Biofuels gridlock continues into 2014

oil palm fruit

DTE 98, March 2014

Indecision and uncertainty on EU biofuels policy persists, as communities in Indonesia continue to suffer the impacts of oil palm expansion.

2013 ended with biofuels policy trapped in a gridlock of indecision.[1] The European Council failed to agree on the measures presented to them by the European Parliament in September, aimed at addressing the negative impacts of indirect land use change (ILUC) and land-based biofuels. Several months into 2014 and the European Parliament’s proposals are gathering dust on the parliamentary shelves. While decision-makers continue to deliberate, it’s business as usual on biofuels and the damage this causes to people, the environment and the climate.

A vision for Europe’s post 2020 Climate and Energy Framework

Meanwhile, the focus on renewable energies has turned to the future – post 2020. In January this year, the European Commission (EC) released a report which sketches out its vision for the European Union's (EU) climate and energy framework for 2020-2030. The commission’s proposal reflected demands from the biofuels industry and several EU Member States, for a ‘simplified’ EU climate framework post-2020.

The EU’s current climate and energy framework (which ends in 2020) requires member states to achieve specific targets to reduce emissions and increase their share of renewable energy – particulary in transport. If agreed, existing sub-targets for the transport and energy sectors will be dropped under the new ‘2030’ framework. Instead, the EU will set a single renewable energy goal of 27% and a single target to cut carbon by 40% by 2030 (compared to 1990 levels), which will apply to the European Union as a whole without any specific or binding targets for individual member states.

The new framework would allow flexibility for governments to choose the most cost effective means of cutting emissions - but what happens to those members states which fail to pull their weight in introducing more renewable energy? In place of the national binding targets, the 2030 framework encourages new ‘regional approaches’, which support better consultation and coordination of national and regional energy policies between neighbouring countries as a strategy for achieving energy and climate targets.

It remains unclear precisely how this new style of governance will ensure that governments are held accountable for their renewable energy contributions – especially considering the lack of binding targets or legal capacity to impose penalties. A certain amount of flexibility can be positive for allowing governments the freedom to tailor their own renewable energy paths. However, history has shown that compulsory targets at the national level are important for instigating action and for holding governments accountable for delivering on their promises. So will the lack of legal targets for member states allow emissions, particularly from transport, to slip through the net, post 2020? Could Europe then fail to reach its 2030 unified emissions targets as a result? How can Europe provide certainty that the Union will achieve its targets without the ability to measure or assess this at the member state level?

These are just some of the questions being raised as the European Union member states enter into debate on the EC’s proposal. The pressure is now on to reach an agreement for the new 2030 framework before the 2015 International Climate Negotiations in Paris.

What does this mean for biofuels?

Debates over what should be regarded as genuinely ‘renewable’ energy have dogged climate discussions for years – and none more so than the debate around biofuels. The EC’s new framework proposes some positive changes, including an end to public support (subsidies) for food-crop based biofuels beyond 2020. Dropping the 10% sub-target for renewable energy in transport will most likely bring an end to the biofuels mandates currently imposed on member states. Biofuels mandates have driven the increasing demand for land-based feedstocks, such as palm oil from Indonesia, resulting in devastating impacts on community livelihoods, forests and peatlands.

So does the new climate and energy framework present a reason to celebrate on biofuels? Not quite. By proposing that sub-targets are dropped from the 2030 goals, the EC is removing incentives for governments to pursue biofuels, which could lead to a phase out of 1st generation biofuels such as palm oil – indeed a positive step. But even if biofuel mandates are scrapped, the Renewable Energy Directive (RED), which originally set the biofuels targets and stimulated the market, has created a thirst for biofuels in Europe, which is unlikely to go away. If oil prices rise high enough, member states could consider biofuels as a viable contribution to their domestic renewable energy mix, even without the support of EU subsidies. The danger is that under the ‘national target-free’ 2030 framework, the EU will have little legislative control over how governments contribute to the Union’s headline targets on renewable energy and emission reductions – including the quantity (and quality) of any biofuels they may use. To add to civil society concerns, the new framework fails to set a 2030 target on energy efficiency and proposes to scrap the Fuel Quality Directive (FQD), which sets a legal target of 6% on the greenhouse gas intensity of fuels.[2] The FQD is essential for ensuring that only the most efficient and highest carbon saving biofuels are used so losing the FQD opens the doors for governments to use less sustainable fuels with little legislative grounds for recourse.

Biomass on the menu

The EC’s report recognises the limitations of 1st generation biofuels as a renewable fuel in Europe, as well as the issues associated with ILUC. Energy and climate plans for 2030 will promote the use of advanced biofuels to replace 1st generation biofuels and to decarbonise certain transport sectors. The report also states that ambitious renewables targets will require a strong increase in the use of biomass – both domestic and imports - and encourages “An improved biomass policy…necessary to maximize the resource efficient use of biomass in order to deliver robust and verifiable greenhouse gas savings”.

The EC admits to the challenges and limitations in delivering this vision, but with little mention of how it will address them. Of particular concern regarding the promotion of biomass and ‘advanced biofuels’ is the issue of sustainability on a large scale.[3] The EU’s existing environmental sustainability criteria are poor and policies almost completely exclude reference to social impacts of biofuels and biomass on producer countries. Only radically improved and legally binding sustainability criteria, with penalties for non-compliance, stand a chance of controlling any environmental or social damage caused by high demand for biomass and biofuels. If transport targets in the RED are scrapped, upholding effective sustainability criteria for biofuels will be challenging if not impossible.

All eyes on decision-makers

The EC’s headline targets for the 2030 energy and climate vision appear ambitious – but the framework behind them has significant weaknesses. The onus is now on EU member states to strengthen the framework post-2020, without losing focus on the immediate priority to fix problems with current biofuels policy. It is essential that those with the authority to make the necessary changes are reminded of their responsibilities to do so.

[1] For more information see DTE’s article: EU Energy Council fails to agree on restrictions to bad biofuels - 12th December 2013.

2]The Fuel Quality Directive (FQD) sets rules for the quality of the fuel used in European vehicles. In particular, it dictates a mandatory 6% reduction in the greenhouse gas intensity of fuels by 2020 (under Article 7a). To reach this 6% reduction, Member States are relying on blending petrol and diesel with agrofuels.

[3] See