• VW boss and bank doubt ‘first generation’ biofuels

    The head of Volkswagen has criticised tax concessions for biofuels, at the same time as a new report from the banking sector casts doubt on the sustainability of such fuels and the EU’s current targets for increasing the use of biofuels in transport.

    Bernd Pischetsrieder, VW’s chief executive, said the “first generation fuels” derived from food crops were not sustainable, and the EU should stop giving them favourable tax treatment. He said it should instead use the money to encourage the development of “second generation biofuels” which he believes have much greater potential to reduce greenhouse gas emissions.

    His views are largely supported by “Biofuels – transporting us to a fossil-free future?”, a report from a leading Swiss private bank, Bank Sarasin. Warning of “substantial social and environmental impacts” it says biodiesel and bioethanol are not always as environmental and socially compatible as their “bio” label suggests.

    The report is particularly concerned about the amount of biofuels that would need to be imported for the EU to meet its current target of 5.75% of transport fuels coming from biomass by 2010, a target likely to rise to 8% by 2015. It has concerns about the environmental impact of cultivating large tracts of monoculture energy crops, and says employment and social conditions in developing countries are sometimes “critical”, with land for fuel crops often taken from land previously used for growing food.

    As a result, it places “the present limit for the environmentally and socially responsible use of first generation biofuels at 5% of current transport consumption in the EU and US” – effectively dismissing EU aspirations to raise the limit above 5%. But it does say there may be more potential for second generation of biofuels.

    ‘Hype’ over biofuels

    The Danish environment minister has criticised what she calls “the hype over biofuels” and says she is buying a diesel car.

    Connie Hedegaard said: “People think that just because something gets a ‘bio’ label then it must be green, but if a non-biofuel car is equipped with a particle filter, it is just as good.”

    This news story is taken from the September 2006 edition of T&E Bulletin.