The EU launched new rules to account for indirect greenhouse gas emissions from biofuels, sending what EU Climate Commissioner Connie Hedegaard called a clear signal that first-generation biofuels were “not the future in Europe”.

Appearing in a joint press conference with Energy Commissioner Günther Oettinger, Hedegaard said that the compromise paper was not perfect but would ensure that future European biofuels were “more sustainable than they would have been without this proposal.”

“Climate-wise, some of the biofuels [receiving EU subsidies] are as bad as, or even worse than the fossil fuels that they replace,” she said.

This is because of indirect land-use change (ILUC), a process whereby carbon sinks are destroyed outside of Europe to cultivate land for biofuels crops. ILUC was demonstrated in scientific models and confirmed by indigenous peoples’ experiences in developing countries.

The new proposal, which will amend both the Biofuels and Fuel Quality Directives, contains measures aimed at preventing the EU from providing incentives for the continued displacement of food crops for fuel. These include:

•A 5% cap on the amount of biofuels in the EU’s 2020 transport mix;

•An end to public subsidies for biofuels after 2020 unless they can demonstrate “substantial greenhouse gas savings”;

•A quadrupling of credits for second-generation biofuels, to provide production incentives;

•A 60% greenhouse-gas-saving threshold that will apply to new biofuels installations from 1 July 2014;

•A review of policy and scientific evidence on ILUC, which will take place in 2017.

But the EU backtracked on its initial draft plans to introduce mandatory accounting for the indirect greenhouse gas emissions of specific feed-based biofuels under the Fuel Quality Directive.

As a result, first-generation biofuels may still be counted towards meeting the EU’s separate target for a 6% reduction in fuel greenhouse gas emissions, even though leaked EU data corroborate Hedegaard’s assertion that some may indirectly emit more greenhouse gas than fossil fuels.

Missed opportunity

Environmentalists said that the EU had missed an opportunity to correct past mistakes by admitting the error of originally promoting first-generation fuels.

“To paraphrase Keynes’ famous quote, the Commission chose to be precisely wrong rather than roughly right,” said Nuša Urbančič, the fuels programme manager for Transport and Environment.

Representatives of the first-generation biofuels industry were even more unhappy, arguing that the proposals would only signal to investors that the EU lacked policy coherence and predictability.

“It is crazy to think that killing first-generation of biofuels will give any incentive to develop the second generation,” said Isabelle Maurizi, a spokeswoman for the European Biodiesel Board.

“There is too much uncertainty about who would pay for it now, as first-generation providers won’t be on the market any more to invest in it,” she added.

But the EU believes that it is charting a clear path by giving inputs for the future, without punishing investors who expect a return on what they believed was a definitive EU policy direction until 2020.

“As ever, some people say we are not doing enough and others say we need to do more,” Oettinger said at the joint press conference. “I think we’re seeing a middle way.”

No mistakes

Responding to a question from EurActiv, Hedegaard said that the EU had acted judiciously in 2009 by incentivising biofuels, while leaving the door open for future measures on ILUC.

“Everyone was aware that there might be such a thing as ILUC, but the science at that time was not very well developed,” she said. “It was not a mistake that it wasn’t done at that time.”

But “the time is here” now, she added.

Many academics, scientists and Brussels officials believe that the story of how the EU’s biofuels target came to be set is more complex and controversial than Hedegaard suggested.

At the Commission’s headquarters, often divided on the biofuels question in the past, there appeared to be relief yesterday that a potential policy time bomb had been defused, at least for the moment.

Positions:

Transport and Environment’s programme manager for fuels, Nuša Urbančič, said it was a problem that the EU’s proposals would still allow high carbon biofuels to count towards meeting the EU’s low carbon targets in the renewable energy and fuel quality directives. She said: “Even though the science has shown that including indirect emissions can make biofuels’ climate impact higher than fossil fuels, the Commission decided to miss the opportunity to steer the production towards more sustainable biofuels. To paraphrase Keynes’ famous quote, the Commission chose to be precisely wrong rather than roughly right.”

“While the European Commission proposal limits today’s bad practices, it does not fundamentally steer future bioenergy in a sustainable direction, because it still does not account for ILUC emissions from biofuels. This creates risks and uncertainties for the environment as well as for investors”, Urbančič added.

In a joint statement sent to EurActiv, the biggest farming and biofuels associations expressed dissatisfaction with the Commission’s proposals. It was signed by COCERAL, the European association of cereals, rice, feedstuffs oilseeds, olive oil, oils and fats and agrosupply trade, Copa-Cogeca, the voice of farmers and agri-cooperatives in the EU, The European Biodiesel Board, The European Oilseed Alliance, ePURE, the European bioethanol association, FEDIOL, which represents the interests of the European vegetable oils and proteinmeal industry, and CIBE a sugar beet growers federation. Their statement said: “The EU farmers and biofuels industries remains steadfastly opposed to the European Commission’s proposal to limit biofuels made from certain arable crops and to add indirect land use change [ILUC] to the renewable energy and fuel quality directives,” it said.

“A proposal based on unfounded and immature ILUC science and a 5% cap in 2020 would destroy the biofuels industries and related sectors such as crushing and sugar facilities. It would also cut off European farmers from a key market, reducing the crops diversification. Any change in policy must safeguard the investments made and ongoing toward fulfilling the Commission’s initial objectives of 10% renewable energy for transport production in the EU. Fundamental problems remain in the EC proposal which will have devastating impact on the biofuels industries and diversification of farmers’ revenues.”

That position was backed by the Renewable Energy Association’s head of renewable transport, Clare Wenner, who said: “We are pleased to see that the European Commission has listened to industry’s concerns, which we have had to articulate under great pressure in a very short time frame. The decision not to implement mandatory ILUC factors until sufficient research has been carried out is welcome.”

“However, the proposals to cap crop-based biofuels at 5% of transport and to withdraw support altogether after 2020 remain,” she continued. “These proposals constitute a wholesale withdrawal of political support from the Commission, and will deter the very investors that the Commission wants to invest in innovations for non-food advanced biofuels.”

The European Environmental Bureau’s Faustine Defossez took a different approach. He said: “With this proposal the Commission could have brought an end to a two year paralysis that only created losers; the environment and the climate through changes to land use, the industry through uncertainty and poor people through higher food prices. However, the action taken only goes half way.”

“Although the Commission has finally acknowledged that biofuels can increase CO2 emissions compared to fossil fuels, under intense industry pressure they have failed to adopt proper measures to address these.This policy was sold to EU citizens as one which would help in the fight against climate change. The proposal requires governments to report how much extra emissions they are causing; but puzzlingly stops short of asking them to do anything about it.”

Robbie Blake, biofuels campaigner for Friends of the Earth Europe, agreed. “The proposed action to limit future EU demand for biofuels is better than nothing, but the fact remains that these reforms would maintain the status quo and make climate change and hunger worse,” he said. “With a new food crisis looming and nearly a billion people on the planet going hungry, we need to stop burning food altogether. Combating global hunger must come ahead of the narrow interests of the big farming lobby and biofuels industry.”

Franziska Achterberg, Greenpeace EU transport policy director, also took a critical line: “The Commission finally wants to rein in harmful biofuels, but will do nothing to reverse the biomess,” she said. “If this proposal becomes law, biofuels more damaging to the climate than crude oil will still be used to meet green transport targets.”

Another environmental NGO, WWF, complained that “after two years of dithering the European Commission has virtually ignored the significant deforestation and climate emissions from biofuels. National governments and the European Parliament must now step in to cut biofuel use to zero and call for a genuinely green transport policy that serves people and the planet.”

Imke Lübbeke, WWF’s senior renewable energy policy officer, continued: “The biofuels proposal is only a half measure. It doesn’t reflect the urgent need to ensure the industry responsibly sources the right biofuels, so as to deliver greenhouse gas reduction. By proposing to cap the use of biofuels from food crops at 5% of final transport energy consumption by 2020, the European Commission is doing the right thing. The proposal will stop increasing the severe impacts on nature and people at large scale.”

“However, we are also concerned that the indirect climate impact of biofuels has not been taken into account,” she went on. “As a result, fuel suppliers will be free to continue blending biodiesel made from palm oil, soybeans and rapeseed into their fuels and claiming credit for cutting emissions despite evidence that the opposite can be true. Proper recognition of the significant and harmful environmental impacts of carbon emissions associated with biofuels is long overdue.”

“We encourage the European Commission to phase out food-based biofuels which cause volatile food prices, land grabbing and which fail to reduce Greenhouse Gas emissions,” said Denise Auclair , a policy officer for CIDSE, a coalition of 16 Catholic charities. “A biofuel policy which does not tackle climate change and which takes food out of people’s mouths is unworthy of a leading development and climate actor as the European Union,” she added. “The EU’s sustainability criteria need a fundamental redesign, to require businesses to meet a high standard when it comes to social, not only environmental, impacts of biofuel production,” said CIDSE EU Policy Officer Denise Auclair.

Second generation biofuels industry reactions to the proposal were on balance more positive. “Such a decision has the potential to trigger strong investment, research and industrial deployment in the EU algae sector, by making it relatively easier to reach, in the long term, economic viability” said Chiara Zanasi, project manager at the European Algae Biomass Association.

Lars Christian Hansen, the European president of Novozymes, was also broadly positive in his assessment. “Novozymes strongly supports the Commission’s intention to accelerate the deployment of advanced biofuels in Europe,” he said. “A stable and ambitious framework is needed to attract the necessary investments in advanced biorefineries and drive the development of advanced ethanol made from waste and residues with no ILUC. However, the effectiveness of the proposed instruments to support advanced biofuels are questionable. Just as the existing double counting mechanism failed to foster their deployment, the quadrupling counting is likely to have no effect. A dedicated, ramping-up target for advanced biofuels is the best option to secure the commercial deployment of advanced biofuels by 2020 and beyond.”

He continued: “Novozymes urges the Commission to push for more ethanol in the fuel pool to initiate a transition towards most sustainable transport fuels. The latest science on iLUC clearly signals that ethanol significantly reduces GHG emissions compared to fossil fuels even when indirect effects are accounted for. Capping all conventional biofuels without distinction and failing to promote the best performing ones will not help address iLUC. Today’s proposal is not providing the necessary signals that sustainable biofuels will be part of the EU energy mix.”

Next steps:

1 July 2014: New biofuels installations must meet a 60% greenhouse gas saving threshold

1 Dec. 2017: Biofuels installations in operation before 1 July 2014 must meet a greenhouse gas saving threshold of 35%

31 Dec. 2017: The Commission will submit a review of policy and best scientific evidence on ILUC to the European Parliament and Council

1 Jan. 2018: Biofuels installations in operation before 1 July 2014 must meet a greenhouse gas saviong threshold of 50%

1 Jan. 2020: Deadline for 10% of EU’s transport fuels to be sourced from renewable energies.

2020: European Commission will not support further subsidies to biofuels unless they can demonstrate “substantial greenhouse gas savings”