21590 C^fficial]ournal of the European Communities ^oC12^7 
totheOOp^^ono^the^conom^candSoc^Go^m^tee 
The following members,present or represenred,vored^orrhe Opinion 
Mr^Mrs^Miss Amaro, Arets, Bazianas, Benro Goncalves, Berger, Berns, Berron, Black, Bleser, Boddy, 
Boisseree,Bordes^ages,Bos,Broicher,VascoGal,Garroll,Gavazzun,GeDalloHerrero,Ghrisne,GolomDo, 
Gortois, van Oam,Oassis, von derOecken,OellaGroce,OeTavernier,nodd,nonck,nos Santos, Orilleaud, 
van ^ekert,^lstner,^tty,^ulen,^lum,^orgasiGaDrera,^randi, freeman, Gayetot,Geuemch,Giacomelh, 
Gomez Marnnez, Haas, Hagen, Hancock, Horsken, Hourhuys, Hovgaard lakoDsen, Jenkins, Xazazis, 
Xirch^eld,Xitsios,deXnegt, Xroger,LakaMarnn,LandaDurudeSilva,Lappas,Larsen,Laur,Mveran4 
Lusrenhouwer,Maddocks,Margot,Marvier,MayayoBello,Mercier,Meyer-Horn,Morales,Morselh, Mutter, 
Mumz Guardado, Murphy, ^ielsenB,e^ietsen^,e^ierhaus,^ieuwenhmze,^oordwal, pardon, Petersen, 
^etropoulos,^otyzos,^roumens,e^uevedo^o,^afropoutos,^amaekers,SannllanGaheza,Schmirz,Schme 
ders,Schoepges, Schweitzer, Silva,SmithLl,Speirs,Staedetm,StraussTukker,Valle^oGatderon,Vanden 
Broucke,Vassitaras,VetascoMance^o,Vercettmo,Vlassopoulos,w^aldack,^ick,Zufiaur^arvaiza 
The ^otlowmgmemhers,present or represenred,voted against the Opinion 
MrBMrs^Miss ^pancio Bravo, ^spmalt,Bagtiano,Gorett^yora,Oroutm,^res4 Gardner, Germozz4 Green, 
Xaaos,MachadovonTschusLMametn,^eroOaSilva,de^ormann,^anero^lorez,^ellenerG,^ellener 
^,^errin^ettener,Schade^outsen,Srone^ugh,Tamhn,Telles,TesoroOhver,TermesGarrero,^hirworth 
The following memhers,presenr or represented, ahstamed 
Mr^Mrs^Miss ^rena,Beate,Beltram4Gamphett,Geyrac,Goltas,^lvesGonde,Goyle,necaillon,Orago, 
^tather,Garcia Morales, Xenna, Low,Moretand, Pearson,^angom-Machiavelh,^iDiere,^oDinson,^olao 
Goncalves, ^Oosemgrave,T^ier,Vidal,Wagner 
Opinion on u^creas^ng the use of agricultural and forestry resources in the nonfood industrial 
and energy sectors^ prospects opened up hy research and technologtcal innovation 
(90^C12^1^ 
COn 2^ Aprdl9^^the Economic and ^ocialCommittee, acting under the fourthparagraph 
of Article 20 of its Rules of procedure, decided to draw up an Opinion on increasing the use 
of agricultural and forestry resources in the nonfood industrial and energy sectors^ prospects 
opened up by research and technological innovation. 
The subcommittee on Research and Technology^Agncultural and forestry Resources, 
which was responsible for preparing the Committees work on the matter, adopted its 
Opinion on 2^Eebruary 1990.1he Rapporteur was AirlOeTavernier, the CoRapporteur 
was Air Boddy. 
At its 275th plenary session (meeting of 29 Aiarch 1990) the Committee adopted the following 
Opinion by an overwhelming ma^onty,with one dissenting vote. 
PREAMBLE 
In February 19^ the European Council ask^ed the Com 
mission to explore allthe possibilities for intensifying 
thenonfood utih^ationof agricultural raw materials 
and to present proposals on this subject. ^ith this COpimon the Economic and social Committee 
aims to help pinpoint potential uses After analysing 
the current situation, it goes onto e^plorerealpossi 
bihties and the requirements to be met for this purpose 
No C 124/48 Official Journal of the European Communities 21. 5. 90 
To this end the Committee organized (on 19 January 
and 26-27 June 1989) hearings to consult the groups 
directly concerned (particularly industry, agriculture 
and forestry) and employers' and workers' representa­
tives. 
The first part of the Opinion contains a number of 
general comments on the reasons for stepping up the 
use of agricultural and forestry resources for non-food 
and energy purposes and outlines the broad prospects. 
The second part reviews certain specific sectors: starch 
and sugar, oils and fats, biofuels and forestry products. 
Lastly, the Committee puts forward a set of recommen­
dations regarding the prospects opened up by research 
and technological innovation. 
PART ONE: GENERAL REMARKS 
1. Reasons justifying greater use of agricultural raw 
materials and forestry resources for non-food and 
energy purposes 
1.1. Firstly, the Committy observes concern and 
determination to tackle and alleviate the side-effects of 
the recent common agricultural policy (CAP) reform, 
which was primarily concerned with ending surpluses 
and/or cutting budget costs. In addition to the appli­
cation of a restrictive pricing policy (particularly for 
cereals) this reform imposed production ceilings ('stabi­
lizers') and set in motion a land set-aside programme. 
1.1.1. The Commission took the view that studies 
into surplus production capacity pointed to the need, 
in the Community of the Twelve, to take 11 million to 
13 million hectares arable land out of production, i.e. 
roughly 10 % of the Community farming area, in order 
to restore the balance between supply and demand. 
1.1.2. The social, regional, ecological and cultural 
implications for certain categories of farmers, and for 
the rural environment as a whole, will not be discussed 
in this Opinion. Here the Committee would refer to 
the Opinion on the future of rural society, adopted on 
27 September 1989 (1), and to the measures advocated 
therein. 
1.1.3. In the Committee's view, the CAP reform 
should open up new prospects for Community agri­
culture. Forestry, biomass, certain crops such as flax, 
hemp, cotton, ornamental plants, aromatic and med­
icinal plants and other 'alternative' crops will perhaps 
(!) OJ No C 298, 27. 11. 1989, p. 32. be able to play a more important role in European 
agriculture and expand outlets. 
1.1.4. The introduction of 'alternative' crops will, 
however, have to be preceded by a major research and 
development (R&D) drive, particularly as regards crop 
selection and conditions of cultivation. 
1.1.5. In addition to the general CAP reform, the 
new (1986) starch and sugar regime adopted by the 
Council on 25 March 1986 enables European non-food 
industries to make use of these agricultural materials 
at more competitive prices (2). 
1.2. Secondly, the Committee notes the need for 
stategical diversification and more rational deployment 
of the raw materials available in the Community. 
1.2.1. Some raw materials (e.g. certain substances of 
fossil origin) are exhaustible in the medium term. Poli­
cies are therefore implemented to save these products 
and deploy them more efficiently and to promote the 
use of renewable raw materials. 
1.2.2. In the energy sector, this trend also reflects the 
Community's determination to diversify and increase 
the reliability of its supply sources. 
1.3. Though caution is desirable in such matters, 
account must be taken, alongside economic and social 
considerations, of the environmental protection aspects 
which are increasingly playing a key role in the agricul­
tural and industrial development process. This environ­
mental concern relates both to general issues—protec­
tion of the ozone layer, reduction of C02 in the atmos­
phere, etc.—and to problems connected with more 
specific or regional phenomena, such as air and water 
pollution, acid rain, soil erosion, desertification, protec­
tion of certain natural landscapes, etc. 
1.3.1. Article 130R of the Treaty thus lays down 
that environmental protection requirements are to be a 
component of the Community's other policies. 
1.3.2. Here increased production and use of renew­
able vegetable raw materials (3) for industrial and 
energy purposes can be considered conducive to a more 
environment-friendly industrial development process 
while preserving farming activity, which is seen as a 
key prerequisite for a balanced environment, in many 
areas of the Community. 
1.3.3. However, the Committee would warn against 
intensified use of farming techniques inflicting damage 
(2) OJ No L 94, 9. 4. 1986. 
(3) The concept of 'renewable vegetable raw materials' 
encompasses a wide variety of uses of organic materials from 
agricultural and forestry plants to the production of algae. 
21. 5. 90 Official Journal of the European Communities No C 124/49 
on the countryside and thereby endangering the agricul­
tural fabric and harming the environment. 
2. Overall prospects 
2.1. The Committee has sought to identify the most 
promising lines of approach with the 2000-2010 time-
scale in mind as regards the use of agricultural and 
forestry resources in the non-food industrial and energy 
sectors, paying particular attention to research and 
technological development (R&TD) requirements, in 
keeping with its stated aim. 
2.2. This Opinion is based on the following assump­
tions regarding price levels: 
— moderate upward trend in the price of oil expressed 
in ECU, 
— upward trend in the cost of energy from the Euro­
pean coal and nuclear sectors (safety aspects, cost 
of decommissioning old installations, environment 
protection), 
— downward trend in the real prices of cereals and 
sugar in the Community. 
2.3. The Committee acknowledges that a substantial 
R&D drive has already been made, particularly at 
Community level, with a view to eventually diversifying 
the deployment of agricultural and forestry resources. 
This drive will undoubtedly be stepped up. 
2.4. A number of Community programmes are under 
way, some of them dating back many years. Their 
overall results merit attention and new projects are 
awaited. The most important of these programmes 
are BRIDGE (l), ECLAIR (2), agricultural research (3), 
JOULE (4), the energy demonstration project pro­
gramme (5) and THERMIE (6). 
2.5. Despite the impossibility of carrying out an 
exhaustive review of all European research bodies active 
in the development of non-food industrial and energy 
uses of agricultural and forestry products, the Commit­
tee observes that this rapid increase in both Community 
and national projects is not guided by a proper strategy, 
which is conspicuous by its absence. Nor are there 
carefully defined aims to determine research priorities 
and financing. 
2.6. The research carried out therefore seems too 
fragmented to constitute a 'key core' in different fields 
and insufficiently geared to industrial or commercial 
application. 
(!) OJ No L 360, 9. 12. 1989, p. 32. 
(2) OJN0L6O, 3.3.1989, p. 48. 
(3) OJ No C 164, 13. 6. 1989 (not yet adopted). 
(4) OJNoL98, 11. 4. 1989, p. 13. 
(5) OJ No L 350, 26. 12. 1985, p. 25. 
(6) OJ No C 101, 22. 4. 1989 (not yet adopted). 2.7. The Committee has repeatedly expressed con­
cern over the lack of coordination and concentration 
to be observed between related Community research 
activities, as well as between closely linked Community 
and national research programmes, and over the waste 
of effort, duplication, and in some cases inefficient use 
of funds, which is likely to result. 
2.8. The ESC Opinion on the ECLAIR programme (7) 
therefore drew attention to the lack of liaison between 
related programmes and the lack of coordination, and 
stressed the genuine risk of uncontrolled proliferation of 
red tape and expenditure. 
2.9. As is evident from an examination of certain 
specific sectors, the growing integration of agricultural 
and industrial research is a positive development, which 
is already encouraged in connection with Community 
research programmes but should receive a further 
boost. The complexity of the research, the large amount 
of know-how to be brought together and the high costs 
are all good arguments. 
2.10. However, R&TD, especially in biotechnologi­
es, is currently concentrated in the hands of a few large 
industrial concerns. In any event farmers and their 
organizations (especially farming cooperatives) will 
have to participate in the research and renewal effort 
in the sectors concerned so as to avoid undue depen­
dence on other sectors. Here the Committee considers 
that research centres in the Members States can play a 
key role in this broader participation process. 
2.11. A concurrent drive to exploit research findings 
and disseminate them to the agricultural sector and end 
users is of key importance. 
2.12. With specific reference to agricultural research 
(for example, the selection of new plant varieties), it is 
worth remembering that it is difficult—indeed often 
impossible—to meet simultaneously the requirements 
of the food industry (which is still agriculture's largest 
industrial consumer by far) and the requirements of the 
non-food industries (including energy). 
2.13. In view of increased research into energy raw 
materials of agricultural origin and the petroleum sector 
—e.g. the oxygenate compounds for adding to unlead-
(7) OJ No C 134, 24. 5. 1988, p. 15. 
No C 124/50 Official Journal of the European Communities 21. 5. 90 
ed petrol: ETBE versus MTBE(1); research on non-
polluting or biodegradable products derived from both 
fossil and agricultural raw materials—it is desirable 
that the sector concerned, particularly agricultural and 
petrochemicals, should be able to act in concert in order 
to identify better the present state of affairs, the needs, 
the possibilities on both sides, the interactions and the 
possible areas of collaboration. This would lead to 
better coordination of the research and investement 
policies of the agricultural and industrial sectors. A 
certain division of labour between the various sectors 
concerned could also be achieved on the basis of socio­
economic, environmental and regional considerations. 
Althought of a subsidiary nature, the role of the Com­
munity in such initiatives could be very important. 
2.14. Much more than the industrial or the energy 
sector, agricultural and forestry in the Community is 
fragmented and scattered over millions of holdings 
often situated in regions whose socio-economic devel­
opment is causing major problems. In order to be able 
to meet the requirements of the industries that use 
agricultural raw materials for non-food purposes, this 
fragmention will have to be offset by means of coor-
peration agreements—particularly mutual and cooper­
ative intiatives—or by means of appropriate short, 
medium-or long-term contracts between agricultural 
and industrial enterprises. This is the only way of 
achieving, on competitive terms, the critical volume of 
raw material necessary for large-scale processing and 
securing steady supplies for industrial users. Here Com­
munity research programmes concerned, like contrac­
tual arrangements, can also act as a potential catalyst 
cooperation and coordination between the relevant 
agri-forestry, industrial and energy sectors. 
2.15. The Community's agricultural, social and 
regional policies, particularly in the overall framework 
of the future policy for renewing rural regions, can be 
another important corrective. 
2.16. If such correctives are lacking, many disadvan­
taged agricultural regions will from the outset be losers 
in the technological and economic competition that is 
going to take place between the economically strong 
agricultural regions (Community or other) and the pro­
cessing industry. This would be contrary to Article 
130A of the Treaty which states that «in order to 
promote its overall harmonious development, the Com­
munity shall develop and pursue its actions leading to 
(') ETBE: ethyl tertiary butyl ether of agricultural or synthetic 
origin. MTBE: petroleum-based methyl tertiary butyl ether. the strengthening of its economic and social cohesion » 
—and that «in particular the Community shall aim at 
reducing disparities between the various regions and 
the backwardness of the least-favoured regions ». 
2.17. The Committee would also draw attention to 
the fact that a number of the technogical and economic 
parameters are determined not so much by the Euro­
pean context as by the world market. The multination­
als in the energy sphere will undoubtedly have a global 
approach: availability and prices of the agricultural raw 
materials, short, medium and long-term comparative 
advantage. It is up to firms in the Member States and 
to the national and Community authorities to find or 
create their own opportunities and strong points. The 
aid and encouragement of an appropriate policy on the 
part of the Community will also be needed. 
2.18. The world context places constraints on Com­
munity agriculture and industry that must be taken 
into account in any policy devised to encourage the 
production of agricultural and forestry raw materials 
for industrial and energy purposes. 
2.19. Certain international agreements—in particu­
lar those concluded under the aegis of the General 
Agreement on Tariffs and Trade (GATT), with Euro­
pean Free Trade Association (EFTA) and in the context 
of the Lome Convention—lay down preferential 
arrangements providing for zero duty on a number of 
Community imports (e.g. oilseeds, manioc and wood). 
These imported raw materials can also be used in 
industry and the energy sector, thus competing with 
Community products used for the same purposes. 
2.20. Such competition is nothing new and already 
presents Community agriculture with a serious problem 
because of the increased use of cereal substitutes (e.g. 
manioc). However, it could be further exacerbated by 
new by-products of the chemical and energy sectors. 
Failing a revision of these agreements—for instance, 
if the Commission proposal for adjusting the balance 
between GATT agriculture support and protection 
measures were to be accepted—any study of the 
matter at issue wil have to take heed of the above 
considerations. 
2.21. The Committee would also stress that the rapid 
succession of political, social and economic upheavals 
in the Eastern European countries, including the Soviet 
Union, could in the medium term have a significant 
impact on both Community agriculture and industry. 
21. 5. 90 Official Journal of the European Communities No C 124/51 
The Committee welcomes the European Communities' 
readiness to make its knowhow and financial resources 
available to assist these countries in transforming their 
economies. Here it expects the Community also to 
frame proposals taking account of the scope R&TD 
provides, or will provide, for channelling Eastern 
Europe's agricultural and industrial capacity into both 
traditional food production and industrial and energy 
outlets for agricultural products. 
2.22. Taxation is another factor which must be 
considered if the processing sectors are to be offered 
equitable arrangements vis-a-vis imported products or 
if an attempt is to be made to promote the use of certain 
raw materials considered to be preeferable (e.g. on 
ecological grounds) to others. It will also be advisable 
to provide tax incentives for certain R&D investements, 
particularly in the energy sphere. 
2.23. The two hearnings organized by the Commit­
tee particularly showed that extensive pratical possi­
bilities already exist for future use of agricultural and 
forestry resources for industrial and energy purposes. 
This is confirmed in the Opinion's review of certain 
specific sectors. However, it is clear that only a dynamic 
policy for exploiting these opportunities to the full 
and creating new openings will help to determine the 
volume of demand and the potential production of 
renewable raw materials. 
2.24. As is obvious from the above, such a policy 
cannot be framed and implemented in isolation, regard­
less of the aims pursued in the context of other Com­
munity policies: agriculture, food, industry, social, 
regional, environment and energy. Ongoing and plan­
ned R&TD activites concerning industrial and energy 
uses of agricultural and forestry raw materials must 
therefore form part and parcel of an effective strategy, 
to be defined without delay, which would specify the 
role to be played by the Community and the Member 
States respectively. 
PART TWO: REVIEW OF CERTAIN SPECIFIC SEC­
TORS 
1. Starch and sugar sectors 
1.1. In 1989 some 1,9 million tons of starch will be 
used for the manufacture of non-food industrial end products. In terms of raw materials, this starch was 
produced from 1,6 million tons, of maize, 0,5 million 
tons of wheat and 3,2 million tons of potatoes. In recent 
years the tonnage of starch—to which that of sugar has 
also to be added—used for non-food purposes has 
increased markedly. This growth is largely due to the 
rules introduced by the Community since March 1986 
reducing the difference between EC and world prices 
in the starch and sugar sectors. 
1.2. Though the quantities involved are quite small 
compared with total production of the agricultural 
products concerned, such measures have helped make 
Community industrial users and agricultural producers 
more competitive both with comparable non-EEC users 
and users of imported petrochemical or vegetable raw 
materials, such as manioc. 
1.3. To encourage increased use of starch and sugar 
for the future, industrial users and farmers must have 
guarantees of the continuity and reliability of this new 
regulatory framework and its practical provisions, fos­
tering a lasting climate of confidence. 
1.4. For this, due account must be taken of the 
demands of both the CAP and of the user chemical 
sectors. The latter's requirements are a) the availability 
of vegetable raw materials at prices which stand com­
parison with those paid by similar industries in non-
EC countries and b) regular supplies. To this end, 
regular consultations could be very useful between the 
chemical industry and the agricultural sector, involving 
both trade organizations and the EC consultative com­
mittees. The EC Commission must step up its efforts 
to coordinate or reconcile the actions of the various 
economic—agricultural, industrial—policy-makers. 
1.5. For ecological reasons two areas of particular 
interest to the starch and sugar sectors will see major 
technological innovations in the near future: a) plastic 
materials, particularly materials for plastic bags, which 
will have to be made biodegradable (or at any rate 
more biodegradable) and b) detergents, where phos­
phates will have to be phased out. With this in mind, 
the Committee stresses that one of the key priorities of 
the Community decision-making bodies must be to 
devise a sound framework of laws, regulations and tax 
measures whose future development can be reliably 
No C 124/52 Official Journal of the European Communities 21. 5. 90 
forecast. Entrepreneurs will then be in a position to 
plan ahead especially as regards medium- and long-
term R&D. 
1.6. But additional R & D is no less urgent. It is a 
fact that the EC is already involved in a multitude of 
R&D programmes in many areas. This increased 
involvement on the Community's part means that much 
more needs to be done right now in the way of coordi­
nation and continual updating. In the near future more 
research should be concentrated on improving the 
response of technology to environment protection 
imperatives. An increases use of certain vegetable raw 
materials would seem to fit in with this new approach. 
2. Oils and fats sector 
2.1. The Community uses some 2,7 million tons 
of oils and fats for non-food and 10,7 million tons for 
food (human and animal purposes). Of this 2,7 million 
tons about 40% is imported from non-member 
countries, and of this 0,8 million tons is of vegetable 
origin and 0,4 million tons of animal origin. The Com­
munity supplies 1,5 million tons, of which 1 million 
tons is of animal origin and 0,5 million tons of vegetable 
origin. It should be noted that EC imports of oils and 
fats for technical or industrial purposes other than 
food manufacture are liberalized and subject to zero or 
reduced (5 %) duty. 
2.2. In the oils and fats processing industry there is 
sharp competition between the derivatives of petroleum 
and of agricultural oils and fats. The trend in environ­
mental protection legislation is likely to favour the use 
of vegetable raw materials for industrial purposes, given 
among other things their specific natural biodegrada-
bility and surfactant properties. 
2.3. If the Community oils and fats processing indus­
try is to obtain more of its agricultural raw materials 
on the Internal Market, it would like to see an increase 
in a) the cultivation of improved traditional oleaginous 
plants, e.g. colza with a high erucic content, sunflower 
with a high oleic acid content, castor and flax, and 
b) the cultivation of new oleaginous plants, such as 
euphorbia lathyris and cuphea. Genetic research and 
research into adaptation to growing conditions (soil 
and climate) is being carried out under the aegis of both 
the Member States and the Community. This scientific 
work must be continued and more encouragement given 
to farmers so that the processing industry can meet 
more of its raw material needs on the Internal Market. 
2.4. Certain new plants or varieties seem particularly 
suited to the growing conditions (soil and climate) of the southern Community countries, which would 
increase the agricultural and economic potential of 
these regions. 
3. Bio-energy 
3.1. In recent decades there has been a considerable 
increase in research, development and demonstration 
(R&DD) programmes concerning renewable energy 
sources, including a number of agricultural and forestry 
products. This expansion of activity has been encour­
aged by an unsettled oil market, combined with the 
desire to reconcile energy production, marketing and 
consumption with ecological considerations. Similar 
trends can be observed elsewhere in the world (e.g. the 
United States, whose recently announced 'clean air plan' 
regards bioethanol as a major source of alternative 
energy). 
3.2. R&DD activities must be pursued and encour­
aged (e.g. in the field of genetic improvements, more 
environment-friendly agri-systems and biofuel pro­
duction methods) but regional, national and Com­
munity authorities in Europe still need to revise some 
of their energy priorities and place greater emphasis on 
ecological rather than economic dictates. Here some 
fiscal policy adjustments will undoubtedly be necessary. 
33. Closer cooperation between the oil and agricul­
tural sectors on production and marketing could be of 
significant assistance in solving a number of technical 
and economic problems. 
3.4. This section will look at several aspects primar­
ily connected with agricultural products. The following 
section will deal with forestry products. 
3.4.1. Biofuels 
3.4.1.1. Since the start of the oil crisis, in 1974, 
extensive R&DD programmes have been undertaken 
all over the world to develop the use of bioethanol as 
a substitute or additive to mineral fuel. 
3.4.1.2. In Europe bioethanol is produced mainly 
from cereals and sugar beet. These agricultural products 
have proved preferable to other vegetables (potatoes, 
chicory, sugar sorghum, topinamour) on account of 
their high yield as well as on CAP grounds. 
3.4.1.3. Financial estimates show, however, that the 
rate of return from production of bioethanol as a substi­
tute for mineral fuel would be far too low at current 
21. 5. 90 Official Journal of the European Communities No C 124/53 
oil price levels and would not even be viable if world 
oil prices doubled compared with 1989. However, the 
financial prospects are brighter when bioethanol is used 
as an oxygenized compound added to fuel to improve 
the octane rating or as an energy additive (up to 5%) 
in mineral fuel. Here ETBE ether produced from bioe­
thanol and isobutylene meets the required technical 
conditions. 
3.4.1.4. Isobutylene is also used as a raw material in 
producing another petroleum-based oxygenized com­
pound, viz MTBE ether, a viable competitor to ETBE. 
3.4.1.5. Though there is consensus on the need to 
pursue and step up research, it is clear that views differ 
widely as to the feasibility of a significant reduction in 
the production costs of bioethanol so as to make it 
ultimately a viable alternative to mineral fuels, or just 
as an additive. 
3.4.1.6. In any event, the Committee would point 
out that the Community grants export subsidies to 
unload the cereals and sugar markets and simul­
taneously assists farmland set-aside schemes. A fiscal 
or some other incentive for the use of bioethanol, up 
to a 5% limit, in premium and regular grade petrol 
would therefore not seem an unreasonable solution. 
The United States already grants such aid and in France 
bioethanol is taxed at the same rate as diesel oil. 
3.4.1.7. Any tax exemption should not be restricted 
to bioethanol added to mineral fuel but cover ETBE 
used to improve the octane rating. With this in mind, 
the Commitee suggests that the scope of the Council 
Directive of 5 December 1985, as amended by the 
Council Directive of 29 July 1987, on crude oil saving 
through the use of substitute fuel components in petrol, 
in particular Article 1, be re-examined in a more positive 
and encouraging light (l). 
3.4.1.8. In view of the de facto links between the oil 
and agricultural sectors in producing a fuel that meets 
the required technical, economic and environmental 
conditions, closer cooperation would seem desirable. It 
would then be easier to form production units capable 
of producing either ETBE or MTBE, depending on 
which seems preferable on grounds of price and 
immediate availability of raw materials. 
(') OJ No L 334, 12. 12. 1985, p. 20 and OJ No L 238, 
21. 8. 1987, p. 40. 3.4.2. Oils used as fuels 
3.4.2.1. For the past few years a colza oilseed-based 
fuel has emerged as a substitute for diesel fuel. So 
far such work has remained at the theoretical and 
experimental stage in Europe, largely because vegetable 
oil-based fuel is considerably more expensive than 
diesel. Insufficient R & TD and standardization work 
are other causes. 
3.4.2.2. Perhaps adequate fiscal or regional incen­
tives could be offered to enable interested industrial 
firms and agricultural holdings to try out this tech­
nology on a regional scale or at any rate to explore the 
practical possibilities through an extended network of 
demonstration activities. 
3.4.2.3. In addition to the potential regional and 
intersectoral benefits, this aid policy would facilitate 
productive interchange with other parts of the world 
(USSR, USA, Asia) where application of this technology 
seems to have reached a more advanced stage. 
4. Forestry-timber sector 
4.1. There are approximtely 55 million hectares of 
forest in the Community, i.e. a quarter of the total 
Community area. Roughly 40 million hectares are actu­
ally under development. 60 % of forests are in private 
ownership and 40% are publicly owned (mainly by 
state, regional or municipal bodies). 
4.2. Most privately-owned forest areas are fairly 
small—there are estimated to be 6 million private 
forest-owners—which is a potential brake on both 
forestry research and rational deployment of forest 
resources. 
4.3. Total EEC timber production (workable saw-
logs, industrial roundwoods and firewood) is estimated 
at 120 million m3. Industrial roundwoods account for 
roughly half of timber production but under 10% of 
total timber sale value, thereby underlining the key 
importance of sawlog production for optimization of 
Community forests. 
4.4. Forestry is estimated to provide jobs for 2 milli­
on persons a year. Timber processing employs between 
4 million and 6 million persons a year. Though the 
wood trituration industry is a heavy industry, over 80 % 
of forestry and sawlog production firms are small and 
medium-sized businesses. 
No C 124/54 Official Journal of the European Communities 21. 5. 90 
4.5. Timber consumption in the Community is esti­
mated at 240 million nr, half of which is supplied from 
non-Community sources. Imports include quality wood 
but largley consist of industrial round woods or prod­
ucts derived from them, such as cellulose for the chemi­
cal and paper industries. 
4.6. The Community is therefore highly dependent 
on non-Community sources for its short, medium and 
long-term needs. This situation could well worsen as 
timber and timber product consumption is expected to 
increase by 75 million m3 by the year 2000, while annual 
Community timber production will rise by only 30 
million m3. In financial terms, this deficit can be esti­
mated at between 15 000 million and 20 000 million 
ECU per annum. 
4.7. Consequently there are good grounds for boost­
ing the Community's forestry potential and sharpening 
the competitive edge of the forestry-timber sector. This 
boost must not, however, be indiscriminate but be 
tailored to specific demand for certain woods. 
4.8. On 29 May 1989 i1) the Council approved a 
forestry action programme 1989-1992 focussing on four 
key areas: 
— protection of Community forests, 
— development of forests in connection with the devel­
opment of rural and less-favoured areas, 
— processing and marketing of forestry products, 
— farmland afforestation subsidies to offer a viable 
alternative to the production of farm surpluses. 
4.9. This programme encompasses a wide range of 
measures to assist forestry and the wood processing 
industry, viz: 
— farmland afforestation subsidies, 
— more exploitation of forests in rural areas, 
— programme to promote the cork sector, 
— extension of aid for the processing and marketing 
of forestry products, 
— more effective protection of forests against air pol­
lution and fire, 
— creation of a European forestry information and 
communication system, 
— setting-up of a Standing forestry Committee. 
(') O] No L 165, 15. 6. 1989. 4.10. This Community programme, to back up 
national and regional forestry programmes, is a major 
step in the right direction. However, the Committee 
would stress that it should focus not so much on the 
conversion of arable land as on an afforestation policy 
for wasteland. 
4.11. There are a number of interesting develop­
ments in Community timber consumption. Consump­
tion of short-fibre wood (hardwood) for the manufac­
ture of pulp for paper used commercially (e.g. for 
data processing) is rising at around 6 % a year, largely 
necessitating the use of eucalyptus, a tree particularly 
suited to tropical and sub-tropical regions (e.g. the 
Mediterranean countries). 
4.12. On tropical regions, and bearing in mind the 
increasing demand in Europe for tropical hardwoods, 
it should be noted that many countries supplying the 
Community are experiencing serious problems (inef­
ficient plantations, inadequate transport infrastructure 
and insufficient processing capacity). In addition, a 
number of agri-forestry or local procedures could well 
result in the desertification of large areas of drought-
affected Africa. This prompted the Community to pro­
vide for desertification control measures in its action 
programme for the preservation and rational utilization 
of natural resources. 
4.13. Though the economic role of the forestry-tim­
ber sector and its contribution in preserving rural jobs 
cannot be underestimated, there are other factors that 
make forests particularly important in today's world, 
viz. their social, environmental and tourism impli­
cations. 
4.14. On environment conservation, forests do not 
merely protect water, soil, and wildlife systems but also 
generate renewable raw materials (in particular energy). 
4.15. Though the price/cost ratio for lignocellulose-
based energy production is, at the moment, less advan­
tageous than for fossil fuels, we must nor forget that 
considerable attention is currently being focussed on 
air pollution problems and increased C02 levels in 
the atmosphere. Clearly wood-based energy, suitably 
utilized, is an clean fuel and its C02 discharges, in a 
closed circuit, do not aggravate the greenhouse effect. 
21. 5. 90 Official Journal of the European Communities No C 124/55 
4.16. Concurrently, bearing in mind the ecological 
properties of wood as an energy source, the emergence 
of a political drive can be discerned among many 
regional and local authorities to develop their forestry 
resources in such a way as to restore the ecological 
balance. This trend should be encouraged by the Com­
munity authorities. 
4.17. The THERMIE programme, which will ge 
tunder way during 1990, lays less stress on technological 
innovation than on the publicizing of results already 
obtained, especially in the less-favoured areas of the 
Community. Consequently, it should be possible to test 
the technical and economic feasibility of the complete 
cycle (forestry raw materials—processing—energy 
production) on a number of sites. 
4.18. At a time when the conversion of farmland is 
raising tangible problems, the THERMIE programme 
should assist too in the co-financing of demonstration 
projects involving fast rotation species. 
4.19. There is immense scope for R&D in the for­
estry sector. But these opportunities have to date not 
been fully exploited. Here two obstacles have largely 
been responsible: 
— the long life cycle of trees, which has discouraged 
genetic research, 
— the tendency to keep agricultural and sylvicultural 
research separate from research into aspects more 
directly linked with industrial technologies. 
4.20. To achieve more effective use of lignocellulose 
for industrial or energy purposes, basic research must 
lead to a) more detailed general knowledge about ligno­
cellulose structures and the related genetic aspects and 
b) the discovery of new ways of isolating and separating 
carbohydrates from cellulose. 
4.21. Developments in modern biotechnology (such 
as cloning) should also make it possible to shorten the 
vegetative propagation process. 
4.22. The African, Caribbean and Pacific (ACP) 
countries constitute a high proportion of the poorest 
less developed countries (LDC) which are major timber 
producers. Because of a lack of fund and qualified 
researchers they lag far behind in forestry research. 
Scientific cooperation with these countries must be 
stepped up. In addition, top priority must be given to 
research into combatting desertification. [See the Commission memorandum on desertification 
(COM(86) 16 final)]. 
4.23. Lastly, forestry-timber research should have 
broader horizons and extend to cork production, which 
is of particular importance to two Member States— 
Spain and Portugal—which account for 80 % of world 
cork production. 
4.24. To rejuvenate cork oak plantations and cork 
production, genetic improvements, new farming 
methods and further work on new uses are necessary. 
4.25. Here attention is drawn to the R&D activities 
already undertaken in connection with programmes 
in the materials sector (raw materials and advances 
materials) (1982-1985 and 1986-1989) (*) (2), in particu­
lar under the renewable raw materials—sylviculture 
and wood products sub-programme and those planned 
under the R&TD programme in the field of raw ma­
terials and recycling (1990-1992) adopted by the Council 
on 20 November 1989 (3). 
4.26. Lastly, some Member States have launched 
programmes to inform the farmers and forest-owners 
concerned. Special schemes are also planned for small 
owners. These programmes are expensive and should 
receive not just encouragement but practical support in 
the shape of appropriate measures. 
PART THREE: RECOMMANDATIONS 
1. In the first two parts of this Opinion the Commit­
tee had no intention of studying in depth all potential 
uses of agricultural and forestry resources for industrial 
or energy purposes but merely of exploring the lines of 
approach that seem most promising in the 2000-2010 
timescale. This third part contains a number of rec­
ommendations on the requirements to be met and 
means of ensuring the continuous ans increasing use of 
such resources for purposes other than food, as part of 
a comprehensive, coherent strategy. The Committee 
urges that suh a strategy be framed without delay in 
consultation with all interested Community groups. 
2. In the Committee's view, increased deployment of 
agricultural and forestry resources for purposes other 
than food is one way in which the Community can 
safeguard the future of agriculture, and rural society in 
general, as it is currently in the throes of radical 
(J) OJ No L 174, 21. 6. 1982, p. 23. 
(2) OJ No L 159, 14. 6. 1986, p. 36. 
(3) OJ No L 359, 8. 12. 1989, p. 16. 
No C 124/56 Official Journal of the European Communities 21. 5. 90 
upheaval. The potential economic, social, regional and 
environmental benefits to be reaped by the Community 
are a further argument. The Committee therefore calls 
for a sustained R&DD drive and a dynamic technologi­
cal innovation policy. Nor can the overall cost/benefit 
ratio be conceived purely in terms of the anticipated 
eventual profitability of investment, even if positive 
financial results should be one consideration. In particu­
lar, account should be taken of the anticipated social 
benefits. 
3. The Committee would point out in particular 
that: 
— certain technological innovations, notably appli­
cation of biotechnologies, open up new prospects 
through the development of agricultural and for­
estry products tailored to certain food-industrial 
and energy uses, thereby providing one possible 
answer to land set-aside problems and the agricul­
tural and rural desertificaion process liable to result 
within the Community. However, the Committee 
would point to the need to avoid intensified farming 
techniques inflicting damage on the countryside, 
and thereby endangering the agricultural fabric and 
harming the environment, 
— agricultural raw materials usable by non-food 
industries and the energy sector are both biodegra­
dable and renewable (hence satisfying environment 
protection criteria) and therefore preferable to some 
raw materials (especially fossil-based) or petro­
chemical-based synthetic raw materials. The green­
house effect and the volume of non-degradable 
waste would be diminished significantly, 
— the use of local agricultural and forestry products 
will assist in securing safe and diversified energy 
supplies for the Community. 
4. The Committee therefore feels that opportunities 
for increasing the scope for industrial and energy uses 
of agricultural ans forestry products must be seized, 
here R&TD plays a key role which is bound to increase 
in the future. However, suitable measures are vital to 
boost impact and facilitate speedy application of results, 
while taking account of experience in other parts of the 
world. 5. Better organized and targeted Community research 
5.1. The data collected while this Opinion was in 
preparation and the review of specific sectors (see part 
two) have highlighted the decisive role of R&TD in 
securing and expanding non-food outlets. 
5.2. Concentration of Community action on key are­
as, a more integrated approach and closer coordination 
with national activities are, however, a perequisite in 
view of the cost and complexity of research and the 
wide range of knowhow required. 
5.3. One major advance in this direction is the forth­
coming presentation, in connection with the implemen­
tation of the framework programme for Community 
activities in the field of R&TD (1990-1994), of a specific 
research programme in the agricultural and agri-indus­
trial sector grouping research activities concerning the 
use of agricultural and forestry resources for industrial 
and energy purposes. 
5.4. The Committee would recommend that research 
activities proposed as part of this programme be under­
pinned by sectoral surveys of basic knowhow and tail­
ored to clearcut aims and set deadlines, in close liaison 
with all partners in the same sector. 
5.5. However, this programme cannot compensate 
for the absence of a strategy. The Committee strongly 
recommends the framing of a strategy integrating 
R&D work on the use of agricultural and forestry 
resources for non-food industrial and energy purpose 
into all relevant Community policies (agricultural 
industry, social, regional, trade, environment and 
energy) over the next 10 to 15 years. This strategy must 
generate a policy identifying, on the basis of established 
criteria, priority activities and the respective roles of 
the Community and the Member States. The required 
funding must also be estimated. 
5.6. In addition, the Community has a key part to 
play in adopting suitable measures to foster active par­
ticipation by agri-forestry groups (including many small 
firms) in the relevant research activities, and closer 
cooperation between agri-forestry, and industrial firms 
and research centres. 
5.7. Efforts must also be stepped up to disseminate 
and make optimum use of research findings, particu-
21. 5. 90 Official Journal of the European Communities No C 124/57 
larly in the agricultural sector, so as to involve this 
sector closely in the technological innovation process 
which will play a part in shaping its future. 
6. Development of sectoral pertnerships and framing 
of programming instruments 
6.1. The hearings organized by the Committee have 
highlighted some cases of cooperation, particularly 
between certain chemical industries and agricultural 
sectors for the purpose of pinpointing new outlets. Such 
cooperation must be consolidated and expanded as part 
of an effective agri-industrial policy tailored to pre-
established joint aims. 
6.2. Here the adoption of new starch and sugar 
regime in 1986 (see above) is an example of the type of 
measure to be adopted under this policy so as to increase 
outlets for industrial use of agricultural and forestry 
products. The regime adopted, as already mentioned, 
has helped to sharpen the competitiveness of Com­
munity industrial users of starch and sugar, besides 
boosting investment. 
6.3. This regime was largely due to the joint efforts 
of the industrial ans agricultural sectors concerned. 
Continuation and consolidation of such cooperation is 
clearly essential to convince industrial users of the 
continuity and reliability of this new regulatory frame­
work and to foster the creation of a lasting climate of 
confidence. 
6.4. In the Committee's view, such cooperation 
should not be an isolated example but a key factor in 
developing all non-food industrial and energy outlets 
for agricultural and forestry products. It therefore rec­
ommends closer partnership in all sectors concerned so 
that greater account can be taken of the requirements 
and constraints of each partner. 
6.5. Here the Community can provide vital impetus 
and provide a framework for regular consultations 
between industry and agri-forestry groups. 
7. A specific aid policy to encourage R&DD activities 
relating to agricultural and forestry production for 
non-food industrial and energy purposes 
7.1. The Committee would stress that R&DD activi­
ties relating to agricultural and forestry production for non-food industrial and energy purposes may eventu­
ally provide (possibly long-term) solutions for Com­
munity agriculture. These activities must therefore be 
significantly stepped up. 
7.2. Here provision must also be made for new con­
tractual and other instruments to set in motion targeted 
experimental schemes which will serve as a practical 
guide for farmers, processing businesses and industrial 
consumers. For instance, considerable benefits could be 
reaped from large-scale demonstration projects, span­
ning a minimum 5-10 year period, designed to ensure 
the continuous production of agricultural raw materials 
and develop specific processing techniques and practical 
industrial uses. Throughout these experimental 
schemes, it will be necessary to offset any additional 
costs involved as compared with rival traditional prod­
ucts. 
7.3. The Committee also feels that the scale of finan­
cial and other efforts required must not be assessed 
solely in terms of the profits to be expected in the fairly 
long-term future. The cost/profit assessment must also 
take account of the predicted social, regional, environ­
mental and other benefits. 
7.4. Here the Committee recommends that account 
be taken not only of Community research funding 
but also of the structural funds: European Regional 
Development Fund (ERDF), European Agricultural 
Guidance and Guarantee Fund (EAGGF) (guidance sec­
tion) and Social Fund. 
7.5. The Committee also recommends increased 
funding for R&DD activities in the forestry and timber 
sector, which it has found to offer an extensive range 
of opportunities for industrial and energy uses. 
7.6. The ultimate aim of the Committee's call for 
effective instruments and adequate funding for R&DD 
activities relating to the use of agricultural and forestry 
products for non-food industrial and energy purposes 
is the production of agricultural products which will 
enhance the long-term social and economic prospects 
of rural society in the Community. The objectives of 
the CAP reform (which aims primarily to eliminate 
surpluses and/or reduce their cost to the budget) should 
not, however, be called into question. 
No C 124/58 Official Journal of the European Communities 21. 5. 90 
7.7. Lastly, the Committee would stress that the 
required action in the field being studied also presup­
poses that more careful attention is given to coordi-
Done at Brussels, 19 March 1990. 
INTRODUCTION 
The present Opinion sets out to provide a general 
response to economic and institutional developments 
in the various countries of Eastern Europe. The import­
ance of these developments is incalculable, both for the 
countries involved and for the rest of the world, and 
they are still in rapid evolution. The process began in 
Hungary and Poland, and gradually spread to Czechos­
lovakia, the Soviet Union, the GDR, Bulgaria and 
Romania. Nor should we forget Yugoslavia, where 
political, ideological and economic reform had already 
been under way for some time. 
The Opinion will be followed by a general information 
report and a series of detailed papers on the individual 
countries of Eastern Europe. 
In the interests of clarity, it should be noted that the 
term « Eastern Europe » covers an extremely large and 
complex geo-political area. 
To asses accurately the economic, social and political 
situation of these countries, a distinction should be nation among related R&DD activities, as well as 
between closly interlinked Community and national 
research programmes. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
drawn between the countries of Central and Northern 
Europe (the GDR, Hungary, Czechoslovakia and 
Poland), the Balkans (Yugoslavia, Romania and Bulga­
ria), and the Soviet Union which forms a case apart, 
straddling Europe and Asia, and embracing a host of 
different races, languages and religions. 
The present Opinion has three main objectives: 
1) To assess the present economic and social situation 
in Eastern Europe, while taking account of the 
rapid pace of change and the different situations in 
individual countries. 
2) To assess the steps already taken by the EC a) as 
an emergency response and b) to put relations with 
Eastern Europe on a new footing. 
3) To draw up recommendations on the policies to 
adopt towards Eastern Europe in both the short and 
medium term. Opinion on the EC's economic relations with the countries of Eastern Europe 
(90/C 124/14) 
On 1 February 1990 the Economic and Social Committee, acting under the fourth paragraph 
of Article 20 of its Rules of Procedure, decided to draw up an Opinion on the EC's economic 
relations with the countries of Eastern Europe. 
The Section for External Relations, Trade and Development Policy, which was responsible 
for preparing the Committee's work on the subject, adopted its Opinion on 16 March 1990. 
The Rapporteur was Mr Briganti. 
At its 275th plenary session (meeting of 29 March 1990), the Economic and Social Committee 
adopted the following Opinion with no dissenting votes and seven abstentions.