The proposals, to be unveiled next week, are aimed at enhancing the environmental credentials of biofuels like biodiesel or ethanol to counter concerns that European drivers are playing a role in destroying wetlands, forests and grasslands in areas like Southeast Asia or Latin America each time they fill up their tanks.
In its draft, the European Union requires that biofuels from crops grown on some kinds of land covered in forest, wetlands and grasslands as of January 2008 should be banned for use in the 27-nation bloc. The commission also would require that biofuels used in Europe should deliver “a minimum level of greenhouse gas savings.”
The text, which could change before European commissioners meet on Jan. 23 to adopt a final version, also emphasizes that areas like rain forests and lands with high levels of biodiversity should not be converted to growing biofuels.
At the same time, the European Union does not want to abandon biofuels because they could still help decrease Europe’s dependency on imported oil by providing alternatives to gasoline and diesel fuel.
“The problem is that we have no alternative to oil at the moment, and 90 percent of our transport in Europe depends on oil, making us extremely vulnerable to foreign supplies,” said Ferran Tarradellas Espuny, the spokesman for the European Union’s energy commissioner, Andris Piebalgs.
Europe is drafting its rules on biofuels amid rising prices for gasoline and diesel and growing worries about climate change across the world. In recent years, a number of countries have started growing and using fuels produced from plants or agricultural waste.
In the United States, ethanol produced from corn has boomed, as has ethanol produced from sugar cane in Brazil. In Europe and to a lesser extent in the United States, vegetable oils have been converted into a type of diesel fuel by a simple chemical procedure.
In principle, these biofuels promise not only to displace imported oil but also to lower the amount of greenhouse gases being dumped into the atmosphere. The crops absorb carbon dioxide, the main greenhouse gas, as they grow, and the fuels made from them re-emit that same gas when they are burned a few months later.
But fuel crops also hold the potential for considerable environmental harm. Not only is native vegetation, including tropical rain forest, being chopped down in some cases to plant the crops, but the crops also are often grown using fossil fuels like diesel for tractors — and they demand nitrogen fertilizer made largely with natural gas. Moreover, turning the crops into fuels can demand huge amounts of water.
Experts say certain types of fuels, particularly those made from agricultural wastes, still hold potential to improve the environment. But it is only now becoming clear that to achieve that goal, governments will have to set and enforce standards for how the fuels are produced.
With its new proposal, Europe appears to be moving ahead of the rest of the world in that task. In part, that is because biofuels are the main weapon foreseen by the European Union to lower emissions from the transportation sector, which has the fastest growing levels of greenhouse gases among all sectors of its economy.
The increasingly negative image of biofuels has left officials pulled in separate directions — on the one hand trying to clean up the European market for biofuels that cause environmental damage, while on the other hand seeking to rehabilitate biofuels to meet Europe’s ambitious greenhouse gas emissions targets.
The draft rules by the European Union would probably have the biggest effect on growers of palm oil in countries like Malaysia and Indonesia, according to Matt Drinkwater, a biofuels analyst with New Energy Finance in London.
“Some proposed developments in Southeast Asia will almost certainly be blocked by these provisions,” he said, explaining that the rules would make it much harder to plant on recently cleared land or export fuels to Europe that emit significant amounts of greenhouse gases produced during the process of manufacturing biodiesel from palm oil.
Growers of crops to produce ethanol — a substitute for gasoline that is more commonly used in the United States than in Europe — also could be affected because the proposed European Union rules include provisions on preserving grasslands, Mr. Drinkwater said. Crops for ethanol are grown widely in parts of South America, including Brazil.
An organization representing major growers of crops for biofuels in Malaysia said the European Union should be cautious before imposing new rules. It said that farmers in the region were adopting more sustainable practices, and warned that restrictions on imports could raise trade tensions.
“The Malaysian government is very concerned about the E.U. scheme for sustainability of biofuels,” said Zainuddin Hassan, the manager in Europe for the Malaysian Palm Oil Council in Brussels. The measures “should not be a trade barrier to the palm oil industry and it should comply with the W.T.O. rules as well,” he said, referring to the World Trade Organization.
Verifying that only environmentally sound biofuels are being imported into Europe would be left to individual countries. But the draft law calls for penalties for violating the rules, like exclusion from tax breaks, to be uniform across the region.
The draft law also says biofuels should be physically tracked “so that biofuels fulfilling the sustainability criteria can be identified and rewarded with a premium in the market.”
The measures are part of a plan for Europe to set a binding target that 10 percent of the transportation fuels consumed by 2020 would come from renewable sources. Most of these are expected to be biofuels.
Espuny, the spokesman for the European Union’s energy commissioner, said European countries that used even more than 10 percent of biofuels in their transportation fuels mix could use their progress to help them to reach other important targets. Those include an overall binding target of a 20 percent share of renewable sources in energy consumption by 2020.
Currently, most of the crops for biofuels used in Europe consist of rapeseed for biodiesel grown in parts of Europe, according to Mr. Drinkwater, the analyst at New Energy Finance. Other crops for biodiesel include palm oil from Southeast Asia and soy from Latin America. Europe also imports some ethanol from Brazil made from sugar cane, and produces some ethanol domestically using wheat and sugar beat, he said.
A flurry of studies has discredited some of the claims made by biofuels producers, including that the fuels help substantially to reduce greenhouse gases by producing fuels fr