EU eyes legal action over states' failure to meet biofuel targets

Brussels (Platts)--25May2005

The European Commission is hoping to take legal action against member states
that have failed to adopt the EU's targets for the use of biofuels in
transport at a national level, a key official at the European Commission's
energy and transport directorate said Wednesday. Under the EU's 2003 biofuels
directive, member states are required to set indicative targets for market
penetration of biofuels. 

The EU has said it wants to see biofuels making up at least 2% of transport
fuels by 2005, rising to 5.75% by 2010. Although the directive states the
targets are indicative, the European Commission believes it has a legal case
against members states that fail to give a compelling and reasoned explanation
for missing the goals, Paul Hodson said on the sidelines of a refining
conference in Brussels. In March, the EU sent its first legal warnings to 19
states out of the EU's 25 members that failed to transpose the directive by
the deadline of Dec 31, 2004.

To date, Belgium, Italy, Luxembourg and Slovenia have still not submitted
national reports and Cyprus, Estonia, France, Portugal have yet to set
definitive targets. Of the national targets submitted so far, the average
level biofuels use across the European Union is 1.4% for end-2005, with 12 of
the EU25 setting targets below 2%. "I must say we are disappointed," Hodson
told the refining conference. "Biofiels usage has as least picked up
significantly in nearly all members states [but] we have a law and we going to
make damn sure member states implement it." 

Countries that have set a reference value below 2% include the UK, Denmark,
Finland, France, Greece, Hungary, Ireland, Malta, Netherlands, Poland and
Portugal. Under the EU's 2003 directive members states must give a clear
target for biofuel use and propose "motivated" plans for achieving the target.
Hodson said the commission plans to argue that some member states have not
provided good reason, or motivation, for setting their targets below 2%.

"We have to make a legal case that the word 'motivate' means to give a good
reason and we have to make a factual case that the member states have not
given a good reason," Hodson said. He said the main reasons member states have
given explaining why their biofuel targets are below 2% fall in three
categories: that their energy biomass policies are focused at stationary fuel
use rather than in transport, that the penetration rates cannot be
accelerated, and finally that biofuels are "not a good idea." 

Hodson said a legal decision would likely be made in July on whether to
proceed with infringement proceedings for those member states that have not
submitted plans and have not given solid reasons for setting a target of less
than 2%.

This story was originally published in Platts Petrochemical Alert
http://www.petrochemcialalert.platts.com

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