriers. The Commission is also asking the fuel transport and distribution industries to explain the technical justification for barrier to the introduction of biofuels, such as the banning of ethanol-blended gasoline in an oil pipeline.

6. Use of ethanol to reduce demand for diesel. Finally, the Commission will encourage the use of ethanol in diesel blends (e-diesel). Europe has greater capacity to produce bioethanol than biodiesel, using less land and with more room to reduce costs through economies of scale. There is also scope for increased imports of ethanol from third countries.

Resources:

• Biomass Action Plan