SEVILLE, Spain - European Union output of biodiesel, a clean oilseed-based renewable fuel, will grow by at least 20 percent a year and will largely be made from rapeseed, the CEO of France's leading producer Diester Industrie said late on Tuesday.
"I believe biodiesel production will grow 20 percent a year at least -- in France it will grow 50 percent which helps the average -- until 2010. After that my crystal ball is not so clear," Bernard Nicol told a conference on biofuels in the southern Spanish city of Seville.
The biggest problem the expanding sector faces is where to obtain raw materials because European Union countries do not grow enough oilseed crops now to meet future demand from fuel makers.
Nicol said that to produce good quality biodiesel, which can be mixed with normal fossil fuel to reduce carbon dioxide emissions, the industry would have to rely on rapeseed. Sunflower seed was an option but its quality as fuel is worse, said Nicol, speaking on behalf of the European Biodiesel Board.
Commercial biodiesel would ideally be 70 percent rapeseed.
European Union policies needed to change to encourage farmers to plant more rapeseed. Price support should be doubled to 90 euros a tonne and subsidies should be extended to new EU members.
"There is great potential for rapeseed cultivation in Eastern European countries," Diester told the conference, organised by F.O. Licht and Spanish industrial group Abengoa
Current EU rapeseed production is 14 million tonnes and that should grow to 18 million tonnes a year by 2009 or 2010.
"It all depends on the price relative to wheat, which competes for the same land. If we can have a rapeseed price that is 2.4 or 2.5 times the price of wheat at the farm gate it will happen," he said.
Both Nicol and Ramon de Miguel, president of the European Bioethanol Fuel Association, said it was obvious the European Commission would have to raise its targets for the proportion of ordinary petrol and diesel that should be replaced by CO2-free alcohol or edible oil based alternatives. The current target is 5.75 percent by 2010.
De Miguel said his association was proposing targets of 10 percent by 2015, increasing to 25 percent by 2030.
"We believe these targets are achievable in terms of availability of land and raw materials," he told the conference.
Bioethanol fuel, which can be blended with gasoline to reduce CO2, is typically made from maize in the United States and from sugar cane in Brazil, the two biggest producers. In Sweden, refiners use wine alcohol as their raw material, while in Spain the main producer uses maize and other grains.
The EU is due to review its non-binding 5.75 percent target this year and consider whether to make targets mandatory.
Increasing production of biofuels is part of the EU's efforts to reduce emissions of CO2 as a signatory to the Kyoto protocol, an agreement between most of the world's industrialised countries to cut greenhouse gas production in a bid to slow global warming.
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