LONDON (Reuters) – The U.S. Environmental Protection Agency has consistently over-estimated the prospects for production of advanced biofuels from non-food crops, adding to the impression of a biofuel policy that is out of step with reality.

The U.S. renewable fuel standard requires fuel producers to blend a certain portion of biofuels with gasoline; the standard originated under the Clean Air Act and was expanded under the Energy Independence and Security Act (EISA) of 2007.

LONDON, March 21 (Reuters) – U.S. data suggests the
percentage of ethanol in the gasoline supply is nearing the
“blend wall” – the 10 percent level beyond which refiners fear
to go – but perhaps not close enough to explain a sudden jump in
the price of compliance credits.

Other explanations for the price rise could include new
expectations that the blend wall will be reached next year; a
lack of available product after a fall in U.S. ethanol output
last year; speculative buying of compliance credits; or a
combination of these.

LONDON, March 20 (Reuters) – Cutting vehicle weight may be
the next main advance in reducing the financial and
environmental cost of motoring.

Until now carmakers have met a trend towards tougher fuel
economy standards worldwide by reducing engine sizes and
introducing technology for example to cut motors when a car is
idling.

LONDON, March 19 (Reuters) – The variable carbon tax that
Britain is introducing from April 1 to promote low-carbon
investment will cause problems due to some incompatibility with
the wider European emissions trading scheme.

The tax, called “carbon price support” by the British
government, is levied on suppliers of fossil fuels to power
plants and these will pass on the cost to electricity consumers.

LONDON, March 14 (Reuters) – The benefit of a significant
investment in a flat-lining British economy is likely to trump
cost concerns over plans to build a new nuclear power plant.

The government may announce as early as next week a power
purchase agreement with the French utility EDF,
coinciding with a Budget which will have little to cheer in a
country teetering on the edge of a third recession in six years.

LONDON, March 13 (Reuters) – The European Union has begun
the process of agreeing a new carbon cap for 2030, with early
signs that it could reinvigorate the emissions market and
simplify low-carbon policy.

The outcome will depend on horse-trading with sceptical
carbon-intensive countries such as Poland and the eventual
parcelling of the cap between industry sectors.

LONDON, March 12 (Reuters) – The uncertainty over prospects
for the European Union emissions trading scheme is so great that
it justifies current low carbon permit prices – which may even
be a little high by one method of estimating underlying value.

The scheme faces a range of possible outcomes in this
decade. These range from a cancellation of up to 1,900 million
or so surplus EU allowances (EUAs) following on from reforms now
being planned and which would greatly boost confidence, to total
scrapping of the market, which is unlikely.

LONDON, March 8 (Reuters) – Recent extreme heat waves
reinforce concerns that the slow pace of action against climate
change is inadequate, raising interest in new fixes called
geoengineering, but this warrants caution.

Proposed geoengineering fixes fall broadly between
reflecting sunlight and heat back into space, or sucking carbon
dioxide out of the atmosphere.

LONDON, March 6 (Reuters) – The European Commission is
backing a gradual shift away from renewable energy subsidies,
where it must tread a fine line between phasing out support and
killing investment.

It is significant that the European Union’s executive
Commission is signalling such a shift after European Union
countries already pared back subsidies.

LONDON, March 5 (Reuters) – The battle over U.S. approval of
the Keystone oil pipeline shows the difficulty in regulating
carbon emissions through the supply of crude oil, barring an
unlikely global agreement to curb demand.

If approved by Washington later this year, the pipeline
would transport land-locked, high carbon Canadian tar sand crude
to Gulf Coast refineries and from there to world oil markets.