Eight nations warn EU over biofuel barriers

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BRUSSELS (Reuters) - Eight developing countries warned the European Union on Thursday they could file a World Trade Organization complaint over what they see as unfair barriers being raised against their biofuels. A draft letter seen by Reuters called on the EU to refrain from agreeing legislation that would instruct developing nations on which parts of their territory they could use for biofuels.

BRUSSELS (Reuters) - Eight developing countries warned the European Union on Thursday they could file a World Trade Organization complaint over what they see as unfair barriers being raised against their biofuels.

A draft letter seen by Reuters called on the EU to refrain from agreeing legislation that would instruct developing nations on which parts of their territory they could use for biofuels.

The EU's final stance will be decided in negotiations in coming weeks between member states and the European Parliament, which has so far demanded numerous restrictions.

"They impose unjustifiably complex requirements on producers," said the draft letter. "Some of our countries don't exclude the possibility of defending their rights in the World Trade Organization, as a last resort."

"The letter is being signed today by the ambassadors of Argentina, Brazil, Colombia, Malawi, Mozambique, Sierra Leone, Indonesia and Malaysia," said a diplomat from one of the countries.

The European Commission, which originates EU laws, has proposed that 10 percent of all road transport fuel comes from renewable sources by 2020, as it seeks to heed U.N. warnings that climate change will bring more extreme weather and rising sea levels.

Much of that 10 percent would come from biofuels, creating a huge potential market that is coveted by exporters such as Brazil and Indonesia, as well as EU farming nations.

But environmentalists charge that biofuels made from grains and oilseeds have pushed up food prices and forced subsistence farmers to expand agricultural land by hacking into rainforests and draining wetlands -- known as "land-use change."

EU member states have responded by altering the Commission's proposals to include tough environmental standards for biofuels.

The European Parliament has also proposed reducing the share of fuels from food such as Brazilian sugar to 6 percent of EU fuel, down from 10 percent.

But developing nations contend this would prevent them from expanding agriculture into wild areas -- as European nations have already done to improve their own living standards.

"Provisions relating to land-use change will impinge disproportionately on developing countries, where there are stocks of undeveloped arable land that can be used for biofuels production," said the letter.

(Reporting by Pete Harrison; editing by Mark John)