Uneven Returns? The economics of EU biofuels policy
By Caroline Jacobsson, Wed, 17/04/2013 - 10:29
On April 17, BirdLife Europe, the European Environmental Bureau (EEB), Transport & Environment (T&E) and the International Institute for Sustainable Development (IISD) launched a new report revealing that the EU spends €10bn a year in support of the biofuels industry, a sum as big as the Cyprus bailout, yet the industry is not achieving its objectives of climate change mitigation, rural development and energy security. The report ‘Biofuels, at What Cost? A review of costs and benefits of EU biofuels policies’ evaluates the amount of financial support that the biofuel industry receives from the EU compared to its turnover. The report also analyses what the financial impact of meeting the 10% Renewable Energy Directive (RED) target would be between 2014 and 2020. Earlier research, commissioned by BirdLife Europe, EEB and T&E, have already indicated that the EU biofuels policy does not reduce greenhouse gas (GHG) emissions from the transport sector. If indirect land-use change (ILUC) emissions from biofuels were counted in, most biodiesel available in the market today would emit more GHG emissions than diesel based on fossil fuel. €10bn equals one Cyprus bailout every year. This amount may double if countries insist on meeting the 10% RED target. The European Commission's proposal from October 2012 limits the amount of biofuels from food crops that can count towards the RED target to 5%. According to the study this will not only save emissions, but a lot of money too. “This policy is just too expensive for what it delivers, as governments are already struggling to financially support an import dependent policy that does not even distinguish between biofuels,” concluded Trees Robijns, EU Agriculture and Bioenergy Policy Officer at BirdLife Europe. Note: ILUC is the process by which land previously used to grow crops for food is converted to grow crops for fuel. Food will have to be grown elsewhere, usually in new, unfarmed land, because demand for food will at least remain constant. This conversion of unfarmed land into new farmland results in an overall increase in GHG emissions, eroding the environmental benefits EU biofuels policy is meant to deliver. Watch a short video about biofuels.