France may reverse on biofuels following food, environmental sector protests

In France, the central government is considering a reversal of its biofuels policy because of protests from environmental and food-related groups. The government is reported to have asked the French energy agency, ADEME, to review French policy in light of protests and advances in second-generation biofuels.

France had previously set a policy that 7 percent of all fuels must come from renewable sources by 2010, and 10 percent by 2015 — ahead of the requirements of new EU laws.

Last November, the French Government began withdrawing support for ethanol when it floated a plan to wind down ethanol subsidies. France had offered a lower tax on ethanol-blended fuel, which makes it competitive with gasoline.

In a related move, the European Union reduced subsidies late last year 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.

Despite the waning support from government, Ernst & Young’s Biofuels Country Attractiveness Indices for 2007 ranked France second for biodiesel and fourth for ethanol. Initiatives such as the Grenelle de l’environment scheme, which sets a CO2 reduction goals, were credited with helping to create an attractive investment environment.