Biofuel industry held back by debate over land

"The industry is being held back by a lack of robust discrimination between what is good and what is bad," Alwyn Hughes, chief executive of Yarm-based Ensus said, referring to the differing environmental footprints of biofuels.

The European Commission is due to report to the European Parliament later this year on a concept known as indirect land-use change (ILUC).

Biofuels are seen by advocates as a way to cut greenhouse gas emissions that contribute to climate change. There are concerns, however, that changes in land use caused by the expansion of biofuels may in some cases lead to the release of carbon stored in soil, offsetting any positive benefits.

Nine environment groups issued a report this week that concluded the EU's goal of getting 10 per cent of transport fuel from renewable sources by 2020 could accelerate climate change as well as deprive the poor of food.

A major strategic review of the EU's energy policy was issued yesterday.

The clearance of rainforests to allow for the expansion of crops such as palm oil, which can be used to make biodiesel, is often cited as one example of when biofuels could have a significant adverse impact on climate change.

"The uncertainty around this (the ILUC debate) clearly puts question marks over the growth of the industry but it is equally clear there are some very good biofuels out there," Mr Hughes said.

"The NGOs (environment groups) are really having a go at the people who are driving deforestation. I agree with them that they should be taken out of the (biofuels) mix," he said.

Mr Hughes said his company would need "a clear policy framework in order to allow us to invest".

"I think it is important the ILUC issue is resolved at the end of

the year clearly and crisply," he added.

Ensus runs one of Europe's largest biorefineries which has the capacity to make around 400 to 450 million litres of bioethanol a year from about one million tons of feed wheat.

The refinery entered commercial operation earlier this year and now regularly runs near capacity, Mr Hughes said.