The EC hopes to stimulate the development of alternative, so-called second generation biofuels from non-food feedstock, like waste or straw, which emit less greenhouse gases than fossil fuels and do not directly interfere with global food production.
Announcing the proposals, Energy Commissioner Günther Oettinger said: "This proposal will give new incentives for best-performing biofuels. In the future, biofuels will be saving more substantial greenhouse gas emissions and reduce our fuel import bill."
Commissioner for Climate Action Connie Hedegaard said: "For biofuels to help us combat climate change, we must use truly sustainable biofuels. We must invest in biofuels that achieve real emission cuts and do not compete with food. We are of course not closing down first generation biofuels, but we are sending a clear signal that future increases in biofuels must come from advanced biofuels. Everything else will be unsustainable."
As the market for biofuels has expanded, it has become clear that not all biofuels are the same, in terms of their greenhouse gas impacts from global land use.
Recent scientific studies have shown that when taking into account indirect land use change, for example when biofuel production causes food or feed production to be displaced to non-agricultural land such as forests, some biofuels may actually be adding as much to greenhouse gas emissions as the fossil fuels they replace.
The Commission is therefore proposing to amend the current legislation on biofuels through the Renewable Energy and the Fuel Quality Directives and in particular:
- To increase the minimum greenhouse gas saving threshold for new installations to 60 per cent in order to improve the efficiency of biofuel production processes as well as discouraging further investments in installations with low greenhouse gas performance.
- To include indirect land use change (ILUC) factors in the reporting by fuel suppliers and Member States of greenhouse gas savings of biofuels and bioliquids;
- To limit the amount of food crop-based biofuels and bioliquids that can be counted towards the EU's 10 per cent target for renewable energy in the transport sector by 2020, to the current consumption level, five per cent up to 2020, while keeping the overall renewable energy and carbon intensity reduction targets;
- To provide market incentives for biofuels with no or low indirect land use change emissions, and in particular the 2nd and 3rd generation biofuels produced from feedstock that do not create an additional demand for land, including algae, straw, and various types of waste, as they will contribute more towards the 10 per cent renewable energy in transport target of the Renewable Energy Directive.
Reacting to the EC's proposals, ActionAid welcomed the news of limiting the use of food-based biofuels, describing it as an 'important symbolic first step'.
However the anti-poverty agency warns that without a total ban on food and land based fuels, millions will still go hungry because food prices will continue to be affected and land will still be grabbed.
Clare Coffey, Policy Adviser at ActionAid UK said: “The EU Member States and Parliament should walk away from this biofuels proposal and wait until the European Commission comes back with something that will actually tackle climate, land grabs and hunger. We have seen food prices skyrocketing in recent years, fuelled amongst other things by biofuels targets and subsidies. ActionAid has serious doubts as to whether this new policy will do anything to change that.
“While the proposal to introduce a five per cent limit on the amount of food based biofuels that can count towards renewable energy targets is an encouraging and important first step, it may be largely tokenistic since the limit would be set above current food to fuel levels. Nor would it necessarily stop member states from going beyond it.
”Furthermore, by not proposing to account for greenhouse gas emissions associated with EU biofuels, the European Commission makes an unacceptable mockery of the EU’s commitment to tackling climate change.”
The Renewable Energy Association (REA) announced that while the proposals are not as damaging as the leaked versions had suggested, there are still several issues which threaten jobs and investment in this budding sector of the green economy.
REA Head of Renewable Transport Clare Wenner comments: “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 five per cent of transport and to withdraw support altogether after 2020 remain. 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 proposals present five main areas of concern for the REA.
- The proposal to limit crop biofuels to no more than half the 10 per cent target for renewable transport with immediate effect. The market for agricultural feedstocks for biofuels has stimulated huge investment in agricultural productivity in the UK. Furthermore, crop-based biofuels provide as much high protein animal feed as low-carbon biofuels. This feed replaces imported feed often associated with high carbon emissions. Limiting crop-based biofuels will result in less food being grown in the UK and not more.
- The removal of all subsidies for crop-based biofuels post-2020. Plants have been constructed, or are under development, based on the expectation of a post-2020 framework, and there is a clear need for market transition to second generation biofuels which will be based on the existing the biorefineries infrastructure. The shifting of the goalposts will derail current and committed investment estimated at hundreds of millions of pounds in the UK alone and provide no longevity for future investments.
- The published proposals differ from the leaked versions in that they have not imposed mandatory ILUC factors in the Fuel Quality Directive (FQD) after all. The REA supports the broad application of ILUC factors to all non-food land-based industries (not just biofuels, but cosmetics, cotton and detergents, for example), but agrees with the commonly held view that more and better research needs to be conducted into ILUC before these numbers are implemented.
- The leaked proposals suggested a retrospective application of the 60 per cent greenhouse gas saving requirement, backdated to July 2012. We are pleased to see that in the published version of the proposals, this requirement is no longer backdated but will actually apply to new installations from July 2014. We support these strict greenhouse gas saving requirements, which the UK industry is well-placed to meet, but to have moved the goalposts once the game is already underway would have broken the golden rule of fostering investor confidence.
- The proposal to quadruple count advanced biofuels under the RED will not mean four times the carbon savings. On the contrary, with investment in first generation biofuels under threat from this proposal, it is commercially illogical to expect investors to have the confidence to embrace the more expensive, technologically complex advanced biofuels, such as biofuels derived from waste. This proposal will entirely derail a workable forward development trajectory for the UK industry – and puts the UK’s renewable energy and climate targets in a perilous position as the shortfall will most likely be met by the cheapest alternative – fossil fuels.
To date, nearly £1 billion has been invested in the UK in the production of sustainable biofuels, and although our industry now supports 200 companies and 3,five00 jobs across the supply chain, it remains small by EU standards.
The biofuels sector is the only fuels sector where mandatory sustainability standards are legally enforceable. Targets set under the RED have ensured that Government and industry can robustly differentiate between sustainable and unsustainable biofuels. The UK industry has been particularly innovative in meeting these requirements, achieving average greenhouse gas (GHG) savings from UK-produced biofuels of 77 per cent while increasing co-production of animal feeds. The Government’s ‘Bioenergy Strategy’ recognises the role of biofuels in meeting carbon targets over the next 20 years.
Clare Wenner concluded: “The UK biofuels industry is among the best performing in the world, both in terms of sustainability and innovation. The Commission’s heavy handed approach risks alienating investors with the result that transport will remain a haven for fossil fuels.
“The fact is that first-generation biofuels are absolutely essential to meeting our climate and renewable energy targets for as long as the internal combustion engine remains the norm – consumer acceptance of electric vehicles (and the clean grid they need to be low carbon) are still a long way off. If investors cannot do business in the lower risk first generation market, they are unlikely to put millions more pounds into the costlier, riskier second generation market.
“The facts around the impact of biofuels on climate and global food prices are very poorly represented in the public debate. What we need is policy-making which differentiates between good biofuels and bad biofuels, and this is what we will be communicating to MEPs over the months to come.”
Further ReadingYou can view the full proposal by clicking here.