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Policy Department A: Economic and Scientific Policy ____________________________________________________________________________________________ The difference in import tariffs can be explained by the fact that biodiesel is considered to be an industrial product, while fuels made from crops, such as ethanol, are classified as agricultural goods in the World Customs Organisation’s Harmonised Coding System for commodities. The latter are subject to higher import tariffs in order to protect European farmers. The classification affects tariffs and options for national support in many ways. Given the fact that the EU will need to import considerable amounts of bioethanol in order to reach its 10% renewables in transport target (biodiesel, on the other hand may mostly come from domestic production), it may be advisable to push for a reclassification of bioethanol in order to allow for a reduction in tariffs. Brazil will be the country to benefit most from such a move, but it is also the country that produces the most emissions- efficient biofuel (ethanol from sugar cane). This is also reflected in [Al-Riffai et al. 2010], who find that a complete elimination of tariffs on biofuels, although leading to slightly higher ILUC effects, will reduce direct GHG emissions due to a switch towards more carbon efficient biofuels. The latter effect is expected to outweigh the former and [Al-Riffai et al. 2010] thus concludes that the overall emissions balance of abolishing tariffs on biofuels is positive. In any case, the EU needs to ensure that it favours those biofuels that reduce greenhouse gas emissions the most (e.g. in the Energy Taxation Directive). In addition, there are several arguments that call for increasing compatibility of biofuels- standards. Discrepancies between these standards constitutes a technical barrier to trade and a harmonisation, e.g. within the framework of the tripartite initiative (Brazil, EU, US), would facilitate the increasing role of biofuels in regional markets, as well as support “both exporters and importers of biofuels by helping to avoid adverse trade implications in a global market” [Tripartite Task Force 2007]. 3.3. Future EU Research and Innovation Policy for renewable energy The idea of using the EU budget or the EIB to contribute significantly to R&D in Europe is rather novel. Originally, research was concentrated on specific sectors originating from the Coal and Steel and EURATOM treaties. On energy, finance was limited to objectives of EURATOM. Research and Development as a public policy for promoting growth at European level has not been an issue until the Appearance of the Lisbon Strategy for Growth and Jobs in 2000. With the Lisbon Agenda for jobs and growth, fostering innovation has become a key objective of the EU. This central position of R&D at EU level is allowing the rather modest R&D budget to increase in size and relevance, and the formerly lose policy on R&D to take central stage and develop into a fully fledged EU policy. The recently published EU 2020 startegy by the European Commission agains calls for a substantial reinforcement of R&D coordination and expenditure in the European Union [COM, 2010]. The central funding mechanism at EU level for research and innovation comes through the Framework Programmes, the first one originates from 1984 and today we are at the Seventh Framework Programme FP7. Today’s FP7 is providing a particularly important turning point to the strategy of the Framework Programmes. The FP7 coincides with the consolidation of the European Research Area objective and the emergence of a number of new R&D EU institutions. The EU’s research strategy is based on the development of the European Research Area (ERA) initiative, which focuses on increasing the number of scientists, the level of research funding (aiming to reach 3% of the EU’s GDP) and the quality of research in Europe, taking advantage of the economies of scale created by cross border cooperation. IP/A/ITRE/ST/2009-11 & 12 86 PE 440.278PDF Image | Policy Department Renewable Technologies
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