May 23 (Bloomberg) -- Ethanol consumption in the European Union may exceed that of biodiesel by 2020 due to lack of feedstocks for the latter, according to the European Bioethanol Fuel Association, or eBio, which represents the region's ethanol producers.

The 27-nation EU wants biofuels to make up an average 5.75 percent of transportation fuel by 2010 and 10 percent by 2020, in an effort to reduce dependence on fossil fuels and curb greenhouse-gas emissions. Biodiesel constitutes about 80 percent of EU biofuels production, according to research company Frost & Sullivan Inc.

Reaching the biodiesel targets ``relies heavily'' on so- called Biomass to Liquid, made from waste, eBio General Secretary Robert Vierhout said today, and it is ``very uncertain if you can produce it for a reasonable price by then.''

For biodiesel produced from traditional feedstocks, the EU does not have enough land to grow the amount of rapeseed needed, so it would have to ``import from foreign countries, the economics of which is not very good, and which also has sustainability issues,'' Vierhout said in an interview in Seville, Spain.

In implementing the target for 2020, ``you'll probably see more than 10 percent ethanol used and less biodiesel used,'' he said.

Biofuels producers are seeking new feedstocks to make ethanol and biodiesel, produced mostly from sugar, cereal and plant oils, to reduce costs and improve efficiency. The price of corn jumped 81 percent last year on drought and rising demands from the ethanol industry, squeezing the margins for producers of the alternative fuel, as well as for food and feed producers.

The European Union will more than double it ethanol production capacity to 6 billion liters by 2009, led by France, according to eBio. Most of the additional output will be made from wheat. Should the bloc meet its target of blending 10 percent biofuels by 2020, the European Commission forecasts a 6 percent gain in European wheat prices, Vierhout said.

Wheat for November delivery gained 1.25 euros, or 0.8 percent, to 154.25 euros ($208) a metric ton on the Euronext exchange in Paris yesterday. Prices have increased 32 percent in the past year.

To contact the reporter on this story: Marianne Stigset in London at mstigset@bloomberg.net.

Last Updated: May 23, 2007 11:21 EDT