Decision time nears for EU biofuels policy
A new website is online, right when decision makers are negotiating the final stages for new legislation on biofuels and the so-called Indirect Land Use Change. Biofuelsreform.org will help you understand what is happening and help you make up your mind.
Europe is trying to lower its emissions, a challenge because the transportation sector is a major emitter. However, if we continue to pump CO2 into the atmosphere at this rate, we will not remain below the 2 degree Celsius line much needed to keep the climate on our planet stable. In 2003, biofuel was promoted as one quick fix solution.
In 2009, the Renewable Energy Directive gave the transport industry a 10% target for the use of renewable energy sources. This has been implemented by governments through incentives supporting biofuel production. But soon after it was clear that biofuels are not the easy solution they were made out to be; growing crops for biofuel rather than food places pressure on valuable agricultural land all over the world causing increases in food prices (through increase in demand) and increases in emissions (through the conversion of forest, peatland and grassland into new agricultural land). The resulting damage this has led to could not be hidden, and the story broke internationally, placing EU policy into question. The industry, which was created on the back of public subsidies, panicked over a potential policy turn around which would threaten their investments. They initiated an aggressive counter-lobby, and so the ILUC saga began.
Biofuels are fuels derived from plant materials that are compatible with car, plane and truck engines. There are two types - ethanol and biodiesel. Ethanol is produced from crops like wheat, corn or sugar cane. Biodiesel is produced from rapeseed, soybean or palm oil. Biodiesel is the dominant biofuel used in Europe - making up 79% of the overall consumption. What many drivers do not know is that every car consumes biofuel because it is mixed with regular petrol or diesel available at the pump. This does not just happen in Europe, biofuels in the US are also blended with fossil fuels.
So, what is the problem? The problem lies in the fact that growing these crops requires a lot of land. Since biofuels cannot be grown in untouched areas – a safeguard put into place by EU sustainability criteria – they are cultivated on pre-existing farmland. This means there was something already being grown in that location, namely food and feed used to nourish ever growing human populations. Because of this, food production is being pushed into natural areas – exactly what the policy makers wanted to prevent – forests have been going up in smoke to create more land for food production, thereby causing … more emissions. This is called Indirect Land Use Change (or ILUC).
Indirect Land Use Change is not just a story about emissions, it's a story about real people. When you introduce a fixed demand for a particular product on the market (e.g., you ask for X amount of plant derived oil to make biofuels), two things can happen. First, the price goes up because there is not enough production to satisfy demand, and second: you produce more of that product somewhere else. Increase in price is what we have seen when prices for food products have risen. Especially in times of food crises, a fixed extra demand in the market increases prices even more. This has been reported by reputable international bodies such as the OECD.
Land grabbing is another outcome when demand increases to such an extent; “Land grabbing is the name given to the practice of buying or long-term leasing large chunks of land. Usually, land grabbing is the result of a local community’s lack of consent or lack of understanding about how a buyer intends to use it.” It increases when increased demand happens not only in Europe but also in the US, another major player in international markets. Land grabbing tends to happen in places where it is easiest; where people do not have a strong voice and where governments are weak. The fact that biofuels play a role in causing such land conflicts is another painful side effect of what was supposed to be a beneficial climate policy.
“Biofuels seemed too good to be true. Supporters originally sold the idea to policy makers promising the world: the cutting of CO2 emissions, the creation of a new market for farmers, oil companies becoming ‘greener’, and vehicles being less dependent on foreign oil imports. Scientists and environmentalists were sceptical.” This is how this section of the website starts and says it all. The lobby around biofuels has been incredibly fierce. MEPs described this often as one of the most aggressive lobby dossiers they have ever witnessed. And much is at stake, as MEP Bas Eickhout of the Green group puts it: “This push [for biofuels] was taken over by the Agriculture lobby, and the Agriculture lobby is of course under great pressure in Europe, their subsidies are going down…”
Industry and NGOs have long debated. For the first time, NGOs, including BirdLife Europe, sued the European Commission and forced it to publicise studies which taxpayer euros had paid for. These studies helped place the question of biofuels on the political agenda. Industry responded with imaginative numbers showing the creation of European jobs to justify continued subsidies. This did not facilitate decision makers job to find a solution.
What happened on the policy side was over five years of discussion. It started with a simple paragraph in the Renewable Energy Directive stating: “The Commission shall, by 31 December 2010, submit a report […] reviewing the impact of indirect land-use change on greenhouse gas emissions and addressing ways to minimise that impact. The report shall, if appropriate, be accompanied by a proposal based on the best available scientific evidence, containing a concrete methodology for emissions from carbon stock changes caused by indirect land-use changes […]” This paragraph took policy makers from a report, to a Commission proposal, to a first reading in European Parliament and Council, to finally a second reading that is currently being held and should – if all goes well – be finalized this April.
The elements on the table are: at what level shall we limit the subsidised use of first generation biofuels (those grown on agricultural land), should we include Indirect Land Use Change Emissions in the calculation of greenhouse gas emissions, and how shall second generation biofuels (a vague category loosely indicating “better stuff”) be handled. The positions taken by the Council and Parliament are not yet in harmony – which is partly the reason it took so long to get the file at this stage of the decision making. Mr. Torvalds, Finnish ALDE MEP in the European Parliament, must find an agreed position of the Parliament, and with this basis he must negotiate with the Council in so-called trilogues on a final agreement. The deadline to reach an agreement is April 2015.
So what now? From an NGO perspective it is quite straight forward. We cannot afford to go ahead with biofuels that do not reduce emissions and are creating even more problems. What we need is a strong limit on the production and use of land based biofuels – below the 6% proposed by the EP, and definitely below the 7% proposed by the Council. We also need to include ILUC emissions in the sustainability criteria of the two directives at hand (apart from the Renewable Energy Directive, the Fuel Quality Directive also plays a driving role in biofuels and is under discussion). NGOs can accept a delay of inclusion of CO2 emission targets – a so called grandfathering – but this cannot be postponed forever. Finally, the next-generation biofuels (aka “advanced”) should come with a strong sustainability framework, so we do not make the same mistakes again. We have a chance to get it right this time, rectify past mistakes and put ourselves on a better path for future clean transport policies.
“Biofuelsreform.org” is the latest interactive website that Transport & Environment developed with input from BirdLife Europe and the European Environmental Bureau. It comes at this very crucial time, right when decision makers are negotiating the final stages of new legislation on biofuels and the so-called Indirect Land Use Change. We hope that it will help you to understand what is happening and help make up your mind.