Mandelson stokes up biofuels row

European trade and agriculture interests are set to clash over the best way to increase the use of plant-based fuels for transport.

EU leaders agreed in March to a 10% market share for biofuels by 2020, as part of efforts to reduce greenhouse gas emissions. But since then the trade and agriculture departments of the European Commission have set out very different ways of meeting the target. A proposal for legislation to support the March agreement is due from the Commission in December.

An agriculture department study last week estimated that the 10% target could be met by importing just 20% of biofuel resources, to top up crops grown by EU farmers. This would mean using 17.5 million hectares (15%) of European farmland for biofuel production, about 5 million hectares of which could come from ‘set aside’ land, which cannot be used for food crops.

"The 10% scenario does not overly stretch the land availability," says the report, "nor does it lead to a significant increase of intensities of production."

Most of the arable land used in this scenario would go to the production of bio-ethanol. Most current biofuel production in the EU is devoted to biodiesel, with the EU producing three-quarters of global biodiesel.

The agriculture scenario also assumes that by 2020 30% of biofuels will be more environmentally friendly and resource efficient ‘second generation’ varieties, which are not yet on the market.

But Peter Mandelson, the European trade commissioner, argues that the 10% biofuel target can be attained only by importing large amounts of bioethanol resources from outside the EU. His comments have been widely interpreted as meaning that Europe will need to import sugarcane ethanol from Brazil, the world’s leading ethanol producer.

"The issue is an environmental one," said a spokesman for Mandelson. "The benchmark should be biofuels with a low environmental impact."

There is disagreement over whether vegetable oil-based biodiesel or sugar-based bioethanol is better for the environment. Some studies show that biodiesel can produce the greatest greenhouse gas emission reductions per litre, while bioethanol is more productive per hectare of cropland.

"We are very much in the first stages of biofuel production and a lot could change," he said. "But if you look at output in terms of land use, water use, or carbon dioxide output, then Brazilian sugarcane produces by far the most environmentally friendly and resource-efficient biofuel."

Third country ethanol exports currently face a tariff if they are imported to the EU market. Brazilian President Luiz Inacio Lula da Silva has called for the tariff to be scrapped for the benefit of poor Brazilian farmers, and is now working to develop international sustainability criteria for biofuel exports.

Mandelson has not explicitly declared support for an end to the tariffs, said his spokesman, but the issue is being discussed in the Doha trade talks and negotiations for economic partnership agreements, both of which are scheduled to finish this year.

"We will need to see what comes out of that," said the spokesman, "In Mandelson’s argument there is the implication that tariffs need to support environmental credentials."

But eBio, the European bioethanol fuel association, says import tariffs are needed to encourage investment in clean and efficient European bioethanol. Rob Vierhout of eBio welcomed the agriculture department report on EU biofuel production, saying it "clearly demonstrates that there is no reason for concern regarding crop availability or substantial price increases".

EU farmers say that Mandelson is ignoring the destruction of rainforests and savannahs in Brazil to make way for biofuel crops.

"Of course we are not talking about a closed market with no biofuel imports," said Dominique Dejonckheere of EU agriculture representatives Copa-Cogeca. "But to ensure better fuel independence, preference should be given to European production."

European trade and agriculture interests are set to clash over the best way to increase the use of plant-based fuels for transport.