Emerging Biofuel Industry in the Eu

1. The current situation of biofuels in the European Union

Biofuels represent a renewable remedy for fossil transportation fuels such as petrol and diesel. To date, the predominant alternative energies employed in the transportation sector can be categorized into three types namely biodiesel, biogas and bioethanol. There is a vast and stupendous variety of feedstock suitable for the production of biofuels. Nonetheless, sugar beet, wheat, maize and rapeseed oil constitute the majority of resources utilized in the EU by virtue of their domestic disposability. Due to the fact that the general utilization of biogas is at present limited and bounded to Sweden, this report will capitalize on the widespread alternatives of biodiesel and bioethanol.

1.1. Production and consumption patterns in the European Union

In 2003, the launch of extensive and sweeping reforms of the Common Agricultural Policy (CAP) marked a watershed event for a sustainable European agriculture. Thus the formerly reluctant production of biofuels ceased to continue and ushered in the emergence of the biofuel industry. The figures [Annex 1] illustrate the accretive importance of the biodiesel production in the EU. With an initial output of almost one million tons of biodiesel in 2000, this volume has quintupled during the last six years. Germany, Italy and France were instrumental in this development. Contrary to the sound and stable performance of biodiesel, bioethanol takes a back seat in the member states. It accounts for about one sixth of the biodiesel output.

The rationale for the superiority of biodiesel to bioethanol in the EU is twofold. First and foremost, there is an elevated demand for fossil-based diesel in the EU which translates into the need for imports. Biodiesel has the potential to recoup and supersede a considerable proportion of the conventional transportation fuel. Second, diesel is the preeminent transportation fuel of the countries which spearheaded the augmentation of the biodiesel turnout. This has contributed to the fact that biodiesel is ahead of bioethanol. Contrary to the broad and distinct priority of biodiesel in the EU, bioethanol has the upper hand on the world market. The figures [Annex 2] bear evidence that the world demand concentrates on bioethanol as the premier regenerative bioenergy. In 2005, the generation of 28 million tons of bioethanol outpaced by far the production of 2 million tons of biodiesel. The combined output of the member states of almost 1 million tons of bioethanol carries no weight against the production volume of Brazil and the USA which amounts to about 13 million tons each.

Against the background of the headway that has been made in the production of biofuels, the 27 countries have a gap to bridge in terms of utilization. The European Commission approved a reference value of 2 percent relating to the utilization of fossil energies to be earmarked individually by each state for 2005. However, the idea of granting great latitude to these states backfired. Twelve of the formerly 25 member states refrained from stipulating aims equitable to or greater than the indicated level. Moreover, eight of the countries, which devised adequate values, failed to deliver these targets. At present, the biofuel utilization is gauged to revolve around 1 percent, which resides beneath the reference value and beneath the 1.4 percent that would have been potentially achieved if all countries had met their determined objectives.

1.2. European laws and regulations concerning biofuels

The multitude of government policies in place was a decisive and pivotal means to marshal the member states to the heightened production of biofuels. Both a scheme for subsidized feedstock imports like tax and duty exemptions, as well as laws on minimum production prompted and elicited this prolonged and persistent development. However, as the implementation and the enforcement of these laws do not proceed concurrently in the individual countries, the degree of production output varies enormously. To effectively promote the targets validated for 2010, a common policy on a supranational level might prove to be more adequate and conducive.

The policies on the two percent objective established by the European Commission hallmarked the incipience of an active stance to promote and spur the utilization of biofuels. However, the circumstance that the countries were not obliged to meet the aims evolved to a major drawback. Countries did not place a high premium on means to deliver the target. In 2005, after the deficient achievements were revealed and divulged, the European Commission deliberated on the feasibility to commit the member states to the goals for 2010 in order to progress.

A rather ambiguous law on the utilization of biofuels was enacted