(Codecision procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2001) 547(1)),

–   having regard to Article 251(2) and Article 175(1) of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C5&nbhy;0684/2001),

–   having regard to Rule 67 of its Rules of Procedure,

–   having regard to the report of the Committee on Industry, External Trade, Research and Energy and the opinions of the Committee on Economic and Monetary Affairs, the Committee on the Environment, Public Health and Consumer Policy, the Committee on Agriculture and Rural Development and the Committee on Regional Policy, Transport and Tourism (A5&nbhy;0244/2002),

1.  Approves the Commission proposal as amended;

2.  Asks to be consulted again should the Commission intend to amend the proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council and Commission.

(1) OJ C 103 E, 30.4.2002, p. 205.

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 175(1) thereof,

Having regard to the proposal from the Commission(1),

Having regard to the opinion of the Economic and Social Committee(2),

Having regard to the opinion of the Committee of the Regions(3),

Acting in accordance with the procedure laid down in Article 251 of the Treaty(4),

Whereas:

(1)  The European Council meeting at Gothenburg on 15 and 16 June 2001 adopted a Community strategy for sustainable development consisting in a set of measures, which include the development of biofuels.

(2)  Natural resources, and their prudent and rational utilisation as referred to in Article 174(1) of the Treaty, include oil, natural gas and solid fuels, which are essential sources of energy but also the leading sources of carbon dioxide emissions.

(3)  The net contribution of climate change gases throughout a fuel's life cycle is a crucial factor. This should be taken into account in the definition of climate-neutral fuels and be a driving force in the development of new products and production processes. It may prove possible to produce fuels from sources other than biomass and still reduce net emissions of climate change gases significantly.

(4)  However, there is a wide range of renewable biomass that could be used to produce biofuels, deriving from agricultural and forestry products, as well as residues and waste from forestry and the forestry and agrifoodstuffs industry. In addition, it is also possible to obtain by-products which are rich in vegetable protein for animal fodder.

(5)  The transport sector accounts for more than 30% of final energy consumption in the Community and is expanding – a trend which is bound to increase, along with carbon dioxide emissions, and this expansion will be greater in percentage terms in the candidate countries following their accession to the EU.

(6)  The Commission White Paper entitled "European transport policy for 2010: time to decide"(5) expects CO2 emissions from transport to rise by 50% between 1990 and 2010, to around 1 113 billion tonnes, the main responsibility resting with road transport, which accounts for 84% of transport-related CO2 emissions. From an ecological point of view, the White Paper therefore calls for dependence on oil (currently 98%) in the transport sector to be reduced by using alternative fuels such as biofuels.

(7)  Greater use of biofuels for transport forms a part of the package of measures needed to comply with the Kyoto Protocol, and of any policy package to meet further commitments.

(8)  Biofuels constitute an interesting tool, provided that the agricultural crop involved is subject to the principles of crop rotation in a multicrop context.

(9)  Increased use of biofuels for transport, without ruling out other possible alternatives to fossil fuels, including LPG, is one of the tools with which the Community can reduce its energy dependence and influence the global fuel market for transport and hence the security of energy supply in the medium and long term. However, this argument should not detract from the importance of compliance with existing Community legislation on fuel quality, vehicle emissions and air quality.

(10)  Biofuel production technology is highly advanced with the result that the engines of vehicles currently in circulation in the EU can use a 5% biofuel blend without any problem. The most recent technological developments make it possible to use higher percentages of biofuel in the blend. Some countries are already using biofuel blends of 10% and higher.

(11)  This Directive is part of the proposed Community strategy for promoting alternative fuels. It aims to promote the secure supply of energy in Europe and address the environmental consequences of increasing road transport. Support for other alternative fuels which can help fulfil these aims, such as LPG, CNG, LNG and DME, should therefore be encouraged.

(12)  The research policy pursued by the Member States on increased use of biofuels should include kerosene in the relevant programmes in order to envisage, wherever technically possible and satisfactory in terms of security, the use of biofuels blended with kerosene, especially for air transport.

(13)  Research policy on biofuels and alternative fuels should be supported and consolidated at both Community and national level in view of the potential environmental, economic and social benefits which the European Union may derive from biofuels. The research policy should include all types of fuels and cover all means of transport and engine designs, as well as studies on non-technical measures (improvement of traffic flow, adapting means of transport, etc.).

(14)  Captive fleets offer vast potential for research and the gradual introduction of biofuels. They offer the potential use of a high concentration of biofuels. In some cities captive fleets are already operating on pure biofuels which help to improve air quality in urban areas. When put on sale, fuels containing more than 5% of biofuels should be clearly labelled.

(15)  The proposed measures are a first step towards a comprehensive EU alternative fuels strategy. Drawn up within the context of a comprehensive EU alternative fuels strategy, the Commission Communication on alternative fuels for road transportation and on a set of measures to promote the use of biofuels(6) is incomplete without adequate consideration of a diverse mix of alternative fuels, including LPG, CNG, LNG and DME.

(16)  Promoting the use of biofuels in transport constitutes no more than a step towards the more efficient use of biomass, which will enable the further development of biofuels, and, in particular, the hydrogen sector, from biomass.

(17)  The research policy pursued by the Member States relating to increased use of biofuels should incorporate the hydrogen sector to a significant degree and promote it with a view to the Sixth Framework Programme of Research and Development.

(18)  New types of fuel must conform to recognised technical standards if they are to be accepted to a greater extent by customers and vehicle manufacturers and hence penetrate the market. Technical standards also form the basis for requirements concerning emissions and the monitoring of emissions. New types of fuel may find it difficult to meet current technical standards, which, to a large extent, have been developed for conventional fossil fuels. The Commission and standardisation bodies should monitor developments and actively adapt and develop standards so that new types of fuel can be introduced, whilst maintaining environmental performance requirements.

(19)  Nevertheless, the blending of bioethanol and petrol produces an increase in volatility which, although it is not detrimental to the technical performance of vehicles or the environment, results in the volatility limits laid down in European Parliament and Council Directive 98/70/EC of 13 October 1998 relating to the quality of petrol and diesel fuels(7) being exceeded in non-Arctic countries.

(20)  Bioethanol and biodiesel, when used for vehicles in pure form or as a blend, should comply with the quality standards laid down to ensure optimum engine performance. Accordingly, the European Committee for Standardisation (CEN) should lay down standards for the EU as a whole.

(21)  Promoting the use of biofuels in keeping with sustainable farming and forestry practices laid down in the rules governing the common agricultural policy will create new opportunities for sustainable rural development in a common agricultural policy geared more to the European market and to respect for flourishing country life and multifunctional agriculture. Cultivation of plants for use in the production of biofuels should be integrated into current cultivation programmes, in accordance with the principle of crop rotation, and should not lead to the creation of single-crop systems. The multifunctional role of agriculture will come into play and create jobs in rural areas. In order to ensure sustainable farming practices, a set of clear environmental criteria for the production of liquid biofuels should be established. New possibilities would also be opened up for the candidate countries, which would accelerate the EU enlargement process.

(22)  In its resolution of 8 June 1998(8) and its conclusions of 5 December 2000 the Council endorsed the Commission's Strategy and Action Plan for Renewable Energy Sources and requested specific measures in the biofuels sector.

(23)  The Commission Green Paper entitled "Towards a European strategy for the security of energy supply"(9) sets the objective of 20% substitution of conventional fuels by alternative fuels in the road-transport sector by the year 2020.

(24)  Alternative fuels will only be able to achieve market penetration if they are widely available and competitive.

(25)  In its resolution of 18 June 1998(10) the European Parliament called for an increase in the market share of biofuels to 2% over five years through a package of measures, including tax exemption, financial assistance for the processing industry and the establishment of a compulsory rate of biofuels for oil companies.

(26)  The optimum method for increasing the share of biofuels in the national and Community markets depends on the availability of resources and raw materials, on national and Community policies to promote biofuels and on tax arrangements.

(27)  National policies to promote the use of biofuels should not lead to prohibition of the free movement of fuels that meet the harmonised environmental specifications as laid down in Community legislation.

(28)  The increased use of biofuels should be accompanied by a careful analysis of the environmental effects of the cultivation, processing and use of raw materials. The increased use of such fuels appears to be sensible only when the environmental effects have clear advantages over the use of conventional fuels. In particular, land use, intensification of agriculture, compatibility with an alternative, sustainable use of land, protection of water courses, energy efficiency, potential emission of greenhouse gas, combustion behaviour and particle formation should all be investigated.

(29)  Promotion of the production and use of biofuels will contribute to a reduction in energy dependency and in emissions of greenhouse gases. In addition, biofuels may be used in existing motor vehicles and use the current motor vehicle fuel distribution system. Accordingly, no expensive investment in infrastructure or engine redesign will be necessary.

(30)  Since the objective of the proposed action, namely the introduction of general principles to encourage biofuels to be marketed and distributed, cannot be sufficiently achieved by the Member States by reason of the scale of the action, and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.

(31)  At present not all the biofuels available on the market meet a high level of environmental efficiency criteria. Their production in some cases involves considerable energy expenditure and greenhouse gas emissions. However, technological developments may lead to improvements in this area. Therefore research and technological development in the field of the sustainability of biofuels should be promoted.

(32)  An increase in the use of biofuels should be accompanied by a detailed analysis of the environmental, economic and social impact in order to decide whether it is advisable to increase the proportion of biofuels in relation to conventional fuels.

(33)  Provision should be made for the possibility of rapidly adapting the list of biofuels, the percentage of renewable contents, and the schedule for introducing biofuels in the transport fuel market, to technical progress and to the results of an environmental impact assessment of the first stage of introduction. In this connection, consideration should also be given to pure, cold-pressed vegetable oil, such as rapeseed oil, which does not undergo any chemical change and can thus be produced in an environmentally friendly way, and whose by-products also contain protein and can be used as animal feed. Account should also be taken of other alternative fuels such as LPG, CNG, LNG and DME, which are already used in the transport fuel market and which have all the necessary technology already in place for expansion, as well as a proven record of lower emissions of greenhouse gases and air pollutants.

(34)  Provision should be made for rapidly developing the quality standards for the biofuels to be used in the automotive sector, both as pure biofuels and as a blending component in conventional fuels. Although the biodegradable fraction of waste is an interesting source of biofuels, the quality standards should take account of possible contaminants present in the waste to avoid specific components damaging the vehicle and/or causing higher levels of emissions.

(35)  Encouragement of the promotion of biofuels should be consistent with security of supply and environmental objectives and related policy objectives and measures within each Member State.

(36)  For reasons of cost and of the overall environmental balance it is sensible in many cases to use biomass to generate heat or, where appropriate, electricity. The Commission should accordingly submit a proposal to promote such use at European level.

(37)  Since the use of biofuels above a certain concentration requires special adaptation of vehicles to avoid technical and safety problems, pure biofuels or blended fuels with a concentration of biofuels exceeding the maximum limit which can be tolerated by existing vehicles should be clearly and visibly labelled at the fuel delivery station.

(38)  The need for biofuels in the European Union and thus in other countries could open up a new market for innovative agricultural products.

(39)  Since the measures necessary for the implementation of this Directive are measures of general scope within the meaning of Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission(11), they should be adopted by use of the regulatory procedure provided for in Article 5 of that Decision,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

This Directive sets a minimum percentage of biofuels to replace diesel or gasoline for transport purposes in each Member State.

Article 2

1.  For the purpose of this Directive, the following definitions shall apply:

2.  The products listed in Part A of the Annex are examples of current biofuels. The list is indicative, and the fuels listed may be promoted only if they contribute to a significant reduction of greenhouse gas emissions during the whole life cycle of the biofuels compared to the greenhouse gas emissions during the whole life cycle of the fossil fuels they replace.

Article 3

1.  Member States shall ensure that the minimum proportion of biofuels sold on their markets is 2%, calculated on the basis of energy content, of all gasoline and diesel sold for transport purposes on their markets by 31 December 2005 and that this share increases in accordance with the schedule set out in Part B of the Annex.

This report shall be published. The Commission shall take these reports into account in the report which it submits to the European Parliament and to the Council pursuant to Article 6(3).

2.  Any further increases in biofuels shall be subject to a detailed assessment of a full analysis of their life-cycle and their benefits in terms of CO2 and sustainable farming practices to be carried out by the Commission by 30 June 2006. Activities referred to in paragraph 1 shall be carried out in close collaboration with all stakeholders.

3.  Member States may promote the technological development of biofuel production and of the companies involved in its production using financial instruments for research, the environment and regional development.

4.  Biofuels may be made available in any of the following forms:

5.  Member States shall monitor the effect of the use of biofuels in diesel blends above 5% by non-adapted vehicles and shall ensure that such diesel fuel is clearly and visibly labelled at fuel delivery stations. Where appropriate, Member States shall take measures to ensure compliance with the relevant Community legislation on emission standards, in line with the procedure laid down in paragraphs 1, 2 and 3.

6.  Member States shall give priority to promoting the use of biofuels by public/collective transport modes, such as trains, buses, taxis and carsharing.

Article 4

In the measures that they take, Member States shall consider the overall environmental balance of the various types of biofuels and give priority to the promotion of those biofuels with a very good environmental balance.

Article 5

1.  In respect of crops intended for the production of biofuels, whether or not they receive aid from the common agricultural policy, Member States shall adopt the environmental measures that they consider appropriate in view of the particular situation of the farmland used or the production concerned and that reflect the potential effects of those activities on the environment.

2.  Member States shall determine the penalties that they consider appropriate and proportionate to the seriousness of the environmental repercussions of failure to comply with the environmental requirements referred to in paragraph 1.

3.  Paragraphs 1 and 2 of this Article shall apply without prejudice to Article 3 of Council Regulation (EC) No 1259/1999 of 17 May 1999 establishing common rules for direct support schemes under the common agricultural policy(12).

Article 6

1.  Member States shall report to the Commission, before 1 July each year, on the measures adopted to ensure compliance with the objectives laid down in Article 3 and in section B of the Annex, on the total sales of transport fuel and the share of biofuels in such sales for the preceding year. The first report shall be submitted before 1 July 2004.

2.  Member States shall inform consumers through public bodies about the possibilities of using biofuels.

3.  By 31 December 2006 at the latest, and every two years thereafter, the Commission shall draw up an evaluation report for the European Parliament and for the Council on the progress made in the use of biofuels in the Member States, on the economical aspects and on the environmental impact of the current situation and of further increases in the share of biofuels. To this end, the Commission shall devise a specific environmental impact assessment incorporating a comprehensive life-cycle analysis of the use of biofuels. In that report, the Commission must pay particular attention to environmental aspects, especially variations in water quality, soil erosion, use of inputs and pesticides, and the preservation of natural habitats, flora and fauna, and to the consequences of the changes caused by the biofuels connected with the production of biomass. That report may also give consideration to the possibilities for the introduction of a selective tax on the various biodiesels, on the basis of environmental criteria. On the basis of this report, the Commission shall propose to the European Parliament and the Council, where appropriate, new targets for biofuels as laid down in Article 3 possibly by introducing a minimum blending percentage.

4.  Biodiesel end product intended for fuel shall comply with standard PREN 14214 of the European Committee for Standardisation on fatty acid methyl esters (FAME) for diesel engines.

5.  In cooperation with the European Committee for Standardisation, the Commission shall propose appropriate standards for bioethanol. The Member States shall apply internationally recognised standards for bioethanol until these standards are available, providing that final blends always meet existing fuel quality legislation, such as Directive 98/70/EC.

Article 7

1.  Part A of the Annex may be adapted to technical progress in accordance with the procedure referred to in Article 8(2), taking into account fuel quality and purity and vehicle compatibility.

2.  In accordance with the procedure under Article 8, the missing specifications for biofuels shall be set without delay, to avoid problems arising with the use of biofuels in relation to existing fuel and engine specifications.

All biofuels marketed in the EU must conform to the requirements of Directive 98/70/EC, CEN standards and the requirements of the Community motor vehicle exhaust legislation.

3.  The schedule of Part B of the Annex may be adapted in accordance with the procedure referred to in Article 8(2), on the basis of technical development of biofuel technologies, market penetration and applications in means of transport.

4.  When adapting the Annex pursuant to paragraphs 1 and 3, environmental efficiency criteria shall be set for the use of biofuels.

5.  On the basis of the information provided by the Member States pursuant to Article 6(1), the Commission may exempt from the objectives those Member States which have particular difficulties in meeting them and which so request. Such exemptions may not exceed two years.

As a condition of obtaining such an allowance, Member States shall provide the Commission with an action plan demonstrating how they will meet scheduled targets as they will apply at the time of the expiry of the exemption. A Member State may be granted an exemption only once.

Article 8

1.  The Commission shall be assisted by the committee instituted by Article 4(2)of Council Decision 1999/21/EC, Euratom(13).

2.  Where reference is made to this paragraph, the regulatory procedure laid down in Article 5 of Decision 1999/468/EC shall apply, in compliance with Article 7 and Article 8 thereof.

3.  The period provided for in Article 5(6) of Decision 1999/468/EC shall be three months.

Article 9

1.  Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 2004 at the latest. They shall forthwith inform the Commission thereof.

When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

2.  Member States shall communicate to the Commission the provisions of national law which they adopt in the field covered by this Directive.

Article 10

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities.

Article 11

This Directive is addressed to the Member States.

Done at,

For the European Parliament For the Council

The President The President

(1) OJ C 103 E, 30.4.2002, p. 205. (2) OJ C (3) OJ C (4) Position of the European Parliament of 4 July 2002. (5) COM(2001) 370. (6) COM(2001) 547. (7) OJ L 350, 28.12.1998, p. 58. Directive as last amended by Commission Directive 2000/71/EC (OJ L 287, 14.11.2000, p. 46). (8) OJ C 198, 24.6.1998, p. 1. (9) COM(2000) 769. (10) OJ C 210, 6.7.1998, p. 215. (11) OJ L 184, 17.7.1999, p. 23. (12) OJ L 160, 26.6.1999, p. 113. Regulation as last amended by Regulation (EC) No 1244/2001 (OJ L 173, 27.6.2001, p. 1). (13) OJ L 7, 13.1.1999, p. 16.

A.  EXAMPLES OF POSSIBLE BIOFUELS AND PERCENTAGE OF RENEWABLE CONTENTS

"Bioethanol": ethanol produced from biomass and/or the biodegradable fraction of waste, to be used as biofuel;

"Biodiesel": a diesel quality liquid fuel produced from biomass, including animal fats and tallow from rendering plants or used fried oils, in compliance with the prEN 14214 standard for FAME (fatty acid methyl ester), to be used as biofuel;

"Biogas": a fuel gas produced by the anaerobic fermentation of biomass that can be purified to natural gas quality, to be used as biofuel;

"Biomethanol": methanol produced from biomass, to be used as biofuel;

"Biodimethylether": dimethylether produced from biomass, to be used as biofuel;

"Biohydrogen": hydrogen produced from biomass to be used as biofuel;

"BioETBE (ethyl-tertio-butyl-ether)": ETBE produced on the basis of bioethanol.

The percentage of volume bioETBE that is calculated as biofuel is 45%.

B.  MINIMUM AMOUNT OF SOLD BIOFUEL AS A PERCENTAGE OF SOLD GASOLINE AND DIESEL