IEA calls for tariffs to be dropped on biofuels

The International Energy Agency has called for tariffs to be dropped on biofuels worldwide. It says that this would encourage their use, reduce the demand for conventional fuels and be an environmental and economic benefit to many countries.

Current tariffs are a significant barrier to trade, the report says.

On the benefits of biofuels, the report states: "Increasing the use of biofuels can improve energy security, reduce greenhouse gas and pollutant emissions, improve vehicle performance, enhance rural economic development and, under the right circumstances, protect ecosystems and soils. Because these benefits are difficult to quantify, the market price of biofuels does not adequately reflect them. This disadvantages biofuels relative to petroleum fuels."

Speaking at the launch of Biofuels for transport: An international perspective, a publication looking at trends in biofuel production, Claude Manil, Executive Director of the IEA said: "In the absence of strong government policies, we project that the worldwide use of oil in transport will nearly double between 2000 and 2030, leading to a similar increase in greenhouse gas emissions. Biofuels, such as ethanol, biodiesel and other fuels derived from biomass could help change this picture, by offering an important low-greenhouse-gas alternative to petroleum over this time frame."

The report claims that biodiesel and ethanol could displace up to 5% of motor gasoline fuel by 2010 if current policies are fully implemented. If production is concentrated on low-cost sugar cane to ethanol processes, up to 10% of world gasoline use by 2020 could be displaced and up to 50% by 2050, the report claims.

It highlights the fact that countries such as Brazil and India already produce relatively low-cost bio-ethanol from sugar cane, and could become net exporters over the next two decades, making the need for import tariff reduction more pressing. At present only Japan and New Zealand have no import duty on ethanol.

Biofuel producers Greenergy welcomed the call for import reductions saying it would be good for business.

Marcus Quinn, Managing Director of D1Oils plc, said he also agreed with the idea of lowering the tariffs. He told edie this would especially benefit Europe as it focuses on using rapeseed as a principal feedstock.

"The economics of using rapeseed don't add up. It's only viable through the use of subsidy," he said, adding that the continent would have to rely on imports to meet demand.

Mr Quinn said that current land use in Europe for crops such as rapeseed are at capacity and expected to see rapeseed prices increase by 30 - 40% over the next few years. This would make biodiesel production from rapeseed highly unproductive.

Instead, his company has been using a range of energy crops with far higher yields, such as the Jatropha tree. This has a high oil yield, is extremely durable, has a long production life and can be grown even on poor stony soils.

D1 is growing this, and other high yield plants, at various points around the world, for use within those locations, but mainly for export to Europe, the US and Japan. Mr Quinn said the company's long term plan was to use non-prime land and irrigate through the use of waste water for its plantations.

Whether the future is rapeseed or Jatropha, the outlook for biofuels in general looks bright. Europe currently has a target of raising biofuel use to 5.75% of motor fuel consumption by 2010, and although there is no direct legislation in the US, the IEA report says the direct subsidies will drive sales of bio-ethanol.

By David Hopkins

edie newsroom

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