More progress needed on biofuel

THE government is continuing to stonewall moves towards the creation of British biofuels industry – at least publicly. But industry observers remain confident that progress is being made behind closed doors.

They say that time is running out for the government to come up with its plans to set an indicative target for biofuel incorporation in fossil fuels to meet the EU deadline of July this year.

Indicative targets set by the European Commission are 2 per cent incorporation by 2005 and 5.75 per cent by 2010. The Commission could “consider mandatory targets” for countries that fail to match these figures.

In the meantime, potential major investors in biofuel plant, such as British Sugar and Cargills, are becoming impatient at the lack of clear direction and support from the British government and may well choose to invest abroad.

The industry has taken little comfort from the government’s response to the Environment, Food and Rural Affairs Committee’s report on biofuels, just published.

Apart from official recognition of the positive effects on farm incomes and the rural economy from biofuel production and its minimal impact on the environment, the English National Farmers Union says the response fails to address the main areas of criticism.

The Commons Committee urged the government to set a lead department for biofuels and to develop a strategy to combat criticism of a “muddled and unfocused policy”.

However, the government said a multi-department approach was inevitable and had worked in other areas.

The NFU is also concerned the government has not taken the threat of imported biofuels seriously. These may have lower environmental standards than those set in Britain and lead to price undercutting.

Rad Thomas, the union’s non-food uses spokesman, said: “This response misses the opportunities to adopt sensible and considered recommendations of the EFRA committee report and it leaves the fledgling biofuel industry in limbo.”

A fully-fledged biofuel industry would offer major opportunities to use agricultural products, such as wheat, oilseed rape and sugarbeet, for industrial use with little taxpayer support apart from the 45 (£30.70) per hectare payment for energy crop growers after CAP reform.

So far the Chancellor has only agreed to a 20p per litre tax rebate on biodiesel, mainly made from vegetable oil, with the same concession for bioethanol due to come into effect in 2005. This is only half the rebate for more polluting liquid petroleum and compressed natural gases.

Source

business.scotsman.com vom 2004-01-30.

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