Proposal to limit biofuel land impact weakened

Compromise changed after a month of lobbying.

The European Commission yesterday (17 October) unveiled a proposal to reduce the indirect land use change (ILUC) caused by biofuel. It is less restrictive for the biofuel industry than a draft agreed by the climate and energy departments last month.

The compromise agreed between the two departments, which leaked into the public arena in September, connected new ‘ILUC factors’ – ratings of how much ILUC each type of biofuel causes – to a target in the fuel quality directive that requires fuel producers to derive at least 6% of their products from renewable sources. The weighting for ILUC would have made it easier for fuel companies to meet the target if they invested in biofuel that causes less ILUC.

The compromise that emerged yesterday had been changed after a month of intense lobbying by the biodiesel industry, which complained it would drive them out of business. The ILUC factors are now for reporting purposes only, meaning that a fuel-producing company can continue to use an intensive crop such as palm oil to meet the 6% requirement.

A cap on how much biofuel made from food crops can be used to meet a 10% renewable transport fuel target in the renewable energy directive, part of last month’s leaked draft, has been maintained. In future, only half of the directive’s requirement that 10% of fuel comes from renewable sources (ie, 5% of fuel) can be made up of such biofuel from food crops.

There is also a requirement that biofuel factories achieve at least 60% greenhouse gas emission savings from fossil fuels, up from the current 35%. But this will apply only to new plants built after 2014.

First steps

Connie Hedegaard, the European commissioner for climate action, said that although the proposal “is not perfect” and is a “first step”, it now enshrines the principle of ILUC accounting into EU law. “Up till now it has been a theoretical thing, with this proposal it will be a reality in EU biofuel policies.”
But environmental campaigners said the watered-down proposal will not give fuel companies the motivation to invest in new second-generation types of biofuel that do not cause ILUC.

“The action taken only goes half way,” said Faustine Defossez of green campaign group EEB. “Although the Commission has finally acknowledged that biofuel can increase CO2 emissions compared to fossil fuel, under intense industry pressure it has failed to adopt proper measures to address these.”

Campaign groups also complained that a new provision to count second-generation biofuel four times toward meeting the renewable energy directive’s 10% target will actually harm these new types of fuel. Member states will be able to use 5% first-generation biofuel that causes ILUC and then just 1.25% of second-generation biofuel to meet the 10%  target.

Despite the concession, biofuel companies reacted negatively to the proposal. A joint statement by the biodiesel and bioethanol industries as well as vegetable- oil industry association Fediol and farmers’ organisation Copa-Cogeca said the proposal would still “decimate the biofuel industry” by sending a signal for investors to pull out.

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The groups said the proposal had been based on “unfounded and immature ILUC science” and that the Commission was engaged in an abrupt change of course after having encouraged biofuel production five years ago.

But Hedegaard said even at the time the renewable energy directive was adopted in 2009 it was known that ILUC would eventually have to be dealt with. “Everyone in this business knew, for a very long time, that the Commission would have to analyse whether there is such a thing as ILUC, and if there was such a thing we would have to take action,” she said.

Energy commissioner Günther Oettinger said the proposal represented a middle ground that will ensure biodiesel factories are not shut down immediately, costing jobs.

Hedegaard agreed, saying that while saving these jobs in the short term, the proposal provides incentives for these plants to switch over to second-generation biofuel by 2020.