Neste urges EU to relax curbs on biofuel feedstocks

what happened

Neste has asked the European Commission to loosen limits on biofuel raw materials that pose no threat to food supplies or forests, Seeking Alpha reported, citing Reuters. At present the Commission caps how much biofuel feedstock can be grown across Europe. Supporters see these fuels as a way to lower emissions and strengthen energy security, while critics link them to deforestation and higher food costs.

Neste argues that such worries do not extend to advanced biofuels made from crops sown between harvests or grown on degraded land. Samuel Maubanc, the company's head of public and regulatory affairs for EMEA, told the Argus Biofuels Europe conference in London on Tuesday that these intermediate crops could supply as much as 27 million tonnes in Europe, yet current certification rules shut out much of that potential.

why it matters

Feedstock volume limits shape production costs for biofuel makers and can ripple into agricultural markets. Seeking Alpha noted that crude oil has risen roughly 50% since the Iran war began in late February, sugar about 40%, and corn 3%. A looser regime would widen the raw-material base for the industry, but for now this is only the company's request and no decision has been made.

market impact

Biofuels and farm commodities: looser EU rules would widen the feedstock base, relevant to Neste, sugar and corn

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