Regulations:

Is ethanol just a scapegoat for rising feedstock prices?

31st January, 2007

It has been four years since the Promotion Directive on Biofuels was adopted. The EU failed to achieve its objective despite the motives that were the driving force of the original Biofuels Programme. It is vitally important to cut down carbon dioxide emissions and reduce the EU's growing energy dependency, so the EU is now revising the Biofuels Directive with a new policy objective: 10% minimum binding target by 2020.

Since fuel ethanol has appeared as a serious alternative to petrol, two criticisms have been voiced by certain industries/parties relative to its sustainability and impact on the food sector.

Interestingly enough, when fuel ethanol was limited to pilot projects in one or two countries, the question of the sustainability of oil was not a topical matter or at least not to such an extent.

We are all now very busy struggling to define sustainability as well as tailoring a mechanism aimed at measuring, tracking and controlling its many parameters. This is tremendously complex work which raises numerous questions and practical issues. In the meantime, the unsustainable system we decided to get rid of continues to generate the same problems. And oil prices are still high. The Organisation of the Petroleum Exporting Countries (OPEC), which has no interest in seeing fuel ethanol replacing petrol, has even warned that shifting to renewable fuels could lead to further price increases. One of the reasons why the EU has decided to promote fuel ethanol is because of its environmental performance.

Fuel ethanol has two fundamental characteristics: firstly it reduces carbon dioxide emissions by 75% (Ademe Direm Study), compared to petrol, and secondly it can be blended with petrol in almost all existing cars up to 10%. It can also replace petrol in specially adapted FFVs (Flexible Fuel Vehicles). The transport sector is one of the major oil consumers and highest carbon dioxide emissions contributors.

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