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Published: 27 september 2012 15:39

Brussels decision threatens to drive Lithuania’s biofuel plants to bankruptcy

Antroji Vilniaus termofikacinė elektrinė
Irmanto Gelūno / 15min nuotr. / Antroji Vilniaus termofikacinė elektrinė

The European Commission (EC) will discuss proposed changes to the energy policy and in particular a proposal to lower a cap on biofuel consumption to 5 percent, from 10 percent. Such a decision would drive existing biofuel plants to bankruptcy and would lead to a plunge in rapeseed prices, the Verslo Žinios business daily reports.

“It is bad since it would hit our agricultural sector hard. Meanwhile, it was the EU to promote the development of biofuel industry. Now this industrial sector will be ruined, investments will be lost,” Agriculture Minister Kazys Starkevičius told the daily.

The minister added that such a decision would harm Lithuania.

“Such a decision by the European Commission would hit us hard since the sector has been struggling for several years already. Profitability is low,” Arūnas Zubas, CEO of Lithuania’s biofuel production company Mestilla, told the daily.

He projected that changes in biofuel production policy would drive rapeseed prices down by 20–30 percent. As a result, Lithuania’s farmers would lose up to 1 billion litas (EUR 289.85m), based on current prices.

If the Commission adopted the proposal on biofuel consumption cap in its current form, Mestilla would go to court over violation of lawful expectations.

BNS
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