EU introduces more biodiesel regulations

Members of European Parliament (MEP) have agreed that the level of contribution that conventional biofuels are allowed towards the EU's green transport targets is to be limited. It has also been agreed that companies producing biodiesel and other biofuels will have to measure how much indirect land use change (ILUC) is caused by the production of the fuels.

The cap on renewable transport targets means that member states cannot use traditional, food crop biodiesels to account for more than 5.5 per cent of their ten per cent target for renewable fuel use. Member states will now be required to invest in alternative forms of green transportation or fuels in order to reach the EU targets, rather than relying on biofuels produced by rapeseed, corn or sugar - amongst other food crops - to achieve them.

The EU is hoping that the introduction of this limit will drive the development of second generation biofuels, which do not require land use for the growing of food crops. Instead, the second generation fuels are produced from materials such as waste products and algae and don't compete with worldwide food production. Whilst smaller projects are in place to create these types of biodiesels, they have yet to be produced on an industrial scale.

The EU's decision to introduce legislation that requires companies to report on ILUC factors has been met with opposition. The measure has been introduced as it has been widely reported that certain feedstocks grown for use as a biofuel base are heavily competing with the growing of food for human consumption. Some research has also indicated that the use of biodiesels made from soybean or palm oil are actually worse for the environment than using traditional fuels.

It has been argued that the science around the measuring of ILUC is not developed enough to be used accurately. Many companies have suggested that the new limits and regulations being introduced could actually have the power to put investors off investing in second generation biofuels as the future of their investment may not be secure following further introduction of biodiesel related legislation.