New EU member states to receive subsidies for energy crops
We have written profusely on the hundreds of subsidy schemes and tax incentives for US energy farmers, which make American ethanol the world's most expensive and least competitive fuel (earlier post). But many other states, including the Chinese (earlier post) are supporting their nascent bioenergy sector too. The EU is of course no exception.
Yesterday, EU agriculture ministers decided to extend the energy crop premium introduced by the 2003 Common Agricultural Policy reform to the new Member States which currently do not benefit from it. The decision will give farmers in Bulgaria, the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Poland, Romania and Slovakia the chance to receive €45 per hectare (US$24/acre) for growing energy crops.
The Commission will extend the maximum area which can benefit from this aid to 2 million hectares from 1.5 million hectares at the moment.
In a further push to encourage the production of feedstocks for renewable energy production, the decision will also allow the Member States to grant national aid of up to 50 percent of the costs of establishing permanent crops on areas on which an application for the energy crop aid has been made.
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: energy crops :: subsidies :: EU ::
* The €45/hectare aid for energy crops was applied for the first time in 2004 to provide an incentive for farmers to grow the raw materials for biofuels. The area for which the direct payment for energy crops was claimed was between 1.2 and 1.3 million hectares in 2006, close to the limit of 1.5 m ha.
* The data on the development of bioethanol and biodiesel production as well as recently constructed capacities show a dramatic increase in the demand for energy crops within the next few years.
* The aid for energy crops is an incentive for farmers to produce crops for energy purposes rather than for food. Currently, 8 of the 10 "new Member States" (the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Poland, and Slovakia) which apply the SAPS are excluded from this aid for energy crops, while Malta and Slovenia may receive this aid up to the "phasing-in" level only.
* The review of the energy crops scheme has shown that it is appropriate to extend the aid for energy crops to all Member States as from 2007 and under the same conditions. Therefore the maximum guaranteed area should be increased proportionally.
* To strengthen the role of multiannual energy crops, the Member States will be entitled to grant national aid up to 50 % of the costs associated with establishing permanent crops for the areas which have been subject to an application for the aid for energy crops
In February, the Commission adopted an ambitious EU Strategy for Biofuels. Increased use of biofuels is expected to bring numerous benefits, by reducing Europe’s dependence on fossil fuel imports, reducing greenhouse gas emissions, providing new outlets for farmers and opening up new economic possibilities in several developing countries.
More information:
European Commission: Renewable energy: Commission welcomes Council agreement on extension of energy crop aid scheme to all Member States - Dec. 19, 2006
Planet Ark: EU New Joiners to Get Biofuel Crop Cash from 2007 - Dec. 20, 2006
Yesterday, EU agriculture ministers decided to extend the energy crop premium introduced by the 2003 Common Agricultural Policy reform to the new Member States which currently do not benefit from it. The decision will give farmers in Bulgaria, the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Poland, Romania and Slovakia the chance to receive €45 per hectare (US$24/acre) for growing energy crops.
The Commission will extend the maximum area which can benefit from this aid to 2 million hectares from 1.5 million hectares at the moment.
In a further push to encourage the production of feedstocks for renewable energy production, the decision will also allow the Member States to grant national aid of up to 50 percent of the costs of establishing permanent crops on areas on which an application for the energy crop aid has been made.
“The provision of renewable energy is a growing priority for the European Union. Farming can play a major role in providing the raw materials for bioethanol and biodiesel. The energy crop scheme has made a good start. Now it’s only fair that we give farmers in all Member States the chance to benefit from it. I am confident that this market can go from strength to strength.” Mariann Fischer Boel, Commissioner for Agriculture and Rural Development.Some background on the EU aid for energy crops and its productive effects:
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: energy crops :: subsidies :: EU ::
* The €45/hectare aid for energy crops was applied for the first time in 2004 to provide an incentive for farmers to grow the raw materials for biofuels. The area for which the direct payment for energy crops was claimed was between 1.2 and 1.3 million hectares in 2006, close to the limit of 1.5 m ha.
* The data on the development of bioethanol and biodiesel production as well as recently constructed capacities show a dramatic increase in the demand for energy crops within the next few years.
* The aid for energy crops is an incentive for farmers to produce crops for energy purposes rather than for food. Currently, 8 of the 10 "new Member States" (the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Poland, and Slovakia) which apply the SAPS are excluded from this aid for energy crops, while Malta and Slovenia may receive this aid up to the "phasing-in" level only.
* The review of the energy crops scheme has shown that it is appropriate to extend the aid for energy crops to all Member States as from 2007 and under the same conditions. Therefore the maximum guaranteed area should be increased proportionally.
* To strengthen the role of multiannual energy crops, the Member States will be entitled to grant national aid up to 50 % of the costs associated with establishing permanent crops for the areas which have been subject to an application for the aid for energy crops
In February, the Commission adopted an ambitious EU Strategy for Biofuels. Increased use of biofuels is expected to bring numerous benefits, by reducing Europe’s dependence on fossil fuel imports, reducing greenhouse gas emissions, providing new outlets for farmers and opening up new economic possibilities in several developing countries.
More information:
European Commission: Renewable energy: Commission welcomes Council agreement on extension of energy crop aid scheme to all Member States - Dec. 19, 2006
Planet Ark: EU New Joiners to Get Biofuel Crop Cash from 2007 - Dec. 20, 2006
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