The Commission has today, 17 October, finally taken half a step towards addressing the indirect land use change (ILUC)^[1] from biofuels. This move comes after 22 months of fraught deliberations. 

The absence of binding ILUC factors both in the Renewable Energy Directive (RED)^[2] and the (FQD)^[3] is particularly disappointing, especially since the recently leaked proposals suggested they would be included in the FQD. ILUC factors clearly belong in the FQD given its focus on reducing life cycle emissions from fuels.

David Baldock, Director of IEEP, said, ‘it is very dispiriting to see that after such a long internal debate, the Commission has backed down in the face of intense pressure from the biofuel and farming industry. As a result, a hard fought agreement has been compromised.’

However, more positive is the proposed cap of 5 per cent on biofuels produced from food crops such as cereals and other starch rich crops, sugar and oil crops to count towards the RED’s 10 per cent target for renewable energy from transport^[4]. 

This is a welcome signal that the processing of these crops for biofuels does not have a future. This is reinforced by the suggestion that subsidies for biofuels from food and feed crops should be abolished after 2020^[5].

Also positive is the long overdue reinforcement of incentives for the use of advanced biofuels from wastes and other more appropriate sources by a double and quadruple counting^[6] mechanism. Nonetheless safeguards on this will be needed7.

Bettina Kretschmer, Biofuels Policy Analyst, reiterated, ‘we think the case for addressing the ILUC issue more decisively to reduce consumption of the most damaging biofuels is very strong and hope the Council and the European Parliament will take this on board in the upcoming negotiations’.

The Institute will be working on these issues over the next two years intensively: http://www.ieep.eu/minisites/pursuing-change-in-biofuels-policy-developing-alternatives/introduction/ 

Contact: 

Please contact Bettina Kretschmer (bkretschmer@ieep.eu), Tel: +32 (0)2 738 7478 

Notes to the editor:

1. The proposal can be found here. Indirect Land Use Change (ILUC) is generated by the elevated demand for agricultural commodities as a consequence of biofuel consumption. In response there will be an expansion of the total area required for growing arable crops, for example at the expense of grassland or forest. Feedstocks for biofuels are often grown on land that is already arable. However, if total food and feed production is to be maintained this is likely to result in the displacement of food or feed production to new areas. The expansion in the area of cultivation leads to land use change, which is associated with GHG emissions as a consequence of the release of carbon locked up in soils and biomass. Moreover the expansion in cultivated area and more intensive use of agricultural land can pose a potentially significant threat to biodiversity globally.
2. Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, OJ L140/16, 05/06/09.
3. Directive 2009/30/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 98/70/EC as regards the specification of petrol, diesel and gas-oil and introducing a mechanism to monitor and reduce greenhouse gas emissions and amending Council Directive 1999/32/EC as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/EEC, OJ L140/88, 05/06/09.
4. It is noted that the 5 per cent cap refers to the main products of these crops, not by-products such as straw in the case of cereals, which is actually incentivised as a biofuel feedstock under the multiple counting provisions. The 5 per cent cap reflects the recognition by the European Commission that the use of such crops for biofuel production increases pressure on agricultural markets and ultimately commodity prices. It should be highlighted, however, that the proposal does not ban the consumption of the food based biofuels above the 5 per cent. Rather, any volumes beyond the 5 per cent will not count towards meeting the EU target. While this represents a strong disincentive for Member States to go beyond the 5 per cent, it does not rule out such action. 
5. We note that the suggestion to abolish subsidies for biofuels from food and feed crops after 2020 is only part of the “Explanatory Memorandum” to the proposal, so not a binding element of the proposed directive. 
6. Biofuels that will be counted four times towards the target are those from the following feedstocks, for a complete list, see the proposal (Annex II): algae, biomass fraction of municipal and industrial waste, straw, manure, sewage sludge. Those counted twice include: used cooking oil, certain animal fats, non-food cellulosic material and certain lingo-cellulosic material. 
7. While the biofuels that will benefit from double or quadruple counting are low-ILUC biofuels, IEEP is concerned about other environmental risks that remain unaddressed in the proposals, such as the removal of too much biomass for energy purposes from existing ecosystems without adequate sustainability safeguards. This is important for a variety of reasons. For example straw is a potentially useful resource for bioenergy but if extracted from fields as a response to the proposed legislative changes on too large a scale could affect soil structure. Energy and woody crops are incentivised through double counting; while these crops typically have higher energy yields per hectare, they would nevertheless cause ILUC if grown on cropland. The proposal could be improved by requiring or at least incentivising their cultivation on truly degraded and unused land (which would have to be carefully defined in environmental terms).