ENI Eni Spa

   By Dieter Holger 
 

Eni Spa (ENI.MI) said Thursday that it is making progress in eliminating palm oil from the biofuels it refines, following new European Union rules announced this week.

"The objective is to reduce dramatically, and potentially bring to zero, the use of palm oil, in line with EU rules," an Eni spokeswoman said in response to the new regulations.

On Wednesday, the EU Commission said biodiesel refined from palm oil should gradually decrease by 2023 and reach zero in 2030, though some exemptions remain.

The decision follows a 2016 study by the commission which found that biodiesel refined from palm oil is three times worse for the climate than regular diesel because harvesting the oil causes deforestation in the tropics.

Eni is in the process of substituting palm oil for other vegetable oils, the spokeswoman said, but fully phasing out palm oil is difficult until more alternatives become available.

"We are already decreasing the use of palm oil, progressively substituting it with waste residues and used cooking oil, with the aim of phasing it out completely," she said.

Europe is the second top importer of palm oil in the world after India, according to nonprofit environment group Transport and Environment, with some 51% of imported palm oil in 2017 used for biodiesel. The EU would have cut its imports of palm oil over the years if the oil hadn't gone to biofuels, the group said.

Eni has a bio-refinery in Venice where 85% of the vegetable oil stored is palm oil, the spokeswoman said. The company will also soon bring a new plant online in Sicily that will produce 600,000 metric tons of biodiesel annually.

The Italian energy company is also developing new ways to refine more advanced biofuels, the spokeswoman said.

"At the end of December we have for example inaugurated a pilot plant that transforms urban, organic solid waste into bio-oil, which can then be used as a feedstock in a traditional refinery," she said. Eni is also looking at algae and at castor oil from pre-desert plantations in Tunisia, she said.

Write to Dieter Holger at dieter.holger@dowjones.com; @dieterholger

(END) Dow Jones Newswires

March 14, 2019 11:29 ET (15:29 GMT)

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