In Brussels, a draft proposal to eliminate food-crop subsidies for biofuels production by 2020, and cap crop-based biofuels to 5 percent of EU transportation fuels is receiving attention across the globe today. Yesterday came news that the European Union – which comprises both crop exporters and importers – is planning a major shift in its renewables policy that will explicitly discourage use of food crops for biofuels. At present, biofuels represent 4.5% of the EU’s transportation fuel consumption, with essentially all of this coming from food crops. At Raymond James, energy analyst Pavel Molchanov writes, “Given the EU’s existing 10% biofuels target for 2020, it means that the increase from 5% to 10% will have to come from non-food feedstocks,” and the EU is suggesting the establishment of quadruple-counting for advanced, non-food biofuels feedstocks such as algae or waste residues. Molchanov continues, ” There is no question that the new policy would meaningfully support adoption of energy crops. This can be segmented into two separate trends.
First, we would expect to see actual cultivation of energy crops in EU members with large agricultural sectors (such as France and Poland). Second, in countries where population density or other factors result in small agricultural sectors, imports of energy crops (from, say, Brazil or North America) would be the realistic solution”