It is a topic which perfectly emphasizes the delicate balance between fighting climate change, protecting global economies and feeding the world.

The biofuels debate in the European Union has long been seen as a battle of wits between the politicians intent on finding a viable alternative to fossil fuels, and environmentalists and rights groups which claim the creation of biofuels reaps havoc on the environment and cuts into food production, as well as the countries and companies which have much riding on the potential of this new industry.

In an effort to keep up the fight against climate change, while appeasing green campaigners who accuse the EU of lip service only, a panel of European lawmakers voted last week to lower the bloc's target for using traditional biofuels from crops in petrol and diesel.

The European Parliament's influential industry committee endorsed the European Commission's proposal that 10 percent of all road transport fuel should come from renewable sources by 2020.

However, the panel suggested that at least 40 percent of the fuels should be provided by electricity or hydrogen derived from renewable sources and "second-generation" biofuels, which would largely be sourced from waste vegetation or algae. That would leave just 6 percent coming from traditional biofuels made from grains and other food stocks.

At the moment around three percent of the fuel consumed in Europe comes from biofuels.

The 10 percent renewables target for cars has come in for criticism in recent months, with detractors arguing that first-generation biofuels, such as ethanol, require the growing of colza and other crops for the purpose, thus exacerbating deforestation and food security problems.

The EU's proposed mixture of "second-generation" biofuels and fuels from other renewable sources may appear to address the problems highlighted by some environmentalists but it could also create different problems in other areas.

The biofuels industry argues that the second-generation technologies are still a long way off. They also say that electricity used to fuel electric cars could come from environmentally unfriendly coal-based power stations.

The move to reduce the amount of biofuels used in the EU could also curb the growth of a market coveted by biofuel producers such as Brazil, Malaysia and Indonesia, as well as European farming nations.

Brazil heavily committed to first generation fuels

Brazil is the second largest producer of ethanol in the world, after the United States. However, it is the only country with the potential to become an exporter due to its abundance of land and the greater productivity of ethanol made from sugar cane, as compared to ethanol produced from maize or beet, as in the US.

Brazilian ethanol production is expected to rise from 22.3 billion liters last year to 50 billion liters (13 billion gallons) in 2015, according to projections in a report recently published by Brazil's RC Consultores agency.

Consumption, in its turn, will rise to 32 billion liters per year, which would leave Brazil with a surplus of 18 billion liters for export in 2015.

This year Brazil is expected to export around four billion liters of ethanol, up on the 3.5 billion liters it exported in 2007, specifically to the United States, Europe, Japan and the Caribbean.

The rise in Brazilian ethanol production will be the result of investment of around 25 billion reais (9.8 billion euros, $13.9 billion) in the sector over the next few years.

But what effect will the EU's proposed reduction of first generation biofuel use have on these projected figures and on Brazil as a whole?

"Brazil is the world's biggest sugar cane and sugar ethanol producer and their government tends to class sugar cane as a 'non-food crop'," said Almuth Ernsting, an expert at the industry monitoring organization Biofuelwatch. "On the other hand, Brazil also has large eucalyptus monocultures, currently linked largely to the charcoal industry and the pulp and paper industry.

"If second generation biofuels (i.e. biomass to liquids technologies) became commercially viable then these types of plantations are likely to be expanded substantially. Fast growing trees grown on monoculture plantations in the tropics, including eucalyptus, are likely to be one of the preferred feed stocks for second generation biofuels."

However, Ernsting said, Brazil's existing biofuel refineries would not be able to switch to second generation biofuels. This would require a completely different type of refinery. "Besides, at the moment, there are no signs of 'first generation' biofuels being abandoned if second generation technologies became available," she said.

Sunny days ahead for warmer countries?

Professor Eva-Mari Aro, an expert on plant physiology and molecular biology at the University of Turku in Finland, said she believed that alternative raw materials such as unicellular algae would not have an adverse effect on economies that have been investing heavily in first generation biofuel production. She said many of the countries currently leading the way in the production of ethanol and other fuels may even have an advantage over others when it comes to these second generation biofuels.

The most promising feature of the algae, which can create more of the biomass needed to produce fuel faster and more efficiently than normal plants, is that it can produce molecular hydrogen directly from sunlight and water. As long as the algae can be hydrated and has enough sun, it will prosper. It can also grow in water which would help cut down on the amount of land used for growing first generation biofuel crops.

"In the future, when sunlight will be the main energy source for human beings, today's poorest countries will have something that rich countries really are craving," Professor Aro told DW-WORLD.DE. "This means that this new energy business will boom in poor but very sunny countries in Africa, South America and Asia.

"The basic idea of new generation biofuels is not to compete with resources needed for food production," she added. "If in the future the sunny but poor countries become real players in the global energy market, it will ultimately mean more resources for them. The financial benefits of this must be monitored, of course, and used to modernize the whole society starting with agriculture."

This, of course, is good news for those countries blessed with near constant sunshine and, in turn, those nations which turn on to the new generation of biofuels based on unicellular algae and other photosynthesizing raw materials.

But by turning its attention from the first generation biofuels which have caused so much controversy, has the European Union also shot itself in the foot as a potential producer? After all, many parts of Europe are not exactly sun-kissed.

Time will tell if the new generation of biofuels will bring a little sunshine into the lives of Europeans.