Can the EU Make the Switch to Biofuels 2.0?

By Robert Vierhout | November 11, 2009
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A few months ago, I gave a speech at a biofuels conference on the EU's participation in financing and developing pilot-scale and demonstration-scale next-generation production plants. My presentation was rather short because there is not much to tell. It seems that, in terms of public and private investments, the EU is light-years behind the U.S.

With the Energy Independence and Security Act in force, the U.S. is spending hundreds of millions of dollars annually to promote what I refer to as Biofuels 2.0. The blender's tax credit, the Biomass Crop Assistance Program, the bioenergy program and funding from the Recovery Act also contribute to one common goal: commercializing Biofuels 2.0 by 2012. We do not know yet if it will happen, but the vast amount of concrete support offered through these incentives make it more likely. The present picture in the EU, however, is somewhat different.

There are approximately 20 lignocellulose projects in development or under construction in the U.S. By contrast, there are five or six such projects in the EU and none are very ambitious in production volume. Some are financed by the EU under the research and development framework program, others by individual EU member states or even as the result of a combination of public-private investments. There are three demonstration-scale cellulosic ethanol plants operating, with a total installed production capacity of 25 MMly.

I have often wondered why there is an enormous gap between the U.S. and the EU when it comes to next-generation biofuel production. Why is it so difficult for the EU to get its act together? The urgency and political calls for Biofuel 2.0 were identical in both regions. In the EU, however, this was not translated into swift policy action, whereas the U.S. put its money where its mouth was. The EU has a lot of targets and makes a lot of noise, but the U.S. has concrete mechanisms, deliverables and action.

To make Biofuels 2.0 a less risky investment and to force technological breakthroughs, Europe needs to increase public funding for pilot and demo plants and form a yearly mandatory target for second-generation biofuel use. Forming an annual consumption target will take a few years, but I expect it to be completed by 2012. The U.S. is possibly overambitious by setting a target for 2010. More realistic is a target beginning in 2015. By then it should be possible for Biofuels 2.0 to be produced in high volumes at a low price.

Additional R&D funding is a less-distant reality. The European Commission recently declared it would set aside money to promote low carbon technologies. Obviously, this is not just about biofuels but also biomass-based combined heat and power systems. Regardless, to have more public and eventually private money flowing into low-carbon technologies is an important start. I hope it will also result in greater coherency of public programs between member states. We don't have to look far to find a successful example of public and private money delivering the goods: the European wind energy industry is widely recognized as the world's leader and it was kick-started by successful EU R&D programs. I hope the powers that be will replicate for the European biofuels industry what they did for wind.

Robert Vierhout is the secretary-general of eBIO, the European Bioethanol Fuel Association. Reach him at vierhout@ebio.org.