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Date
 15/02/2007
News Provider
 Mahamad Rodzi Abdul Ghani
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Headline
 Barriers and Drivers for the Biofuels Industry in Europe

The use of biofuels (liquid fuels for transport produced from biomass) is attracting considerable attention nowadays in Europe as a strategy to tackle climate change, to secure a constant energy supply by reducing the Community's growing dependence on imported energy sources, and to contribute to regional development by increasing employment opportunities. Indeed, there are many policies, directives, and standards in the EU designed to stimulate and support the biofuels industry.
 
12.02.2007 ( fona - Forschung für Nachhaltigkeit, Germany )  -- The Renewable Fuels Directive (Directive 2003/30/EC) sets recommended targets for biofuels as a share of the total fuels used for transport. The aim was to increase that share to 2% by the end of 2005 and to 5.75% by 2010. In this context, the Energy Taxation Directive (Directive 2003/96/EC) aims at supporting the biofuels industry by allowing exemptions or reductions from energy taxation for biofuels. Furthermore, the recently released Biomass Action Plan (BAP) outlines more than 20 actions to stimulate the development and diffusion of bioenergy in Europe.
Recently, researchers from Sweden, the Netherlands, Luxembourg and Australia have compared and analysed the development and diffusion of both biodiesel and bioethanol and the socio-economic context for the biofuels industry in Germany and the United Kingdom. The study focused on these two countries because they provide a contrasting national context and because the success or failure of the introduction of biofuels in these countries is pertinent to the development of biofuels across Europe. The authors identified, contacted and interviewed key stakeholders and reviewed a range of documents related to biofuels (policy documents, press, technical standards, research reports, etc.).

The main results of the analysis were:

1.  Most consumers only purchase bioethanol and biodiesel if they are priced competitively with petrol and diesel. 

2.  Excise duty exemptions or reductions can ensure biofuels are price-competitive, and therefore, trigger the sale and production of biofuels. 

3.  The support and commitment of the national government is critical for the stimulation of a biofuels industry. It has to provide clear signals to society, the oil industry and the car manufacturers. 

4.  Low-level blending is the easy and cheapest way to market biofuels but not sufficient to meet the 2010 targets. Therefore, it is necessary to first promote the diffusion of high-level blends by supporting the production and marketing of flexi-fuel vehicles and the distribution of biofuels in service stations. Secondly, it is necessary to alter fuel standards in order to allow high-level blending. 

5.  Niche markets such as bus fleets for public transport, truck operators and agricultural vehicles, are an opportunity for bioethanol and biodiesel. 

6.  Oil companies are more supportive of biodiesel than bioethanol. 

7.  It has been estimated that biodiesel and bioethanol in the EU result in 15%-70% greenhouse gas savings when compared to conventional fossil fuels. Nevertheless, the environmental impacts of biofuels vary depending on the feedstocks and the way they are farmed, processed and distributed. In any case, it seems clear that both biodiesel and bioethanol are expensive options for climate mitigation as compared to biomass for heating and electricity generation. 

8.  A sustainability certification scheme for biofuels would be necessary in order to reward the more sustainable biofuels. 

9.  It is important to support second generation biofuels so as to expand the range of production feedstocks and the promotion of more flexible and better performance technologies. 

Biofuels are part of a new technological system that requires institutional support in order to achieve the expected targets for 2010. Overall, this study provides many insights regarding the barriers and drivers for biofuels in Europe that may be especially relevant for the early stages of a biofuels industry.
 

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