Rhein on Energy and Climate

The dream will have lasted less than a decade!
When oil became increasingly expensive governments and the automobile industry put a bet on biofuels as a safe way for driving without damaging the climate; and farmers across the earth were full of jubilation about the new market for their corn, sugar cane, rapeseed or palm oil.

Last week, the European Parliament has a put a damper on these hopes. With a large majority its Industry Committee has refused to endorse the “10 percent target” that the EU had adopted in 2007 as a major element of its climate strategy. The EU should only decide in 2014, if bio-fuels should supply 10 percent of EU gasoline and diesel consumption in 2020.Whatever that decision, 4 percent should then come from either second generation biofuels (organic waste from woods, straw etc.) or electric/fuel cell engines. And every biofuel will have to generate at least 60 percent C02 savings compared to gasoline or diesel, which is likely to exclude major inputs used in Europe like rapeseed or grains.

This vote reflects the increasing world-wide wariness about the use of food crops for the production of fuels, in particular because of its low energy-efficiency and minimal or even negative impact on C02 emissions.

The European Parliament and the Council of Ministers are therefore likely to follow the Committee ruling.

This decision will have three major consequences:

  • The EU will have to pin its hopes on other forms of reducing C02 emissions, if it wants to implement its basic objective of a 20 percent cut by 2020. That will be difficult but doable.
  • The automobile industry will have to find other means of reducing C02 emissions to 120 g/km. It has stepped up its efforts in that direction. This will be a positive by-effect.
  • The new US Administration will have to review its subsidy schemes for biofuels, if it wants to escape more reprobation by environmentalists across the world.

This being said, biofuels will continue to play a role, as long the oil prices will make them attractive to produce. But governments will no longer subsidise their use and be prudent in imposing mandatory targets. Sugar cane might be the big gainer, as it constitutes the most energy-efficient input. So will be waste from forests, food industry and agriculture.

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  1. And the issue is not only one of energy-efficiency, but also one of food availability, as was reflected by the recent rise of food prices… however controversial this point may be!

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