European Commission reportedly considering biofuel crop subsidy cut

The European Commission (EC) is planning to cut biofuels crop subsidies, according to Sega. The program of 45 euro per hectare subsidies was initiated when 310,000 hectares had been devoted to biofuels. In 2007, the figure has jumped to 2,840,000 hectares.

The new Transatlantic Economic Council (TEC), which meets in Washington in November, is expected to propose definitive standards for biofuels trade. Recently, numerous European biodiesel producers have reduced capacity or shut down due to competition from subsidized soybean-based biodiesel from the United States. The European Biodiesel Board points out that biodiesel producers in the US receive a subsidy of up to $300 per ton, and that as a result, US producers can export to Europe for less than the cost that Europeans pay for raw materials.

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