Critics say some biofuels push up food prices and do more harm than good to the environment

Energy ministers fail to agree food-based biofuel cap

EU energy ministers have failed to agree a compromise deal to limit the use of transport biofuels made from food crops.

Last year, in response to warnings about food price inflation and unintended consequences on the environment, the European Commission proposed to cap the bloc's use of biofuels based on crops such as maize or rapeseeed at 5 per cent.

An existing EU target to get 10 per cent of transport fuel from renewable sources by 2020 was introduced in 2008, an amount that would be almost entirely derived from food-based fuels, but lawmakers in the European Parliament backed a slightly higher cap than the Commission proposed of 5.5 per cent in June.

But this has stirred opposition from the biofuels industry, which has invested on the basis of the original 10 per cent goal and accuses the Commission of a U-turn that it says will force plant closures and cost jobs.

EU energy ministers today debated a new compromise of 7 per cent put forward by Lithuania, holder of the EU presidency, but member states were deeply divided with some, such as Poland and Hungary, arguing the cap was too low, while Denmark and Belgium, said it was too high. Others said a compromise deal should be accepted on pragmatic grounds.

The European Union's Energy Commissioner Guenther Oettinger said the delay would damage its efforts to reduce dependence on gas and oil imported from such sources as the Organization of the Petroleum Exporting Countries (OPEC) and would hurt its drive to curb greenhouse gas emissions.

"If we delay and postpone, the winners will be OPEC and Russia," he said.

Danish Minister for Climate, Energy and Buildings Martin Lidegaard called for a sub-target to spur new generation biofuels made from algae and waste, a cap of 5 per cent on crop-based fuels in line with the Commission proposal, and accounting of factors such as indirect land use change (ILUC) as soon as there was "a solid, scientific basis".

ILUC refers to the displacement effect biofuels can cause as land is cleared for extra food crops to produce them, sometimes negating the aim of curbing emissions because it destroys trees and peatland that serve as carbon sinks.

Representatives of Germany's biodiesel industry – Europe's largest – welcomed the deadlock, saying it allowed more time to find a more effective approach.

"The compromise did not contain suitable rules which would stop tropical rain forests being cut down," said Elmar Baumann, CEO of German biofuels industry association VDB. "But it would have heavily damaged Europe's biofuels industry and its farming."

Anti-biofuel campaigners were also relieved the compromise was not adopted, but said the status quo was worse.

"The EU needs to move fast and start listening to the consensus, which is that using food for fuel is an outdated and bizarre policy that needs to stop now," said Laura Sullivan of anti-poverty group ActionAid.

Greece, which takes over the EU presidency in January, will take up the biofuels dossier. However, the changeover of EU institutions next year, with parliamentary elections in May and the expiry of the current Commission in October, means a final deal is unlikely before 2015.

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