EU biofuel subsidies providing only minor gainsFriday 26 Apr 2013 European taxpayers and consumers spent between 9.3 and 10.7 billion euros subsidizing biofuels in 2011 with relatively small gains for the environment and the economy, according to research issued by the International Institute for Sustainable Development.The European Union and its member states provide financial support to the biofuels industry with the intention of reducing carbon emissions, improving rural incomes and strengthening energy security. The support is mainly provided by setting mandates for consumption (which guarantees a market for producers, and raises prices for consumers) and exempting the industry from excise taxes. A new report by IISD’s Global Subsidies Initiative ( www.iisd.org/gsi) — an independent not-for profit research group — assesses the costs and benefits of EU biofuel subsidies in reaching their policy objectives. The government support granted to biofuels in the EU is striking when compared with the size of the biofuels industry and the number of jobs it creates. The 9.3 to 10.7 billion euros provided in 2011 is roughly 60 per cent of the entire turnover of the European biofuels sector, which was 13 to 16 billion euros in the same year. It also far outweighs the 6.5 billion euros the private sector has invested in biofuel production facilities from 2004 to the present. The small contribution that biofuels make to tackling climate change also throws EU support policies into question. Biodiesel emits more greenhouse gases than its fossil-fuel-based equivalent when taking indirect land-use change into account (the carbon emissions that result from clearing land to produce biofuel feedstock). Ethanol results in some emissions savings, but at a high price. Each tonne of avoided CO2 emissions costs between 432 and 493 euros — more than a hundred times the current price of a tonne of CO2 emissions in the EU’s Emissions Trading System. “In many cases the EU is actually doing more environmental harm than good by subsidizing biofuels. And where there is a reduction in carbon emissions, it’s very far from being cost-effective,” said Mark Halle, international vice-president of IISD. More >> |
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