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Europe's biodiesel industry could be wiped out by EU plans to tackle the unwanted side effects of biofuel production, after studies showed few climate benefits, four papers obtained by Reuters show.

Europe's world-leading $13 billion biodiesel industry, which has boomed in the wake of a decision by Brussels policymakers in 2003 to promote it, is now on the verge of being legislated out of existence after the studies revealed biodiesel's indirect impact cancels out most of its benefits.

"This study would pave the way for the demise of the European biodiesel sector," Philippe Tillous-Borde, chief of French oilseed giant Sofiproteol, which owns Europe's largest biodiesel producer, told Reuters.

The EU has been arguing for two years over the extent of indirect damage to the environment caused by it setting a target of increasing biofuel use to 10 percent of all road fuels by 2020, from less than three percent today.

Its own analysis shows the target may lead to an indirect one-off release of around 1,000 megatonnes of carbon dioxide -- more than twice the annual emissions of Germany.

The emerging picture that the EU has got its policy wrong has proved unpalatable, and the European Commission has refused a Reuters freedom of information request for the latest studies, arguing the public interest of disclosure is insufficient.

However, those documents have now been leaked.

"This would have significant implications for the existing EU biodiesel industry," said one of the leaked reports seen by Reuters, an impact assessment prepared by the Commission.

"The viability of existing investments could be affected in the long run, as the availability of conventional biodiesel feedstocks would be extremely reduced," it said.

The findings could have a major impact on the direction of investments by major oil companies such as BP and Royal Dutch Shell in low-carbon energy sources, and give a boost to firms involved in the development of next-generation biofuels from non-crop sources, such as Danish enzymes producer Novozymes and Spain's Abengoa.

In a second report, global biofuel experts warned that increased biofuel production driven by the EU's green energy targets will squeeze food supplies and increase global hunger.

"Any decline in consumption can have a severe impact for households that are already malnourished," said the report from a Commission workshop of international biofuel experts last November.

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p.s. just like in D.C. it seems the brainiacs in brussels are making more and more decisions for europe. i thought it was just an economic thing, like nafta.

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It sounds like they're giving up on something that proved a bad investment.  Whats wrong with that?

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Originally Posted by Bryant Platt:
It sounds like they're giving up on something that proved a bad investment.  Whats wrong with that?

a bad investment that THEY enacted in the first place. it's the same here, how reps on both sides of the aisle are looking to get rid of ethanol subsidies.