New EU biofuels targets could lead to increased European food prices.

The European Commission proposal to impose a 10% binding target for biofuels share by 2020 will jeopardize food production and cause price increases, two EU food industry organizations said on January 9. The Association of Chocolate, Biscuit and Confectionery industries (CAOBISCO) and the margarine association (IMACE) urged the EU to abolish mandatory targets and seriously assess the situation to reduce the pressure on the food industry.

"This will damage the food industry by provoking a serious shortage of raw materials and a non-sustainable price increase," CAOBISCO and IMACE said in a statement. "Our key raw materials are increasingly being used for the production of biodiesel and bioethanol," it added. "We have already experienced steep increases in raw material prices with clear links to the EU biofuels policy. Rapeseed oil price doubled over the last 5 years and the price of cereals, starches, and glucose recently increased by ... 20%."

The food industry has repeatedly called on EU policy makers to stimulate alternatives to fuels derived from edible oils to resolve a growing conflict between the food sector and biodiesel producers. Big European food makers such as Anglo-Dutch Unilever face fierce competition for rapeseed oil supplies from biodiesel makers as tax incentives and high crude oil prices stimulate green fuel production.

"Biodiesel is grabbing an increasing share of our vegetable oil supply. The competition will be seriously distorted if mandatory obligations are included for the mineral oil companies" said Inneke Herreman, Secretary General of IMACE. The food organizations urged the EU to open its imports for biofuels and expand the feedstock base for biofuel production in order to prevent a squeeze on food needs.