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Destructive Commission policy on ethanol to result in loss of energy security, loss of tens of thousands of jobs and increased costs to consumers


21 Sep 2016


Agriculture & Food
Science & Policymaking
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Destructive Commission policy on ethanol to result in loss of energy security, loss of tens of thousands of jobs and increased costs to consumers
Ideological bias instead of scientific approach.
Budapest, Wednesday September 21st, 2016: Destructive policy towards the ethanol industry in Brussels will continue to drive away billions of Euros in investments and cost rural communities tens of thousands of jobs. “The negative impact of these policies on Hungarian GDP alone we estimate at €1billion,” Mark Turley, CEO of Ethanol Europe, said in Budapest today in response to the European Commission’s new Low-Emission Mobility Strategy. Ethanol Europe is a leading EU ethanol producer that is heavily invested in Hungary.
“Since 2008 the Commission has progressively undermined the conventional ethanol industry by taking policy direction from ideology and dismissing science. Ethanol’s sustainability, value to rural communities and its value as the lowest cost carbon abatement technology in the transport sector has been proven beyond doubt.  And in the face of those facts, the Commission has proposed to abolish the entire industry, and not even provided a reason,” he said.
“If implemented, we project that the Commission’s policy would result in the permanent loss of 133,000 rural jobs supported by the ethanol industry,” Mr Turley added.
Paradoxically, the Commission’s Low-Emission Mobility Strategy identifies biofuels as the most important technology for reducing emissions in road transport.  It shows that by 2050 liquid biofuels would constitute a massive 61% of alternative fuels, while electric cars would achieve just 16%. “The Commission has been finally forced to admit that biofuels are the most important technology for emission reductions.”, Mr Turley said.
The new strategy envisages replacing the existing ethanol industry with advanced biofuel plants. Low levels of confidence in policy stability have so far caused advanced biofuel investors to flee Europe. Restoring investment confidence is a major challenge. “Incentives and policy support are essential to develop an EU advanced biofuel industry. However, the Commission’s new strategy lacks realism, further undermines confidence and is incapable of delivering the emission reduction targets set out.” 
“The ultimate irony is the Commission’s admission that the strategy will increase emissions from road transport by 13% in 2030 and 15% by 2050 over the benchmark year of 1990.  That is in large part because it sees biofuels as replacing other biofuels rather than replacing oil, resulting in effective support for continued use of fossil oil.”
“The scale of advanced biofuel development proposed is extraordinary with consequent high costs to taxpayers and consumers. Investment of over €100 billion and hundreds of such plants would be needed to meet the Commission's ambitious 2030 advanced biofuel scenario. The strategy implicitly, and wrongly, assumes that most of this will come from the same entrepreneurs, private equity funds and banks that have been burned by Brussels' policy u-turns over the past decade.”  
At the core of the problem is the Commission’s refusal to differentiate between biofuels.  This tactic is used to blacken ethanol’s standing.  The result is that the reputation of ethanol, a clean sustainable fuel, has been tarnished by the very negative impacts of palm oil biofuels without any justification.  Contrary to the Commission’s misleading approach, ethanol is currently formally certified to save up to 90% in GHG emissions compared to fossil fuels.  It also substantially reduces emissions of UFP’s (Ultra-Fine Particles) and cancer causing octane enhancers in petrol such as MTBE.
 “To date, our operations have saved 1.5 million tons of fossil fuel gases from polluting our atmosphere. We buy a million tons of corn from local farmers in Hungary every year. Our employees have quality jobs in a totally rural environment and we support over 2,000 jobs in the region. We use only sugar in making ethanol and strengthen European food security by increasing protein in the food chain.  Why anyone would want to abolish this industry is beyond me.”
 “We pledge to fight the European Commission every step of the way and to stop their plan to abolish our industry. We have received strong support from farmer suppliers in fighting the Brussels bureaucracy that is detached from the realities of Europe’s rural communities. We have also been encouraged by support from the Hungarian government and MEPs in Brussels.”    
Mr Turley was speaking on the occasion of the Agro-Inno Show sponsored by the company and attended by 1,000 farmers, customers and suppliers near the company’s ethanol refinery in Tolna County, Hungary.
Editors Notes:
Losses generated by European Commission’s ambitious Low Carbon Mobility Strategy:
The Commission’s objective of abolishing the conventional ethanol industry would have enormous negative costs for the industry, jobs, farmers, the climate and the European economy. In addition to the permanent loss of 133,000 rural generated jobs supported by the ethanol industry, EERL estimates that by 2030 losses every year could be as high as:
  • 30m tonnes of feed corn and feed wheat demand for Europe’s farmers
  • €4bn in lost income for farmers
  • 13m tonnes of CO2 saving, the equivalent of keeping 8m extra cars on the road
  • €8bn in revenue from ethanol that would be replaced by biofuels that are mostly more expensive and in some cases less environmentally friendly
  • 15bn litres of ethanol that has up to 90% GHG emission savings compared to petrol
  • 13m tonnes of high quality animal feed that increases the amount of protein in the feed chain and reduces Europe’s protein deficiency.
Joe Murray
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