EU Wine Distilleries Warn of Closures as €60 Aid Gap Threatens Sustainability Efforts

Wine distilleries across Europe are raising concerns about the future of their industry, citing falling ethanol prices and what they describe as uneven and insufficient support from European Union institutions. The Wine Distilleries European Network (WiDEN), which represents distilleries in Spain, Italy, France, Hungary, and Portugal, has decided to increase its lobbying efforts with the European Commission and the European Parliament. The decision was made during WiDEN’s General Assembly held in October.

Distilleries play a key role in the wine sector by processing winemaking by-products such as lees and grape marc. These by-products are converted into raw alcohol, which is used for various purposes including biofuel production. According to WiDEN, this process supports sustainability by preventing millions of tons of waste from entering landfills or being disposed of improperly.

However, WiDEN members say the sector is now facing a critical situation due to three main issues. First, there is a disparity in financial support for different types of winemaking by-products. Since 2008, EU aid for alcohol produced from grape marc has been set at €110 per hectoliter of pure alcohol (HLPA), while aid for alcohol from lees is only €50 per HLPA. WiDEN argues that this difference is outdated and penalizes distilleries that process lees. The network is calling for a uniform support rate of €110 per HLPA for all winemaking by-products.

Second, current EU rules cap subsidized distillation at 10% of the alcohol contained in wine produced. WiDEN says this limit no longer reflects the technical and environmental needs of the sector. The group wants the cap revised so that all winemaking residues can be fully recovered and processed.

The third issue involves the classification of bioethanol under the Renewable Energy Directive (RED). Ethanol made from lees and marc qualifies as an advanced biofuel and is eligible for “double counting,” a mechanism that allows it to count twice towards renewable energy targets. However, WiDEN claims that increasing imports of non-advanced ethanol from outside the EU are benefiting from double counting due to reduced tariffs and insufficient controls. This, they say, creates unfair competition and undermines the intended benefits of the RED.

WiDEN is urging greater involvement from both DG AGRI (the Directorate-General for Agriculture and Rural Development) and DG TAXUD (the Directorate-General for Taxation and Customs Union) in defining and supervising double-counting criteria. The network also suggests that extra-EU ethanol should be excluded from double counting if its misuse causes significant economic harm to sectors listed in Annex IX of the RED.

Marco Bertagni, President of WiDEN, emphasized the importance of wine distilleries in supporting both environmental sustainability and economic stability within the European wine industry. He warned that without adequate support, many distilleries could be forced to close, which would have serious consequences for waste management and the broader wine sector.

The network’s call comes at a time when many agricultural sectors across Europe are seeking greater clarity and support from EU policymakers amid changing market conditions and regulatory frameworks. WiDEN’s intensified lobbying efforts reflect growing anxiety among wine distillers about their ability to remain competitive and sustainable under current policies.