The European Commission will hold a discussion on whether to change the EU Energy Policy by reducing its current requirement on the use of crop-based biofuels from 10% to 5%. Such a decision is expected to push the existing biofuels’ factories into bankruptcy, while the price of rapeseed would drop by 30%-40%, reported delfi.lt, referring to „Verslo žinios”.
“Such European Commission decision would come as a big shock to us, while the sector has already been in downturn for the past few years. The revenue is very low,” explains Arūnas Zubas, the CEO of Mestilla UAB.
Since 2009, when many new biofuel companies were set up in Europe, Mestilla UAB has been running with very limited revenue.
“We are already on the brink of bankruptcy. If the new EC decision is approved, we will be forced to close down,” commented Edvardas Čaplinskas, the Director of Rapsoila Ltd.
According to Zubas, if the EU biofuel policy is changed, the market price of rapeseed will fall by at least 20-30 per cent, simply because the demand for biofuels will be very limited. Lithuanian farmers will experience losses up to 1 billion litas (based on current market price of biofuel).
“This comes as very negative news as it will have significant implications for the Lithuanian agriculture, especially as the EU has been encouraging biofuels’ production over the past several years. Now this branch of agriculture is likely to be devastated together with all the investment in this area”, added the Minister of Agriculture, Kazys Starkevičius.
EU Commission to cap food-based biofuels in major shift (an article explaining EU’s decision)
Translated by Ieva Indriūnaitė