French biodiesel firm Sofiproteol said on Wednesday it would review its long-term investments, including those in second-generation biofuels made from biomass, if the European Union's biofuel policy changed.
The European Union has set a target for all member states of 10 percent of transport fuels from renewable sources such as biofuels by 2020.
But the target has faced criticism that it is encouraging some farmers to grow crops for fuel instead of food, helping push up food prices worldwide.
Sofiproteol owns France's largest biodiesel maker Diester Industrie and recently launched a 120-million-euro ($189.4 million) project with industrial gas company Air Liquide (AIRP.PA: Quote, Profile, Research, Stock Buzz), the Petroleum Institute and the national Atomic Energy Commission, to develop new techniques to make biodiesel.
Research will focus on using resources such as straw, scrap wood or farm waste to make synthetic diesel, as an alternative to so-called first generation fuels, which are made of grains, oilseeds or sugar that could also be used for food.
Second generation biofuels are widely seen as an answer to critics who say fuel derived from crops is helping push up food prices.
If the research is conclusive, Sofiproteol could open a first plant by 2017, the firm's director general Philippe Tillous-Borde told Reuters.
But if the European Commission were to respond to growing calls to reconsider its 10 percent target, biofuels producers might have to do the same, he said.
"It would certainly lead us to review our plans," he said.
Earlier this week French Secretary of State for Ecology Nathalie Kosciusko-Morizet said setting a quota target was "probably a mistake" and said the European Union might have to reconsider it or extend the deadline.
The comments came after Italy last month became the first EU member to call publicly for a review of the target. Britain has also raised concerns, and this week its government will receive a long-awaited report on the impact of its targets for biofuels.
