ALDE Seminar on The Future of the European Bio-energy Industry

Speech by Graham Watson MEP on Mon 14th May 2007

"Every facet of life in twenty-first century Europe depends on a secure and reliable energy supply;

• our economy,

• our quality of life,

• our global influence.

That is why one of the foremost responsibilities of government is to keep the lights on and the generators running.

But changing times bring changing challenges.

• With natural resources depleting,

• oil prices rising,

• and security of supply suffering.

Europe must radically re-examine patterns of energy supply and consumption.

Europe's energy sector is the front line in the fight against climate change.

How we produce and consume energy accounts for about two thirds of the C02 we put into the atmosphere.

Failure to cut those emissions by the sixty percent scientists deem necessary not only spells environmental disaster but, as the Stern Review makes clear, could reduce global GDP by up to 20%.

The shift to low carbon fuel is particularly crucial since transport emissions are forecast to grow by 77 million tonnes between 2005 and 2020 - more than in any other sector.

That's where bio-energy comes in.

Experience from Brazil suggests emission savings from biofuels - the major viable alternative to oil currently available - could be 70-90% of current levels.

Yet far from reflecting advances in technology, it has actually been around for some time.

Indeed, the first Model T Ford ran off bio-ethanol,

Up to now, however, Europe's Member States have shown a stunning disinclination to invest in them.

By 2005 biofuels made up only 1% of market share across the Union.

The EU's Biofuel Strategy, presented in December 2005, proposed;

• Tax exemptions,

• Agricultural subsidies,

• and investment in R and D.

But the best thing the Commission can do to ensure a fast switch to low-carbon is legislate.

For, in the long run, only robust obligations on Member States can bring down the cost of promoting biofuels.

We can only laud January's proposals for a Common Energy Strategy, which contains binding targets to generate 20% of energy from renewables - with 10% from biofuels - by 2020.

The Commission is currently consulting with stakeholders and will propose new biofuel legislation later this year.

However to move from 1% to 10% we cannot rely solely on EU initiatives.

Governments must now work together with business leaders to prepare industries and their products for the shift.

That could involve;

• creating market based incentives, like tax exemptions,

• Adapting EU standards and specifications to accommodate biofuel technology,

• or modifying the fuel quality directive,

to promote greener energy.

Likewise, it is also necessary to discourage use of biofuels - like those made from Palm Oil - which are environmentally unfriendly.

Critics have contended that diverting food crops for ethanol production is economically unsound, and that the irrigation, pesticides, and diesel fuel used to produce these crops actually pose an environmental burden.

There is some truth in those statements. But technology can help us overcome them.

One possible solution is Canadian enzyme technology which converts agricultural waste such as cornstalks and wheat straw into ethanol.

The possibilities for business are endless.

That is why the Alliance of Liberals and Democrats for Europe is delighted that so many participants from industry are here today to give us - and the Commission representatives - their views on how best to promote, sustain and reinforce the market in bioenergy.

We will be looking to your examples of best practice - as well as your criticisms of current policies - to move Europe forward in its battle against climate change and dependence on foreign energy sources.

Doubling the EU's Research and Development budget - as called for by the Commissioner for Science and Research, Janez Potocnik - could turn Europe into the workshop of a greener world.

Jatropha tree oil is one of the best sources of biodiesel. Because it grows best in tropical climates countries like India - which currently imports 78% of its diesel requirements - could be relatively self-sustaining and even become net exporters of the oil to Europe.

Yet even with biomass added to the current mix of renewable energy sources, Europe will still have to import 42% of its energy from elsewhere. Greater energy autonomy can only be achieved by a reduction in total consumption coupled with investment in projects like hydrogen fuel.

Studies show this could power up to thirty percent of the global car fleet by 2050 and achieve oil savings equivalent to a staggering 13% of global oil demand.

However the market will never take off unless billions of euros are invested over the coming decades.

That is where the EU can, and should, play its part if we are to continue to lead the pack.

The world is crying out for products that let governments keep to Kyoto commitments and avert the potentially ruinous costs of climate change.

We must grasp that challenge.

We must grasp that opportunity.

And we must never forget that, whatever our differences, the earth is what we all have in common."