Grown-up solution

Transport depends on oil for 98 per cent of its fuel needs. That degree of dependence would be a worry, whatever the fuel. It is of double concern, given that oil is the fossil fuel of which global supplies are lowest, and of which the EU has least.

We need to pursue many solutions to this problem; but today, biofuels are just about the only large-scale option available to diversify fuel sources in the transport sector. We must ensure that we take advantage of the opportunities they offer.

Greenhouse gas emissions in transport are growing fast, too. This growth is negating the savings being made elsewhere. On present trends, transport will account for more than 60 per cent of the EU's increase in carbon dioxide emissions between 2005 and 2020. it is essential for this to be reversed. At EU level, there are just two policies with the capacity to do this on a significant scale — vehicle efficiency improvements and biofuels. We must promote them both strongly.

The EU's promotion of biofuels took its first big step forward in 2003, with the adoption of our biofuels directive — a piece of legislation that set two 'indicative' targets — a two per cent share of the EU fuel market in 2005 and a 5.75 per cent share in 2010.

Disappointingly, we did not achieve this first indicative target. Even last year, biofuels' share only reached 1.5 per cent. But the pace of implementation is picking up.

Given the increasing urgency of the problems we aim to address, we reviewed our policy. For renewable energy in general, we now propose a binding European target of a 20 per cent share in 2020 — three times higher than its contribution today. For biofuels, we propose a 10 per cent share of the transport market in 2020.

It is, of course, essential to ensure that this increase is fulfilled in a sustainable way. We cannot just sit back and assume this will happen automatically. Most biofuels deliver solid greenhouse gas savings, but there exist inefficient production techniques that do not. The use of these production techniques must be avoided.

Most biofuels will be produced on land that has been in use for generations. But some will come from newly-cultivated areas. Here, there is a risk of causing big greenhouse gas losses through the release of carbon stored in the soil and in plants. There is also a risk of disturbing biodiversity and disrupting natural habitats. These, too, need to be avoided.

Furthermore, to achieve the 10 per cent biofuel share as efficiently as possible, we must aim at the earliest possible opportunity the entry into the market of 'second-generation' biofuels. These can be made from a wider range of raw materials such as straw, organic wastes and woody material. This will increase the security of supply benefits of the policy, as well as its environmental performance.

We plan to incorporate our biofuel measures, alongside others needed to push the share of renewable energy up to 20 per cent, in a single directive, which should be ready before the end of the year. This will give legal backing to the 10 per cent target.

But we need to work together at international level as we develop our biofuel policies. One important reason for this is that we expect and hope to see an increase in global trade in biofuels and in biofuel feedstocks.

As far as the EU is concerned, we could — if we had to — fulfil our 10 per cent target entirely through domestically-produced biofuels; notably, by using 'set-aside' agricultural land and by reducing the rate at which arable land is being abandoned in the EU. This approach would imply only a small increase in agricultural commodity prices — a matter of a few percentage points.

However, even if this approach is tech- nically possible, it is not the one that we want to follow. We think that this purely domestic sourcing of biofuels is neither likely — given current trade rules, and the increased trade liberalisation we hope to see in future — nor desirable. Instead, we aim at a 'balanced approach' under which domestically-produced biofuels and imports will both contribute to meeting the EU's growing needs.

We are keen to work constructively with other countries, regions and international organisations to create the necessary framework for this increased trade.

But trade issues are not the only reason for working together.

A wider principle of solidarity is also at play, because when one country or region adopts a sustainable policy of biofuel development, everyone gains from the consequent reduction in greenhouse gas emissions.

We all gain as biofuels become an increasingly credible alternative to oil-based fuels in the transport market.

And we all gain from the emergence of new opportunities for economic development in rural areas.

Finally, we all gain because each country's experience offers lessons that others can draw on. At EU level we have learnt a lot from the pioneering efforts of certain member states, from Brazil and from others internationally. We must, and we will, plan our biofuels policies to take advantage of these benefits through international co-operation.