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EU Tightens Reigns on Biofuel Production

The European Union's top energy official, Guenther Oettinger, has set out the world's "most stringent" biofuels certification regime.  The goal, according to Oettinger, is to make - sure our biofuels meet the highest environmental standards. The standards force biofuel makers to prove they do not create greenhouse gas emissions or destroy forests or wetlands. The rules take effect immediately.

The regime could include certificates to guarantee that all biofuels - whether grown in the 27-nation European Union or imported - are sustainably produced on land already used for farming in early 2008. Production must be independently monitored to see how much fertilizer is used to grow the crop, how much to process it into fuel and how much to transport it to the market.

Only biofuels that represent at least a 35% saving in greenhouse gas use compared to oil or diesel would be allowed and would get financial help from governments, such as low taxes or direct payments to suppliers. The European Commission says it could revoke the certificates at any time biofuel suppliers are not providing truthful information.

Meanwhile, the Renewable Fuels Association reports April ethanol exports of 40.8 million gallons, including both denatured and undenatured non-beverage. That volume compares to 48.3 million gallons in March. Year-to-date exports are 124.3 million gallons, which means 2010 exports have already surpassed exports for the entire 2009 calendar year. Exports to Brazil have virtually dropped to zero.

RFA Vice President of Research Geoff Cooper says that American ethanol producers continue to be forced to look for overseas markets for their product as domestic markets for ethanol remain saturated due to the regulatory cap on blending levels.  The ethanol industry is awaiting a decision by EPA on increasing ethanol blending allowances from 10% to 15%.