Press Release: Biofuels: aid per hectare of energy crops reduced as the area exceeds 2 million hectares

The Management Committee for Direct Payments has backed unanimously a European Commission proposal to reduce the area on which each farmer may claim the special aid for energy crops in 2007, because the eligible area of 2 million hectares has been exceeded. The aid was introduced in the 2003 reform of the Common Agricultural Policy to provide an incentive for farmers to increase the production of biofuels and electric and thermal energy produced from biomass. Up to the maximum guaranteed area of 2 million hectares, farmers receive €45 per hectare as long as they have concluded a contract with a collector/first processor in order to ensure the crops will be used for processing into the relevant energy products. If this is exceeded, the area on which each farmer can claim aid is reduced by a coefficient to ensure that the €90 million budget is not overrun. The area in 2007 reached approximately 2.84 million hectares and so a reduction coefficient of 0.70337 has been set. In other words, farmers will receive the €45/ha aid for just over 70% of the land on which they claimed the aid.