Wednesday, April 30, 2008

New EU biofuel production standards?

EU eyes stricter standards for biofuel imports

By Andrew Bounds in Brussels

Published: April 27 2008 22:05 | Last updated: April 27 2008 22:05

US-produced biofuels could in effect be shut out of Europe under plans
being discussed in Brussels.

Anxious to distance itself from charges that its push for biofuels is
creating hunger round the world, the European Union is considering
stringent social and environmental criteria for imports that the US
and some other big biofuel producers would not meet.
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The sustainability criteria under discussion would in effect bypass
World Trade Organisation rules forbidding biofuel bans. By excluding
those products not meeting the criteria from its biofuels target of a
10 per cent contribution to the fuel mix by 2010, the EU would deprive
those products of government support, removing incentives to import

One option under discussion is to exclude imports from countries that
have not ratified a range of international agreements on labour and
environmental standards, including the Kyoto protocol on global

Documents seen by the Financial Times state that exporters would have
to abide by at least 10 of 12 treaties, from International Labour
Organisation accords on equal pay, child labour and the right of
workers to organise, to the United Nations Convention on Biological
Diversity. The US, wary of labour market restrictions, has ratified
few of these. Malaysia, a big palm oil producer, would also fall
short, according to ILO data.

A second option would require producers to prove that they had
complied with national laws enforcing ILO standards, that pesticide
use was limited and that the local population had been consulted about
biofuel plantations. Diplomats from EU member states have been unable
to agree on how tough the criteria should be.

"There is a wide consensus among the member states to include
environmental and social criteria for the production of biofuels
regardless of their origin; however, how to implement these principles
is still being debated," said a spokesman for Slovenia, which is
chairing the talks.

Countries including the UK and Belgium have expressed doubts about
whether the EU should stick with its biofuel targets. Environment
commissioner Stavros Dimas and development commissioner Louis Michel
are also questioning them.

A spokesman for José Manuel Barroso, European Commission president,
said he still backed the target. However, he had asked staff for
updated data on biofuels' effect of on food prices.

The Commission last year estimated that about 15 per cent of EU
farmland would be used to grow energy crops by 2020, with about 20 per
cent of demand – about 14m tonnes – met by imports.

Separately, the EU and US face a trade spat after EU biodiesel
producers on Friday asked the Commission to investigate subsidised US
imports they said were driving them out of business. US producers can
receive $300 per tonne if they add a "drop" of mineral diesel to
biodiesel, the European Biodiesel Board said. "Such a blend can then
be exported to Europe where it is also eligible for European subsidy
schemes," it said in a statement.

Copyright The Financial Times Limited 2008

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