237
subsidy for using palm oil for electricity, because of negative publicity regarding the
sustainability of palm oil production in Malaysia and Indonesia. EU leaders became
sensitive to criticism that their biofuel promotion policy might be leading to deforestation and higher food prices (Harrison 2008). In the response to this, the EU
considered revising or reinterpreting the standard (Euractiv.com 2008; Reuters
2010). The EU relaxed the biofuel blending mandate and started working on a possible biofuel certification considering environmental impacts (Al-Riffai et al. 2010).
In 2009, the EU adopted the Renewable Energy Directive (2009/28/EC) which
established a target of 10% of the energy used for transport within the EU to come
from renewable sources. It was understood that a significant portion of this would
come from biofuels. However, the Directive also imposed sustainability requirements (Spiegel 2011). In order to count toward the target, biofuels must not be
produced at the expense of primary forests or carbon-rich soils such as peatlands
and must demonstrate a savings of greenhouse gasses of at least 35% compared to
fossil fuels (RSB 2011, 3). Therefore, while the risk of large-scale imports of unsustainably produced biofuels was reduced, the EU will probably remain a major
importer. It is not likely to become a major exporter of biofuels and instead will
compete for imports with other countries with high blending mandates.
As of 2012, the biofuel share of transport fuel reached only 4.65%, far short of
the 10% target, and much of that had to be imported (USDA 2011). The EU probably will not have sufficient feedstock production capability by 2020 to reach its
expected 6.6%, biodiesel target blend, so net biodiesel imports are expected to be
more than 2 billion liters, and about 2.3 billion liters of net ethanol imports will be
needed to reach the expected level of 8.2%, ethanol blend. Between 2008 and 2010,
the EU imported on average 1.5 billion liters of ethanol and 1.6 billion liters of
biodiesel (OECD/FAO 2011). In the meantime, vegetable oils for human consumption and industrial use (e.g., cosmetics) have to be imported, so imports of biofuels
or vegetable oils for use as biodiesel will compete with these uses (Jank et al. 2007).
14.5.2 USA
In the USA, approximately 95% of bioethanol is made from maize, and 90% of
biodiesel is made from soybeans. Although ethanol from maize in the USA is generally more costly to produce than sugarcane used for ethanol in Brazil, it was cheaper
in 2000 when sugar prices in Brazil hit their peak, while US maize prices dropped.
US production and consumption of ethanol have accelerated in recent years. In
2008, nearly 30% of maize produced in the USA was used for ethanol, and 20% of
soybean production was used for biodiesel. High blending targets made the USA the
world’s largest ethanol importer, since it was not able to meet these targets solely
through domestic production. In 2006, the USA accounted for more than half of
global ethanol imports, and Brazil accounted for more than half of US imports.
The USA also has imported ethanol from Caribbean Basin Initiative (CBI) countries which can enter duty-free. Although the USA has adopted policy measures to
14 A Regional Perspective on Biofuels in Asia
subsidy for using palm oil for electricity, because of negative publicity regarding the
sustainability of palm oil production in Malaysia and Indonesia. EU leaders became
sensitive to criticism that their biofuel promotion policy might be leading to deforestation and higher food prices (Harrison 2008). In the response to this, the EU
considered revising or reinterpreting the standard (Euractiv.com 2008; Reuters
2010). The EU relaxed the biofuel blending mandate and started working on a possible biofuel certification considering environmental impacts (Al-Riffai et al. 2010).
In 2009, the EU adopted the Renewable Energy Directive (2009/28/EC) which
established a target of 10% of the energy used for transport within the EU to come
from renewable sources. It was understood that a significant portion of this would
come from biofuels. However, the Directive also imposed sustainability requirements (Spiegel 2011). In order to count toward the target, biofuels must not be
produced at the expense of primary forests or carbon-rich soils such as peatlands
and must demonstrate a savings of greenhouse gasses of at least 35% compared to
fossil fuels (RSB 2011, 3). Therefore, while the risk of large-scale imports of unsustainably produced biofuels was reduced, the EU will probably remain a major
importer. It is not likely to become a major exporter of biofuels and instead will
compete for imports with other countries with high blending mandates.
As of 2012, the biofuel share of transport fuel reached only 4.65%, far short of
the 10% target, and much of that had to be imported (USDA 2011). The EU probably will not have sufficient feedstock production capability by 2020 to reach its
expected 6.6%, biodiesel target blend, so net biodiesel imports are expected to be
more than 2 billion liters, and about 2.3 billion liters of net ethanol imports will be
needed to reach the expected level of 8.2%, ethanol blend. Between 2008 and 2010,
the EU imported on average 1.5 billion liters of ethanol and 1.6 billion liters of
biodiesel (OECD/FAO 2011). In the meantime, vegetable oils for human consumption and industrial use (e.g., cosmetics) have to be imported, so imports of biofuels
or vegetable oils for use as biodiesel will compete with these uses (Jank et al. 2007).
14.5.2 USA
In the USA, approximately 95% of bioethanol is made from maize, and 90% of
biodiesel is made from soybeans. Although ethanol from maize in the USA is generally more costly to produce than sugarcane used for ethanol in Brazil, it was cheaper
in 2000 when sugar prices in Brazil hit their peak, while US maize prices dropped.
US production and consumption of ethanol have accelerated in recent years. In
2008, nearly 30% of maize produced in the USA was used for ethanol, and 20% of
soybean production was used for biodiesel. High blending targets made the USA the
world’s largest ethanol importer, since it was not able to meet these targets solely
through domestic production. In 2006, the USA accounted for more than half of
global ethanol imports, and Brazil accounted for more than half of US imports.
The USA also has imported ethanol from Caribbean Basin Initiative (CBI) countries which can enter duty-free. Although the USA has adopted policy measures to
14 A Regional Perspective on Biofuels in Asia