WRITTEN QUESTION P-3210/00

by Jan Mulder (ELDR) to the Commission

(10 October 2000)

Subject: Use of agricultural products for non-food purposes

In paragraph 45 of its resolution A4-0219/98 of 18 June 1998(1) the European Parliament stated:

The use of agricultural products for non-food purposes, e.g. for biomass, makes it possible to create new sources of income and jobs in rural regions. Ecological energy generation from biomass contributes to reducing CO2 emissions. This sector should be supported in the context of Community legislation, in particular by means of tax privileges or exemptions, and, in addition, the use of certain non-food products with a positive life cycle analysis must be made compulsory, in particular in environmentally sensitive areas.

1. What action has the Commission taken so far to comply with Parliament's wish, apart from the appropriations available in the Altener programme?

2. In the light of current developments in the energy market, does the Commission advocate the drafting of proposals requiring a certain percentage of biodiesel to be mixed with ordinary diesel, which might have positive effects on the environment, make the EU less dependent on imports and promote the development of new markets for oilseeds?

3. Does the Commission also see any prospects for the application of pure vegetable oil as a motor fuel?

(1) OJ C 210, 6.7.1998, p. 180.

Answer given by Mrs de Palacio on behalf of the Commission

(16 November 2000)

Promoting biofuels has been one of the Community's aims since the early 1990s. In its recent communication on the European Union's oil supplies(1), the Commission's strategy provides for, in particular, the presentation of an energy saving and diversification plan at the Göteborg European Council. Among other things that plan will aim at taking appropriate action in order to provide incentives for the use of substitute fuels, including biofuels.

More specifically as regards the questions put by the Honourable Member: the granting of assistance in order to promote non-food crops is not provided for under the Altener programme.

The Commission would nevertheless again point out that, as part of the common agricultural policy, provision has been made(2) for the possibility of using set-aside land for non-food crops, but without specific further aid for energy crops. Nevertheless the Commission has noted the proposals made in this area by certain Member States when Agenda 2000 was implemented.

The Commission is certainly in favour of mixing biodiesel and diesel oil. It would point out that this is currently taking place, more specifically in France, where 5 % of the fossil diesel used consists of biodiesel. The Commission has been notified of the French regulations governing this area. The Commission and Member States have not raised any objection. The same type of notification has been received from Austria, concerning 2 % mixtures.

In addition the proposal that the law be used to require a low percentage of biodiesel to be mixed with diesel fuel within the Community had been put forward by certain circles concerned. The Commission feels that, at least for the moment, no such action would be appropriate. For certain Member States, at least as things now stand, any such mandatory inclusion would cause problems owing to a lack of production and distribution infrastructure or problems of raw material availability. The Commission feels that, for the moment, it would be appropriate to leave the option open to the Member States that are willing to expand this sector.

The Commission leaves to the Member States the choice as to which option seems to them best suited to their conditions. Thus, contrary to what takes place in France, unadulterated biodiesel is used in, above all, Germany, and also in certain niches of environmental relevance. It should be noted that the Commission has conferred a biodiesel standardisation remit on the European Committee for Standardisation (CEN) which takes account of the various potential uses (in particular whether blended or unadulterated). Moreover, as part of its policy on fuel quality, the Commission may, among other things, put forward proposals laying down the specification levels applying to biofuels(3).

Finally, Community policy favours biofuels while also taking account of their various potential uses. However, a more effective policy is now hampered first of all by fiscal matters. At the moment it is impossible for biofuels to make major inroads into the market without any tax exemption. The Community legislation in force only authorises that detaxing in the case of pilot projects. Since the early 1990s the Commission has been drafting proposals for directives which would create an adequate legal basis(4) for enabling the Member States to make such tax exemptions, but although its initial proposal was accepted by Parliament(5), this did not receive unanimity within the Council owing to opposition by one Member State. The Commission had provided a wider interpretation of the term pilot project authorising limited detaxing in France, (for a quantity of biofuels representing roughly 1 % of fuel consumption in France), but in its decision of 27/9/2000(6), the Community's Court of First Instance felt that the situation went beyond that of pilot. This stresses the importance of suitable tax legislation.

(1) COM(2000) 631 final.

(2) Article 6(3) of Council Regulation (EC) No 1251/1999 of 17 May 1999 establishing a support system for producers of certain arable crops (OJ L 160, 26.6.1999 and OJ L 194, 27.7.1999).

(3) Directive 98/70/EC of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EEC (OJ L 350, 28.12.1998 and OJ L 40, 13.2.1999).

(4) Proposal for a Directive on excise duties on motor fuels from agricultural sources (OJ C 73, 24.3.1992). Proposal for a Council Directive restructuring the Community framework for the taxation of energy products, Article 14 1(b), (OJ C 139, 6.5.1997).

(5) Amended proposal for a Council Directive on excise duties on motor fuels from agricultural sources (OJ C 209, 29.7.1994).

(6) BP Chemicals/Commission Judgment of 27.9.2000. Case T-187/97.