PARIS - France will miss a national target again this year for blending ethanol into gasoline because of slower-than-expected uptake at petrol stations, a French sugar beet growers group said on Friday.
Overall incorporation of ethanol in energy-value terms should reach 6 percent at the end of 2010, short of a 7 percent objective set by the government, the CGB said at a news conference.
France will, however, meet the European Union's non-compulsory target of 5.75 percent for this year.
Sugar beet is one of the crops used to produce ethanol, and the biofuel has become a major outlet for beet growers amid a restructuring of the European sugar sector.
Delays in rolling out so-called E10 fuel and still-modest uptake for majority-ethanol E85 fuel have curbed total consumption, Alain Jeanroy, director of the CGB, told reporters.
"We are going to have to generalise E10 and target 50 percent of the market in 2011, compared with just under 15 percent in 2010," he said.
The rollout of E10 fuel has been hampered by a lack of consensus among distributors over which gasoline product to drop to make room for the new fuel at pumps.
The gasoline sector had already fallen short of a French target for incorporating 6.25 percent of ethanol in 2009, when it achieved 5.24 percent, Jeanroy said.
The fuel distribution sector pays tax penalties for not meeting biofuel targets, which total 407 million euros ($536.8 million) for each blending percentage not achieved, although they also receive tax breaks for biofuel that is incorporated, France's petroleum body UFIP said earlier this year in a presentation.
France has set more ambitious targets than the European Union. The EU's key requirement is to reach 10 percent of renewable sources in transport fuel in 2020, mostly from biofuels.
To meet the 2020 target, the ethanol sector wants the government to start work on developing E15 fuel and not increase taxation on biofuels next year, after tax breaks have been scaled down since 2009, the CGB said.
(c) Copyright Thomson Reuters 2010.
