The EU’s new proposed emissions plan is out, and it’s a good deal for European biofuel producers. The EU is looking to pass laws ensuring that biofuels for transportation emit 35 percent less carbon than fossil fuels. That’s perfect for the European biofuel industry: It already uses mostly rapeseed (that’s canola to you Yankees) oil, which yields carbon reduction levels of about 37 percent. American corn ethanol, by contrast, provides only about a 22-percent carbon reduction.
The EU is also looking to levy punitive tariffs on U.S. biofuels imports (certain U.S. biofuels exporters currently get tax credits from Washington). Back in 2003, the EU itself gave tax breaks to oil companies that bought biofuels to mix with their regular fuels. The emissions plan released today comes as concern grows that unchecked biofuel production can do more environmental damage than good.
One example of unchecked production is the biofuel industry in Southeast Asia, where rain forests have been clear-cut for the production of palm oil biofuel. The EU’s proposed plan would ban the importation of biofuels derived from rain forest plantations that were established after 2003.
Amid all of these biofuel regulations, the EU is seriously looking to up its consumption of biofuels. The Commission now wants a 10 percent share of transport fuels to be biofuels by 2020. This is good news for the European biofuel industry which recently fell on some hard times. And startups pursuing high-efficiency ethanol, either in cellulose, algae, will get a boost from this expansion.