Special European update from Biofuels Digest columnist Will Thurmond
From Europe, Biofuels Digest Will Thurmond reports:
“I’m just back in from Berlin and not a good scene in Europe at the Biofuels 2008 event. Here’s the scoop fresh from the EU commission, the German biofuels association, and the UN. The EU is scaling back their targets, using “sustainability” as a veil for protectionism and as a reaction to the planned 2009 US renewed subsidies that can and will be used for exported biodiesel. The EU and Germany are also erecting these barriers in part in retaliation for 2007-2008 splash and dash. The biodiesel producers in Europe are pissed at the US!! (same story from the UK, Rotterdam and Brussels conferences earlier this year). In my view some of the Malaysian/Indonesian palm sustainability criteria is definitely legit, however and with good reason even with first-stage RSPO but it’s a start and a move in the right direction.
The German biodiesel association reported the German government and Germany – coincidentally – the largest producer/consumer of biodiesel in the world just stated it would not import any soy or palm based biodiesel under any condition, even ’sustainable’ RSPO palm or RSB soy. Not good for the US, Argentina or Brazil. Considering the US exports 70% or so of its biodiesel to Europe (and mostly Germany and Rotterdam/Holland) this will be a setback for the US and for European biodiesel if the EU and German laws are put into effect as planned.
I brought this up at the conference in Berlin, where I filled in for the European Biodiesel Board’s President/Executive Director Rafael Garrafolo to chair the biodiesel roundtable and there was some applause from the audience when I mentioned in that in some cases (not all) “sustianability is just another word for protectionism” and not in favor of free trade. The same could be said for trade policies/barriers against Brazilian ethanol. However, if the EU follows through with this sustainability criteria, it looks like the US biodiesel industry (and Indonesia and Malaysia and Argentina and Brazil) will have to find some new customers. This is both a challenge and an opportunity for re-direction and new markets in the US.
Until the laws in the EU and Germany are passed the impact won’t be felt yet so it’s a good time for US biodiesel producers to start running risk management scenarios and alternative opportunity scenarios for markets and customers “
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PFC | Nov 10, 2008 | Reply
The $700 billion economic bailout tax package signed by Bush in October included energy tax provisions that closed the splash-and-dash loophole, so some of this protectionism seems unnecessary.