EU eases subsidies for biofuels after cultivation reaches 2 million hectare threshold level

The European Union reduced subsidies for biofuel crop cultivation after production reached the 2 million hectare threshold. Under the EU program, farmers may receive up to 45 euros per hectare devoted to biofuel cultivation, up to a total of 2 million acres, and 31.5 euros for  additional hectares.

The European Union (EU) increased biodiesel production to 1.2 billion gallons in 2006, up 54% from 2005, according to the European Biodiesel Board. The Board’s latest report shows 185 biodiesel plants in operation, and another 58 plants under construction in the EU. The EU has increased overall production more than 100% since 2004. Germany, France and Italy continue to dominate production, with Italy recently becoming a strong producer as well.
An IMF report released this week called for EU subsidies to be eliminated to alleviate pressure on global food prices.

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