London (Platts)--14Sep2007

An EU-wide carbon tax would be the ideal way to promote renewables and
energy efficiency to meet the EU's proposed 2020 targets, the European Biomass
Association secretary-general, Jean-Marc Jossart told Platts Thursday.

     "It would be a breakthrough in the EU," he said, as it would not target
specific technologies but create equally positive conditions for all
renewables and energy efficiency measures.

     "The minimum energy taxes we have now are too low to have any effect. We
would like higher taxes on fossil fuels," he said. Such a tax could run in
conjunction with the EU's emissions trading scheme, he said, as the ETS only
covered large energy installations and not smaller players or the transport
sector.

     But the EU has traditionally struggled to fix harmonized energy taxes, as
they require member states' unanimous agreement--something which is becoming
ever more difficult as the EU expands.
     
     BIOMASS GROWING FAST, BUT NOT FAST ENOUGH

     The EBA presented statistics Thursday showing that biomass was growing
fast, but not fast enough to meet the EU's renewables targets. Biomass
accounted for about two-thirds of all renewables in the EU, it said, and was
the fastest growing renewable in absolute terms in recent years.

     It grew from 44.8 million mt of oil equivalent in 1995 to 72.3 million
mtoe in 2004, while wind grew from 0.4 million mtoe to 5 million mtoe, and
hydro remained stable at 26 million mtoe.

     But biomass should have grown by more than twice as much to be on track
to meet the EU's non-binding 2010 target of 12% of energy from renewable
sources, said the EBA.

     "Biomass for electricity and fuels is growing faster than for heat," said
Jossart, as a result of EU laws promoting renewable electricity and biofuels.

     "But heat accounts for 50% of final energy use--you can't neglect it."
The EBA estimates that the biomass sector could more than triple to 220
million mtoe by 2020, with most of the growth potential in agriculture rather
than forests.

     It is calling on the EC to set an indicative target of 25% of EU heat to
come from renewables by 2020 in the new draft EU renewables law expected early
December. This law is to set out the binding national targets for each of the
27 EU member states to reach the overall EU renewables target of 20% by 2020
agreed by EU leaders in March.

--Siobhan Hall, siobhan-hall@platts.com