Opinion of the European Economic and Social Committee on Regrowing raw materials — development outlook for producing materials and energy
Date: 2006-03-15
Institutions: European Economic and Social Committee
Subjects: biomass, common agricultural policy, crop production, electrical energy, energy crop, energy policy, environmental protection, raw material, renewable energy, sustainable development

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to waive the obligation for grant recipients to declare the state
of their finances, when the thresholds set — particularly for the
cases covered by Article 173 — are far too high. The aim
should always be to strike the right balance between the
expected benefits (savings in time and money for both the
Commission and the public) and the potential costs (loss of
public money, calculated in terms of the probability and size of
the risk).

The

criterion of

4.7
caution and risk assessment
mentioned in point 4.6.1 above has, moreover, already been
adopted with regard to pre-financing: a guarantee (surety or
other form of guarantee) is required as a general rule for all
pre-financing with a value equal to the grant, and for any pre-
financing exceeding 80 % of the amount of the grant and above
EUR 60 000.

4.7.1
The EESC believes that the above provision is based
on the sound principle of caution as referred to in point 4.6.1,
but wonders whether these criteria might not also have been
applied to genuine grants (e.g. the cases cited in point 4.6),

Brussels, 15 March 2006.

given that, in terms of actual risk, the difference between
pre-financing and grant is very often — with a few, some-
times significant exceptions — more administrative than real.

4.8
Article 165 introduces a criterion which is entirely
acceptable but has not always been applied in the past: where
the recipients of grants are bodies which pursue an aim of
general European interest, the Commission is entitled to
recover the percentage of the annual profit corresponding
to the Community contribution to the budget of the bodies
concerned. This provision only applies in cases where the rest
of the body's budget is financed by Member States' authori-
ties which are themselves required to recover their share of the
profits.

4.8.1
The EESC fully endorses this provision but finds it
difficult to believe that the text as it stands can be intended to
the Commission should not also be entitled to
imply that
recover profits in cases in which the rest of the budget is
financed not by public authorities but by private entities.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

Opinion of the European Economic and Social Committee on Regrowing raw materials —
development outlook for producing materials and energy

(2006/C 110/10)

On 14 July 2005 the European Economic and Social Committee, acting under Article 29(2) of its Rules of
Procedure, decided to draw up an opinion on Regrowing raw materials — development outlook for producing
materials and energy.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing
the Committee's work on the subject, adopted its opinion on 27 February 2006. The rapporteur was
Mr Voss.

At its 425th plenary session, held on 15 and 16 March 2006 (meeting of 15 March), the European
Economic and Social Committee adopted the following opinion by 95 votes to 19, with 15 abstentions.

1. Conclusions and recommendations

— the increasing demands for sustainable solutions in the

context of security and development policy;

The relaunch of

the Lisbon strategy has established
1.1
sustainability as a primary objective of EU policy. The EESC
believes that
this own-initiative opinion on regrowing raw
materials could act as a spur to progress in key areas:

— a sustainable, environment-friendly raw materials base with

jobs in Europe's regions;

— security of supply and diversification of raw materials in

the EU;

— making Europe a dynamic, knowledge-based economic
space with high-potential technologies responding to rising
global demand;

— sea change in the use of raw materials as a strategy for
the same time, safe-

protecting the climate, whilst, at
guarding biodiversity.

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1.1.1
Even against the background of an increasing use of
regrowing raw materials, economical and efficient use of raw
materials will continue to represent the key challenge for the
future development of all sectors.

are or could already be produced which is the limiting factor in
the development of this sector. It is rather the level of proces-
sing technologies in respect of the products which could be
marketed which is lagging behind.

1.1.2
The Committee recognises the high level of effective-
ness in terms of employment of establishing a regrowing raw
materials industry in the regions; it also recognises the need to
develop an appropriate policy to provide employees and users
in all areas connected with the production and use of
regrowing raw materials with the requisite skills and further
training.

The Committee welcomes the EU Biomass Action
1.7
Plan, but regrets that it does not cover the production of mate-
rials but only of energy from biomass, and awaits assessment
of the Action Plan and moves to establish national and regional
action plans.

1.2
The Committee realises that many different units in the
Commission are addressing this issue from their own perspec-
tives, but it regrets the lack of a clear coordinating point or
task force for this EU policy area. It therefore calls on the
Commission to carry out a reorganisation to give the policy for
regrowing raw materials a clear sense of direction.

In the case of renewable sources of energy, particularly
1.7.1
biomass, most EU Member States are failing to adequately
exploit potential resources, because the general legal conditions
are inadequate. The Committee therefore calls upon the
Commission and the Council
to produce a more effective
policy in this regard.

1.3
The decoupling of direct payments under the Luxem-
bourg agricultural reform agreement of 2003 and the EAFRD
Regulation, as well as the future approval of sugar beet as a
regrowing raw material, provide an important basis for wider
cultivation in Europe.

1.3.1 When it comes up for review in 2006, modifications
should be made to the energy plant premium in respect of the
following points:

— possibility for applications for the premium also to be
made in the new Member States which use the simplified
CAP procedure,

— separate possibility of obtaining the premium for locations
not eligible for the payment as a result of the transforma-
tion process,

— administrative simplification,

— amount of the premium.

1.4
The Committee expects high allocations to be set when
earmarking aid from the Structural Funds for this sector's
economic development.

The 6th Framework Programme

1.5
largely neglected
research and development in the sphere of technologies for
regrowing raw materials. The EESC therefore calls for specific
actions in the 7th Research Framework Programme for the
development of regrowing raw materials and their material
applications, as well as funds for developing energy from
biomass. This will require a considerable increase in funding.

1.6
The Committee points out that, at the present time, it is
not the volume of supply of regrowing raw materials which

The Committee explicitly supports EU target-setting for
1.8
the share of renewable raw materials sources. It recommends 4
x 25 for 2020, or 25 % of electricity, heating, fuels and new
materials, such as compound materials, natural fibre reinforced
plastics, or other petrochemical products.

The Committee stresses the crucial importance of devel-
1.9
oping and implementing effective market launch measures
for all applications (electricity, heating,
fuels, and materials
production). The energy-saving laws of certain Member States
could serve as models of success here.
It is important for
measures to have the necessary flexibility to provide security
for investors and incentives to employ new technologies, whilst
taking account of differing background situations with regard
to, for example, technology and economies of scale.

1.10
As regards identifying policy approaches and poli-
tical obstacles, the opinion addresses several other points:
emissions and waste legislation, the packaging and end-of-life
vehicles directives, tax law, standards and the organisation of
the market in fibre plants. The REACH Regulation on chemicals
provides new perspectives
for biomass-based procedures.
Complex political and administrative obstacles exist in the 25
Member States owing to differences in policy implementation
and systems. The Committee calls on the Commission to iden-
tify political obstacles and propose solutions.

1.11
The Committee sets out cultivation requirements with
respect to competition for land use with food plants, energy
and the ecobalance, as well as nature, environmental and land-
scape protection. It proposes the introduction of an accredita-
tion scheme under which the origin of products and the
processing they have undergone are indicated.

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1.12 On the international front, the opinion points to
opportunities for the EU to export technology. At the same
time it calls for the WTO rules governing the international
trade in biomass fuels to take into account, in particular, food
sovereignty, and environmental and social standards.

2.4
Global resource policy framework: The economies of
the EU Member States are acutely dependent on fuel and raw
materials imports from all over the world. Increasing consump-
tion of and dependence on fossil raw materials, including crude
oil and natural gas, though also coal, is becoming unsustainable
and has many negative effects

1.13
sion's Biomass Action Plan in a separate opinion.

The Committee will address the European Commis-

2. Explanatory statement (background and overview of
the situation regarding a regrowing raw materials base)

Aims of EU policy: In the context of relaunching the
2.1
Lisbon strategy and applying sustainability criteria,
forward-
looking stimuli to progress are lacking in the following key
areas:

— a sustainable, environment-friendly raw materials base with

jobs in Europe's regions;

— making Europe a dynamic, knowledge-based economic area
with forward-looking technologies responding to global
demand;

— the increasing demands for sustainable solutions in the

context of security and development policy;

— the achievement of greater economic independence by
ensuring supplies of raw materials and by means of raw-
material diversification on a European level;

— switch-over of basic raw materials as a means of climate
protection, whilst at the same time safeguarding biodiver-
sity.

The aim of this own-initiative opinion is to set out important
aspects from the perspective of civil society.

2.2 Definition: Regrowing raw materials are defined as
materials produced by agriculture, forestry and fishing that are
also put to use in the non-food or non-feed sectors. This area
thus embraces all substances created by photosynthesis and
subsequent biological processes,
energy.
Biomass can be used as a material or as energy.

stored solar

i.e.

2.4.1
The lack of innovative developments and investment
with a view to achieving a sea change in the use of raw mate-
rials in the industrialised countries can be put down to the
pursuit of one-sided policies. The dramatic side-effects of
dependence upon fossil fuels do not comprise only ecological
damage and global climate change; external and security policy
risks also arise.

2.4.2
The consequences of global climate change, energy
price hikes and a lack of efficient alternatives are further
aspects of the misguided developments which have brought
about, inter alia, poverty in the developing states.

EESC documents have dealt in considerable detail with
2.4.3
the drama of climate change,
the worldwide difficulties in
implementing the Kyoto Protocol and the high expectations
and limited results of the Montreal climate change conference.
Everywhere and every day, calls are being made for European
and international solutions to be found.

for

2.5
Regrowing raw materials are a continually renewable
source of raw materials and energy. By contributing towards a
positive eco-balance, they can reduce pressure on the environ-
ment, in particular damage caused by CO2 enrichment. They
provide potential
regional economic and value-added
chains. They help to create and keep jobs in rural areas in the
EU; in these areas and in the upstream and downstream sectors
of both agriculture and forestry they can stimulate new
economic dynamism. They can make crop rotation more flex-
ible, thereby helping to safeguard biodiversity. By virtue of
their innovation potential, they have a wide range of applica-
tions and offer a broad substance base for chemical products.

National policies in the EU respond to the changing raw

2.6
materials situation

2.3
History: Production of regrowing raw materials is one
of the main agricultural activities in addition to production of
food and feedstuffs. These agricultural products began to be
displaced with the Industrial Revolution. It was not until the
middle of the twentieth century that petrochemical products
replaced biomass-based products to a substantial degree. With
traditional knowledge supported by new technologies and crea-
tive science, a wide range of new applications are available
today in the spheres of energy, pharmaceuticals, chemicals, the
construction industry and transport.

Many European countries have renewable energy laws to
promote feed-in of electricity produced on a renewable basis.
The feed-in price will be set higher on the basis of various tech-
nological and economic criteria. This leads to wide production
and marketing of new technologies, and cost reduction as a
result of extensive business experience and perfected technolo-
gies. However, as is clear inter alia from Commission Communi-
cations COM(2005) 627 and 628, there is considerable work
to be done in many European countries to provide effective
incentives for development and market launch.

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2.7 Worldwide policies: Renewable raw materials are
becoming increasingly important in various cultures and coun-
tries, especially in rural regions. Political and economic initia-
tives include the ethanol programme in Brazil, and trials with
jatropha (an oil plant) in the arid regions of India and Africa.
But there are also some alarming trends in South East Asia and
South America, for example, where forested areas are being
destroyed to satisfy the increased worldwide demand for fuel
oils. This has a very adverse effect on more than just the
climate. The United States is planning a long overdue shift in
its energy policy. It wants to produce 20 % of fuel and 25 % of
chemicals from biomass by the year 2030. The president and
Congress are now establishing the biomass sector as a corner-
stone of the US economy by means of the energy security law.

2.8
Renewable raw materials in the work of the EU: the
subject is being addressed from different perspectives by over
ten different DGs in the European Commission. The most
important work is being done in the Agriculture DG and Trans-
port and Energy DG. But Enterprise, Industry, Development,
Research, Regional Policy, Trade, Competition and Taxation are
also involved in this area. And the European Environment
Agency in Copenhagen is making a substantial contribution.

2.8.1
include:

EU initiatives for developing regrowing raw materials

— the EAFRD Regulation (rural development) also provides

for promotion of this policy area;

— Structural Funds;

— 6th Research and Development Framework Programme.

Most recently,
December 2005:

the Commission issued the following on 7

— Biomass Action Plan (COM(2005) 628);

— Communication from the Commission: The support of elec-
tricity from renewable energy sources (COM(2005) 627).

The European institutions are currently making decisions on
the following:

— EU strategic guidelines on rural development;

— recognition of sugar beet as an energy crop under the new

sugar market reform;

— 7th Research and Development Framework Programme;

— Directive 2001/77/EC on the promotion of electricity

— Commission Communication on biofuels (2006);

produced from renewable energy sources;

— Directive 2003/30/EC on the promotion of

the use of

biofuels;

— REACH chemicals directive (with new prospects for the use
of regrowing raw materials, particularly to substitute other
materials).

— Directive 2003/96/EC on taxation of energy products and

electricity;

3. General comments

— Directive 98/70/EC on quality of fuels;

— European Commission White Paper calling for a doubling

of the share of renewables by 2010;

— reform of the market organisation in fibre plants;

— use of set-aside land in the EU since 1992 for cultivating

non-food raw materials;

— Luxembourg agricultural reform agreement: set-aside with
cultivation option maintained, decoupling in principle
allowing free choice of plants without
loss of direct
payments, and new coupled aid for 1.5 million hectares of
energy crops;

3.1
The EESC would, however, stress that the basic signifi-
cance of regrowing raw materials has to do with the sustain-
ability of national economies. It also notes that the energy
value of key agricultural products is now higher than their
food or feed value. Without intending to start a debate about
values, the energy price now often determines the minimum
level of prices for agricultural products. This opens up new
alternative options in the field of material and energy applica-
tions and,
in particular, makes it necessary to develop and
introduce new technologies.

3.2
Integrated land use: The EESC recognises that there is
competition for land based on different demands: food; the
need to safeguard biodiversity; nature and environmental
protection; feedstuffs and non-food raw materials. This compe-
tition differs considerably from region to region and this trend
is set to continue. The amount of land available for these crops
likewise differs to a large extent from region to region.

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3.2.1
Productivity gains and declining food consumption
in the EU are expected in the medium term to release a further
13.7 million ha of the 104 million hectares of arable land. To
this should be added the amount of land presently being ‘set
aside’ under the CAP. Current consumer patterns for processed
animal products mean that a large proportion of Europe's
arable area is, at the same time, required for feedstuff produc-
tion.

3.2.2
But from Europe's point of view, land and forest areas
are also limited. Europe is the world's biggest importer of foods
and feedstuffs. The EESC is very concerned about the global
loss of arable land. Each year some 7 million hectares of agri-
cultural land is lost worldwide, and 25 % of all cultivated land
In 1970 there were still 0.18
is classified as endangered.
hectares per capita available, but
today the figure is just
0.11 hectares. This situation is exacerbated by the major uncer-
tainties brought about by declining global yields and shortfalls
in yields brought about by climate change.

to bringing about

The Committee concludes that there is a need to pay
3.2.3
considerable attention not
increased
just
yields but also, and in particular, to the efficient use of lignocel-
lulose plants, such as grasses and woods, and agricultural by-
products, such as straw. By-products of substance cycles, e.g.
manure in biogas plants, should still be used for energy produc-
tion. New, exacting demands should be made in respect of the
development of more efficient processing and conversion tech-
nologies. It is in these areas that the greatest challenges are
now arising; these challenges must be taken on board as an
integral part of EU R&D policy.

3.2.4
The Committee notes that the new Member States
of central and eastern Europe have a high proportion of agri-
cultural land. They also receive a large share of Structural Fund
allocations. This provides a good basis for EU and national
policy to establish investment and innovation incentives for
regrowing raw materials. The EESC calls urgently on the EU,
and in particular on the Member States, to ensure that appro-
priate legislation and planning measures provide for significant
Structural Fund resources to be earmarked for regrowing raw
materials.

In some Member States the restructuring process has
3.2.4.1
left large tracts of agricultural
land unused. The Committee
draws attention to the fact that their cultivation is less competi-
tive as payments cannot usually be claimed for them under the
CAP. The Committee urges the Commission, the Council and
the Member States to explore the possibility of targeting Struc-
tural Funds in order to enable this type of land to be used in
such a way as to bring structural benefits and promote employ-
ment in the regions.

3.2.4.2
for 1.5
The energy plant premium (45 euros/ha)
million ha, decided upon as part of the Luxembourg agri-
cultural reform agreement of 2003, comes up for review
already by the end of 2006. The EESC calls upon the Commis-
sion to consider whether the amount of
the premium is
adequate. The EESC takes the view that the current procedure
for applying for the premium is too bureaucratic and proposes
that administrative adjustments be made as a matter of
urgency. As things stand, no applications for the premium may
be made in the new Member States which have opted for a
simplified CAP procedure (8 out of
the 10 new Member
States). As part of the adjustments to be made with effect from
the end of 2006, the EESC calls for these Member States, too,
to be given the possibility of having access to this area
payment. As regards the amount of the premium, a separate
adjustment should be made for those locations which, as a
result of the transformation process, are not entitled to receive
payments.

3.3 Regional value-added — creating new jobs

3.3.1
In order to strengthen the local economy in rural
areas, the EESC believes it is necessary for initial processing
stages in particular to remain local as far as possible. Decentra-
lised technologies provide great potential for developing and
strengthening the regions in this respect, the aim being to
reduce transport costs for biogenic raw materials and increase
value-added in the region by refining and processing substances
locally. Such regional economic cycles maintain jobs in agri-
culture, as well as creating new ones in downstream sectors.

3.3.1.1
A 5 % rise in the share of renewable fuels by 2010
would create between 250 000 and 300 000 jobs — mostly in
rural areas — in the biomass field alone, assuming 70 % to
90 % of it was produced in Europe. Labour intensity in the
biofuel sector is 50 to 100 times greater than that of fossil
fuels, in electricity from biomass 10 to 20 times greater and in
In this latter sector, a very large
heat production double.
number of additional
jobs would, however, be created as a
result of the conversion and construction of heating systems; in
many regions the greatest impact on jobs is therefore likely to
occur in the field of heat production. The Mitre Synthesis
Report of 2003 established that, if the EU were to adopt an
ambitious raw material strategy based on renewable sources of
energy, almost 2.5 million net additional jobs would be created
by 2020 in EU-15 alone. It was forecast that two thirds of
those new jobs would be created in the biomass sector. The
Committee therefore highlights the major employment poten-
tial of the biomass sector, provided that appropriate incentives
are put in place to take account of the higher costs that can be
anticipated. Strongly forward-looking, but stable, conditions
must be provided for.

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3.3.1.2
These favourable prospects for employment will also
benefit rural regions in particular. There is, on the one hand, a
new need for highly skilled employees, particularly in the fields
of R&D. The numbers involved are estimated at around
400 000. There is also a need for employees having lower or
fewer initial qualifications. Overall, there is a need for a wide
range of new training and qualification measures for both
producers and users in all fields.

3.3.1.3
The Committee also draws attention to the fact that
industry, crafts, agri-
in the areas of research, universities,
culture, administration, media and consumers, there is a need
to step up the provision of training and further training in
respect of renewable raw materials.

3.3.2 With a view to structural change in rural regions, as
for example under the current reform of the market organisa-
tion for sugar, the Committee urges that available commercial
and industrial potential be harnessed and geared towards the
use of regrowing raw materials. EU restructuring funds are a
suitable instrument for supporting adjustment and the Struc-
tural Funds for redeveloping production sites. The EESC regrets
that use of Structural Fund resources is not conditional on
innovative and employment-friendly plans for such sites.

3.4 Use of regrowing raw materials in cascade systems

Regrowing raw materials can be used to produce both materials
and energy. Alternative uses must observe the cascade prin-
ciple. Use for materials production is therefore to be considered
ahead of use for energy. 80 % of oil and 59 % of biomass is
currently used in the processing systems. Under the cascade
principle, the order of use would be as follows: foods; produc-
tion of materials of appropriate quality; secondary raw mate-
rials, raw materials for energy production or even feedstuffs
(oilseed cakes);
low-energy raw materials with lignocellulose
breakdown; fertiliser.

Regrowing raw materials provide basic ingredients for washing
and cleaning products, varnishes and textiles. In car manufac-
turing the use of wood and natural fibres enhances recycling
the materials used can be
properties, and the weight of
reduced. Long-lived and short-lived plastics based on regrowing
raw materials also open up completely new perspectives for
waste recycling, since so-called biodegradable materials can be
composted and — as a better option from an energy stand-
point — thermically, or thermically and electrically (through
biogas plants) processed. The main ingredients of biodegradable
materials are starch plants and sugar, oil and lignocellulose.
The amount of such materials used worldwide has increased
since 1995 to reach a total of 350 000 t., deriving almost
exclusively from regrowing raw materials.

3.4.1.1
In the Committee's estimation, the building industry
offers many opportunities for developing new applications of
wood. This should also be looked at very carefully in forestry
planning. Although a range of products has already been devel-
oped ready for sale in the above applications, the processing
technology required for this also needs to be developed.

3.4.1.2
The Committee believes that implementation of the
chemicals directive will provide a basis for the further develop-
ment of biomass-based chemistry, which is only in its infancy
and therefore requires intensive research. When problematic
substances are identified in the course of the REACH process,
alternatives should be developed and this could be a promising
research field for regrowing raw materials. Between 1991 and
2005 the percentage of regrowing raw materials used in the
German chemical industry increased from 8 % to 10.4 % (this
figure relates only to the chemical and pharmaceutical indus-
tries and excludes the paper-making industry and the natural
fibre processing industry).

3.4.1.3
oping biomass-based product lines:

The Committee stresses the following goals in devel-

— more efficient use of materials and energy;

— replacing fossil raw materials and other finite raw materials;

— avoiding damage to the environment;

3.4.1 Use of

r e g r ow i ng r a w ma te r i a ls

to p r odu c e

mate r i als

— harnessing biodegradability;

The EESC sees many potential applications for regrowing raw
materials in the production of materials. Between 1996 and
2003 the quantity of natural fibres used in the German motor-
vehicle industry increased from 10 000 t, to 45 000 t. Wood
and natural fibres are used to make building materials, allowing
bio-construction and energy savings. Biodegradable lubricants
based on plant oil help to reduce environmental damage.

— reducing weight through light construction;

— tapping the advantages of bio-construction;

— achieving safety at work.

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lines

Development of

the different product

3.4.1.4
is
currently hampered by the fact that in many cases it has not
been possible to reduce costs. Reasons for this are lack of
funding for production and market launch, and inadequate
spending on research and development. In addition, these raw
materials suffer a tax disadvantage in some countries. The
Committee therefore
the marketability and
competitiveness of raw material applications be accelerated by
setting utilisation requirements similar to feed-in rules for elec-
tricity.

suggests

that

3.4.2 He a ti ng

The Committee considers heating production from renewable
sources to be crucially important in relation to climate policy.
Around 60 % of final energy consumption is accounted for by
this sector. Only products and raw materials having low-energy
properties are required in this context. The EESC is disturbed to
see that 35 % of the wood grown annually in the EU's forests
remains unused (excluding Natura 2000 areas), even taking
account of the necessary proportion of waste wood. Significant
additional aspects to be borne in mind in this context are the
fact that less waste wood means less risk of forest fires and the
fact that stepping up the utilisation of forests will give incen-
tives to regional economies. The replacement of crude oil and
natural gas in the heating market
is technologically well-
advanced and economically much easier than in other sectors,
and is precisely for this reason an essential aspect of environ-
mental and economic policy. Nevertheless, the use of biomass
for heat production is growing only very slowly.

3.4.2.1
Unlike the electricity and fuels sectors, legislation is
lacking on the use of renewables in heat production. In order
to promote biomass-based heat production at European level,
the Committee calls for further legislative measures to support
renewable heat production and use. The EESC takes the view
that measures similar to the feed-in rules for electricity could
stimulate action.

3.4.2.2
At present around 56 million EU citizens are
connected to district heating networks, 61 % of them in the
for Structural Fund
new Member States. The EESC calls
resources to be targeted at extending and overhauling these
systems to operate on regrowing raw materials. In the process,
the use of cogeneration should be particularly promoted.

3.4.2.3
Since there is a long time horizon for investment in
heating technology, co-generation, district heating and supply
systems, the Committee sees a need for far more short-term
measures, even in the ‘old’ EU Member States. There is an
urgent need here not just for information but also for adminis-
trative readjustments.

3.4.2.4
The different forestry and property law regimes in
the Member States impede individual households' access to
waste wood from forests. Red tape should be minimised here,
in particular given the new demand situation.

3.4.3 F u e ls

3.4.3.1
About 30 % of EU energy consumption is accounted
for by transport. Plant oil, biodiesel, ethanol and synthetic fuels
made from biomass offer alternatives to oil. The EESC notes
that progress in implementing the biofuels directive is very
sluggish. The aim is 5.75 % of market share by 2010, and
2005's figure of 1.4 % falls substantially short of
the 2 %
benchmark. The Committee explicitly supports the target areas
set out
in the Intelligent Energy Europe (IEE) programme
(Decision 1230/2003/EC):

— legislation, fiscal regimes and standards/norms for fuels;

— improving supply chains;

— market demand for alternatively propelled vehicles;

— accompanying measures.

At

the present

3.4.3.2
time, with a view to increasing
ethanol production in Europe, calls have been made in the
WTO negotiations for import quotas for ethanol to be set
accordingly. This is the only way to ensure that this new
economic sector, which seeks to provide a replacement for
petroleum, also has the chance to develop in the EU.

3.4.3.3
Both the European Commission and the Member
States are planning to replace tax breaks with fixed additive
quotas as an instrument for promoting the introduction of
renewable fuels. The EESC is concerned that many of
the
investments already made in this new economic sector would
thus be jeopardised, and calls for more policy certainty. It also
notes that regionally adapted investment is only possible if tax
breaks are used as an instrument to promote biofuels.

3.4.3.4
Even assuming an optimistic prognosis, not more
than a mere 35 % of current fuel consumption can be replaced
by plant-based fuels at some time in the future. Second genera-
tion biomass-to-liquid (BTL) fuels still require a considerable
amount of further technological development and development
with regard to market readiness. In the context of these fore-
casts, it is also pointed out that a given area can be earmarked
only once for a particular use. The Committee emphasises that
a more efficient transport policy and substantially lower fuel
consumption must remain priority objectives in order to safe-
guard our economic future.

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3.4.4 E le ctr i ci t y

of materials and energy in the EU is essential if these objectives
are to be widely met.

3.4.4.1
Over the next thirty years; power station capacity of
200 000 MW in electricity output will have to be replaced in
Europe. This will require investment of at
least EUR 200
billion, to lay the foundations for future energy production.
The Committee also sees an opportunity here to develop more
cogeneration systems by adjusting the size of power stations. In
this way energy efficiency may be increased considerably.

3.4.4.2 Waste wood, manure, biowaste and other animal
and plant waste materials have so far been used as biomass in
the electricity market. The share of biomass in power genera-
tion is growing only slowly. Unless biomass is used more, the
aims of the directive on the promotion of electricity produced
from renewable energy sources (EC 2001/77) will not be
achieved.

3.4.4.3
Since the electricity supply system represents a
bottleneck, fixed feed-in conditions can be effectively estab-
lished. The EESC considers the following factors to be impor-
tant: reliable returns on innovative investment, feed-in prices
differentiated according to production costs and available tech-
nology, five-year review to adjust feed-in prices to new invest-
ment with more efficient technologies, a bonus scheme for new
technologies, geothermal energy, small and more local units. A
bonus scheme based on raw materials used would also make
sense. The Committee believes that grassland and follow-up
crops and by-products such as straw should be rewarded
through a bonus scheme, as should also the utilisation of by-
products such as oilseed-cakes and spent grain.

3.4.5 T a r g e ts

EU targets exist for certain sectors where regrowing raw mate-
rials are used, such as biofuels and electricity production from
renewable energy sources. These should be updated to reflect
fuel energy markets. The
current price trends on fossil
Committee believes that the European Union should also set
common targets and a common framework for action in rela-
tion to the utilisation of regrowing raw materials as materials
and for heat generation.

3.4.5.1
The Committee favours a target of 4 x 25 for 2020.
In terms of future biomass use, this means that 25 % of electri-
city supply, 25 % of heating supply, 25 % of fuels and 25 % of
materials produced from crude oil products, such as plastics,
would be covered by regrowing raw materials and renewable
energies. The current level of consumption of fossil raw mate-
rials should serve as a basis in this context. Even in the event of
a shift to renewable resources based on these targets, the effi-
cient use of all resources is a crucial prerequisite for economic
development. This means that substantially more efficient use

3.5 Identifying political obstacles to the development of product lines

There are complex political and administrative obstacles in the
25 Member States as a result of differences in policy implemen-
tation and different legal frameworks. Certain key areas are
therefore mentioned below which should be checked for unjus-
tified, development-impeding effects on the use of regrowing
raw materials at both EU and Member State levels.

3.5.1 Pla nt fi b r e s

Country quotas for long or short fibres discourage investment.
As regards the structure of processing subsidies, the Committee
agrees with the findings of the study carried out by Ernst &
Young for the European Commission on the common market
organisation for flax and hemp. This study recommends main-
taining the subsidy for short fibres and turning it into a subsidy
for all fibres. To ensure strong growth of the natural fibres
sector the Committee calls for more predictability in this area
of the market organisation.

3.5.2 B u i ldi ng ma te r i a ls

Authorisation provisions under building regulations must be
adapted so as to favour the use of regrowing raw materials as a
building material, in view of the benefits which they offer both
as products and from a recycling point of view. In particular,
the Committee calls on the European Commission to establish
to what extent legal provisions prevent the use of these mate-
rials in the construction sector and to present proposals for
improving the situation.

3.5.3 E mi ssi on a n d w a st e r u le s

In many places, emission rules — especially for small incinera-
tion plants — and waste legislation governing the production
of electricity from biomass and biodegradable materials further
inhibit the introduction of potential applications for regrowing
raw materials. The Committee calls for an environment-friendly
framework to be defined allowing the intensive, environmen-
tally sustainable marketing of these products or increased use
of biomass. The same considerations apply in the case of the
observance of the air quality directive. The Committee also
calls for changes to the end-of-life vehicles directive to meet
the goal of improved recycling and further urges that, in this
same sector, the issue of energy efficiency,
in particular, be
examined in relation to new materials, light-weight construc-
tion and recycling properties.

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3.5.4 T a x le g i sla ti on

regimes

in Europe,

regards approximating fiscal

the
As
Committee calls for tax systems to be better geared to environ-
mental and resource concerns. The aim must also be to
dismantle tax privileges for fossil raw materials. On the other
hand, consideration should be given to reducing VAT,
for
instance on natural fibres. Another example is bringing down
VAT on the use of regrowing raw materials in district heating
systems.

3.5.5 E u r op e a n sta nda r ds

Even if there are legal rules governing processing standards,
the process of
there is a need for an ongoing review of
adapting and improving standardisation systems
to take
account of new biomass materials and technologies and there
is also a need to press ahead with this process. The aim should
be to safeguard, in particular, the positive balance as regards
the origin of products by taking action in respect of process
standards. In this context the Committee highlights the need to
introduce an accreditation scheme. By way of an example, in
the context of the carbon balance, the clearing of a rainforest
to make way for palm oil production would result in a negative
carbon balance for a period of 30 years. Furthermore, European
standardisation systems must be expanded to take account of
the positive product and recycling properties of biomass.

3.6 Policies to increase the use of regrowing raw materials in the EU

The Committee expresses concern over the current lack of
progress towards achieving a more effective EU energy policy
and raw materials policy.

The Committee is critical of the fact that a very large number
of Commission units deal with regrowing raw materials inde-
pendently of one another. Because this policy area is so impor-
tant, the Committee calls for a coordination unit or task force
to be set up in the Commission. Ambitious objectives, as set
out in point 3.4.5.1, are essential.

3.6.1 B i oma ss A cti on Pla n

The EESC welcomes

3.6.1.1
the Commission's Biomass
Action Plan for the EU. National and regional action plans
must be drawn up on the basis of this plan. It is necessary to
check whether the objectives are achieved. The Committee
welcomes the fact that the Action Plan addresses the issue of
the potential of biomass as a source of heating; this potential
remains largely unexploited. The Committee does, however,
regret that the Biomass Action Plan is only concerned with
using biomass to produce energy, and therefore calls for the
plan to be extended to support use as a raw material and
research into new applications, and to promote public relations
and consultative activities. From the point of view of economic
policy it is necessary to launch a business start-up initiative for
regrowing raw materials in order to strengthen the position of

SMEs in particular given the difficulty of attracting risk capital.
The Committee deplores the fact that, when dealing with inter-
national trade, the Action Plan fails to propose a change in
market access conditions commensurate with the problems
facing world trade.

3.6.1.2
The Commission's communication on the support of
electricity from renewable energy sources (COM(2005) 627
final) states that
the potential, particularly of biomass and
biogas, continues to be untapped due to the inadequate legisla-
tive framework in most EU countries. Feed-in systems with
cost-based prices have proven very effective in the market
launch of renewable energies. The EESC expects the Commis-
sion to draw on this report to come up with far-reaching
measures.

3.6.2 R e se a r ch a nd de v e lop me nt

The Committee is yet

to be persuaded that a
3.6.2.1
substantial part of the 7th Framework Programme for Research
and Development really is devoted to biomass use. More
comprehensive research programmes are needed for both
energy and materials production from regrowing raw materials.
The EESC points out the links that need to be made with other
research areas — such as materials research, chemical research
and nanotechnology. Adoption of
the REACH regulation
provides a further reason for promoting research activities in
the biomass-based chemicals sector.

3.6.2.2 Without the fundamental change in the matrix of
the new Research and Development Framework Programme
called for by the EESC, the necessary sea change in the EU's
approach to raw materials will be hampered. The volume of
supply of regrowing raw materials produced from the land is
not the limiting factor at present. The problem is rather lagging
progress as regards the technological level of further processing
and conversion technology right up to the production or
marketing of the products in question. Research in this field
needs to be stepped up.

3.6.3 St r u c tu r a l fu nds

The Committee expects a minimum of Structural Fund alloca-
tions in the next financing period to be earmarked for invest-
ment in regrowing raw materials.

3.7 Protection of the environment, nature and landscape: ensuring

biodiversity

The Committee thinks that expanding the use of regrowing
raw materials should not encroach on other environmental
objectives. It therefore recommends that the following princi-
ples be observed:

— cultivation of regrowing raw materials should be subject to
the same principles of good professional practice as food
production;

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— even after having been used for growing non-food raw
materials, which must be done according to the procedures
set out in points 3.2 to 3.2.3, the land concerned must
remain suitable for food production;

— regrowing raw materials should be cultivated on land that
is already being used for agriculture and on set-aside land,
including,
left
temporarily uncultivated, and their cultivation must not
lead to a reduction in permanent pasture;

for example, areas which reform has

— production should ideally be in regional or local cycles so
as to reduce transport, whose negative impact on the envir-
onment is well documented;

— ecologically valuable land should be reserved for nature
conservation and managed in accordance with conservation
goals;

— there should be a focus on promoting and cultivating
regrowing raw materials that demonstrate a good ecoba-
lance.

These principles should also underlie national and international
accreditation standards.

Observation of these principles can ensure that the production
of renewable raw materials constitutes a win-win situation for
economic development and the environment by ‘joining up
objectives which belong together’.

Brussels, 15 March 2006.

3.8 The international dimension of developing regrowing raw mate-

rials

With conflicts looming about raw materials such as oil, the
development of regrowing raw materials in the European
Union also has a foreign and development policy and peace-
promoting dimension.

Ensuring the supply of food to all sections of the
3.8.1
population must be the priority in every country. The
Committee therefore urges that the cultivation and export of
biomass fuel should on no account jeopardise a country's food
supply. WTO rules should also be qualified in this respect.
The governments concerned must be able to establish the
necessary policy framework to guarantee the country's food
sufficiency. The Committee likewise sees the need to include
labour-law standards and environmental
in the
WTO's non-tariff rules governing international trade in renew-
able raw materials. The Committee supports the setting-up of
an International Agency for Renewable Energies (IRENA) and
calls for greater transparency in the international raw materials
sector.

standards

The EESC notes that the EU economy is dependent
3.8.2
on the development and export of innovative technolo-
gies (1). Innovative processes and products from regrowing raw
materials provide the basis for making the EU a world leader in
relation to technologies of the future. The political framework
for the development of regrowing raw materials is thus of key
importance for economic growth within the European Union.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

(1) EESC opinion, OJ C 241 of 28.9.2004, pp. 44-48.

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APPENDIX

to the Opinion of the European Economic and Social Committee

The following amendments, which were supported by more than a quarter of the votes cast, were rejected:

Point 1.8

Delete point.

The Committee explicitly supports EU target-setting for the share of renewable raw materials sources. It recom-
mends 4 x 25 for 2020, or 25 % of electricity, heating, fuels and new materials, such as compound materials,
natural fibre reinforced plastics, or other petrochemical products.

Reason

The proposed targets of 4 x 25 by 2020 are too ambitious and do not take into account the interests of energy-intensive
production sectors such as the paper or chemicals industries.

Voting

For: 43

Against: 66

Abstentions: 14

Point 3.4.5.1

Recast as follows.

The Committee favours a target of 4 x 25 for 2020. In terms of future biomass use, this means that 25 % of electri-
city supply, 25 % of heating supply, 25 % of fuels and 25 % of materials produced from crude oil products, such as
plastics, would be covered by regrowing raw materials and renewable energies. The current level of consumption of
fossil raw materials should serve as a basis in this context. Even in the event of a shift to renewable resources based
on these targets, tThe efficient use of all resources is still a crucial prerequisite for economic development. This
means that substantially more efficient use of materials and energy in the EU is essential if these objectives are to be
widely met.

Reason

The proposed targets of 4 x 25 by 2020 are too ambitious and do not take into account the interests of energy-intensive
production sectors such as the paper or chemicals industries.

Voting

For: 44

Against: 70

Abstentions: 12