Biofuel Subsidies

EU biofuel policy and palm oil

The report seeks to address one of the blind spots in the biofuel policy making, namely the increased use of palm oil in biodiesel produced and consumed in the European Union. According to Oil World data, the EU biofuels industry has increased its use of palm oil as biodiesel feedstock by 365 per cent over 2006–2012, from 0.4 to 1.9 million tonnes per year. The additional demand can be linked primarily to the growth in biodiesel production stimulated by government policies during the same period. If the EU does not cut its current subsidies to biodiesel, it may, in an indirect way, lead to the cutting down of more rainforests, the conversion of more forest and peat land for palm oil plantations, and the emission of more carbon into the atmosphere.

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