DTE’s analysis of the EC’s agrofuels policy amendments

DTE Agrofuels Update April 2013, Part II

The following is the second part of DTE's April 2013 Agrofuels Update. It provides a short analysis of the key elements of the EC’s proposals. The first part provides a background to the proposals.

The full EC proposals can be accessed here.

EC Proposal: A 5% cap  on use of food crop-based (first generation) agrofuels for transport

What does this mean?

A 5% limit will be placed on the amount of food crop-based agrofuels used to meet the EU’s goal of ensuring that at least 10% of energy used for transport comes from renewable sources by 2020. Under current policy, agrofuels made from food crops can legally account for the entire 10% target for transport. The new proposal reduces this amount by half. However, food based agrofuels already account for just below 5% (4.7% in 2010) of agrofuels used in the EU– so the cap does not reduce agrofuels use: it limits it to just above current levels.

DTE’s opinion

The EC has recognised that there is competition between growing crops for food and for agrofuels and the proposal goes some way to addressing this – but there are three key failings:

1) It’s business as usual!  Setting the limit just above current levels does little more than maintain the status quo.  Furthermore, the proposal does not account for the fact that, between now and 2020 (the deadline for the 10% target for renewable transport energy) the demand for transport fuel is set to rise. This means that the actual volume of agrofuels from food crops will still increase significantly between now and 2020, despite the 5% cap.[1]

2) The 5% cap is not an absolute ceiling. The proposal limits the amount of food based agrofuels that can count towards the 10% renewable transport target for 2020 but it does not prohibit the use of food based agrofuels beyond the 5% cap. Furthermore, the proposal the applies to the 10% transport target in the Renewable Energy Directive (RED)[2] but not to the Fuel Quality Directive (FQD).[3] This gives Member States the freedom to introduce higher blends of food based agrofuels in biodiesel and petrol as a way of reducing the greenhouse gas intensity of fuels by 2020, rather than using low-carbon fuel options, such as hydrogen or clean electricity.

3) The proposal ignores the impacts of other land-based agrofuels feedstocks which are not classed as food crops[4] yet present fierce competition for land and food production. This includes crops such as jatropha, which consumes large amounts of land and natural resources (such as water and soil nutrients) yet produces minimal yields.[5] Information provided in National Renewable Energy Action Plans[6] (the renewable energy road maps provided by each Member State in 2011) show that the majority of Member States will opt for other land-based agrofuels (from crops such as jatropha) to fulfil the remaining 5% of the renewable energy target for transport.  Failing to set a limit on all land-based feestocks incentivises the market expansion for other land-based agrofuels on an enormous scale. Sustainability criteria needed to limit the environmental and social damage this would cause are insufficient.

How could the proposal be improved?

For the 5% cap to be meaningful, it should be applied to all land-based agrofuels  and should apply equally to both the RED and the FQD.  Further plans should be put in place to phase out the use of any agrofuels feedstocks which have negative impacts on local people, the environment or which increase carbon emissions compared to fossil fuels.


EC Proposal: To increase the minimum greenhouse gas (GHG) saving requirements for new installations (agrofuel processing plants)  built in Europe to 60%, compared to fossil fuels – applicable from 1st July 2014

What does this mean?

The proposal aims to ensure that all future agrofuels (destined for transport, heat or electricity generation) are 60% more carbon efficient than fossil fuels. The current target for GHG savings is 35% and is set to increase progressively to 50% in 2017 and 60% in 2018 - so this proposal brings the 60% saving target forward by four years. It also aims to discourage investment in installations with poor GHG performance and to incentivise investment in ‘cleaner’ installations. However, the 60% GHG saving would only apply to processing plants which begin operations from 1st July 2014. All plants in operation before this date are accountable to the existing rules and will be ‘grandfathered',[7] which means they will be exempt from this new requirement.

DTE’s opinion

There are currently enough processing plants built in Europe to meet the majority of the proposed 5% share of transport fuels to come from food-based crops  (accounting for the growth in transport fuels between now and 2020),  so this proposal essentially delivers little or no change to current practice as far as transport fuels are concerned. On this account, the EC has failed to deliver its promise to incentivise only the best performing agrofuels. Member States will still be allowed to count agrofuels with the worst carbon footprint such as palm oil and soy, towards their renewable energy targets. 

How can the proposal be improved?

All agrofuels produced or consumed in Europe should be subjected to the 60% GHG saving requirement, without exception or delay.


EC Proposal: ‘Multiple counting’ for agrofuels with low or no Indirect Land Use Change (ILUC)[8] emissions

What does this mean?

The contributions of agrofuels produced from non-food crops would be weighted more preferably (two or four fold) when counted towards the 10% renewable energy target. The intention of the proposal is to provide extra incentives for investment in ‘advanced’ (second or third generation) agrofuels, produced from 'waste’, 'by-products' and 'residues’[9] which do not create additional demand for land or increase carbon emissions - notably those used fulfil the 10% renewable energy in transport target. Among those that would be quadrupled are algae, straw, animal manure and sewage sludge. Among those that would count double are used cooking oil, certain animal fats, non-food cellulosic material,[10] and lignocellulosic material[11] (except saw logs and veneer logs).

DTE’s opinion

Some waste and residues can indeed be sustainable and should be given extra weighting as an incentive to increase investment and use. However, there needs to be clear definition of  ‘waste’, ‘by-products’ and ‘residue’ materials in order to assess the sustainability of these resources and to ensure that any indirect impacts are taken into account. Over-extraction of agricultural and forest biomass residues in particular may increase the pressure on ecosystems and exacerbate environmental degradation.[12]

How can the proposal be improved?

The proposals must include clear definitions of ‘waste’ and ‘residue’ materials and specify sustainable limits of use. Strong environmental safeguards for use of waste, by-products and residues for use in agrofuel production must be clearly set out to ensure that these advanced feedstocks are genuinely sustainable.


EC Proposal: To include indirect land use change (ILUC) factors in the way fuel suppliers and Member States report the greenhouse gas savings of  agrofuels.

What does this mean?

The proposal applies to ‘biofuels and bioliquids’ used for transport, heat and electricity generation. Put simply, most agrofuels derived from crops which use land will be given an ‘ILUC factor’. ‘ILUC factors’ represent the estimated emissions from the additional land use change that result when agricultural land used to grow food or animal feed crops is taken over for growing agrofuels. When, for example, forests are cleared or peatland is drained to accommodate these displaced food crops, resulting in high levels of GHG emissions, the agrofuel will be allocated with a high ILUC factor.The EC states that agrofuels which cause direct land use change[13] are already obliged to calculate these emissions.[14]

Member States and fuel suppliers are already obliged to provide reports on their progress towards achieving the renewable energy targets of the RED and FQD – but under the new proposal carbon emissions from the indirect land use change of individual feedstocks must also be included. However, while reporting is obligatory, ILUC factors will not be formally accounted for in sustainability criteria of the RED (Article 17)  or under the obligation to reduce the carbon intensity of transport fuels under the FQD (Article 7a). This means that there will be no legislative power to limit the sale or use within the EU market of those agrofuels which have the worst impacts for people, biodiversity and climate change.

DTE’s opinion:

The EC has failed to fulfil one of the key aims of the legislative review – to ensure that Member States and fuels suppliers are accountable for carbon emissions resulting from ILUC. Merely reporting on emissions will change very little unless the actual accounting of emissions is enforced as a legal requirement within sustainability criteria.  The most effective way to enhance the incentives for the best performing agrofuels is to ensure the correct carbon accounting of individual feedstocks through the application of ILUC factors. By failing to achieve this fundamental goal, the proposal will allow the continued support of those agrofuels with the highest lifecycle carbon emissions and which cause some of the world’s worst environmental and social damage. This proposal contradicts the Commission’s acknowledgement that “indirect land-use change can reduce the greenhouse gas emissions savings associated with biofuels and bioliquids”.[15]

How can the proposal be improved?

All agrofuels which require land to grow or where material is grown for the purpose of agrofuel production should be allocated an ILUC factor.  ILUC carbon accounting must be enforced by law within both the Renewable Energy Directive and the Fuel Quality Directive.  


In conclusion

The proposals represent the EC’s first formal recognition of the impacts of ILUC on climate change and food production, by proposing ILUC factors in reporting. They also recognise the dangers in developing policies which create competition between food and fuel, so the EC should be congratulated for this.  However, it seems the Commission buckled under the pressure of the industry lobby and ignored its own recommendations to take the “precautionary approach”.[16] The proposals are full of contradictions, applying rules to the RED but not the FQD and setting requirements for reporting on ILUC factors without accounting for these in sustainability criteria.  They recognise that the RED and FQD are flawed policies yet fall short of taking the necessary steps to address this.

Although the proposals have been adopted, they have not yet been set in legislation – so there is still an opportunity for the EU to fix its failing Directives.


What happens next?

Over the next one-two years[17] the proposals will be subject to discussion through the European Union’s co-decision process[18] where revisions, amendments and even abandonment of the proposals will be discussed before they become legislation.  

By the end of this year the European Commission is scheduled to announce new ILUC sustainability criteria for agrofuels. As Member States of the EU, European Governments must therefore act now to argue their viewpoints and present amendments or alternatives to the amendments, before they are cemented into EU law.

Looking further ahead, there are a number of key dates to keep in mind:

  • 2014: A review of the Renewable Energy Directive will begin. The run up to the review provides an opportunity to raise key concerns, particularly the Commission’s failure to account for ILUC factors in sustainability criteria, to apply the 60% GHG saving threshold to all agrofuels (including those produced before July 2014) - and the shocking lack of social sustainability criteria to limit the social and human rights impacts of the EUs agrofuel demand.
  • 1 December 2017: Agrofuels processing plants in operation before 1 July 2014 must meet a greenhouse gas saving threshold of 35%
  • 1 January 2018: Agrofuels processing plants in operation before 1 July 2014 must meet a greenhouse gas saving threshold of 50%
  • 2020: Deadline for the EU to achieve its target of 10% renewable target for transport fuels. Further subsidies for agrofuels will be removed unless ‘substantial greenhouse gas savings’ can be demonstrated.  Deadline, too, for the EU to reach the target of 20% GHG emissions reductions by 2020 and for 20% of the EU’s energy mix to come from renewable sources.

Go back to DTE Agrofuels Update 2013, introduction and background


[1] For more information on impacts of land grabbing relating to EU agrofuel mandates see http://www.grain.org/article/entries/4653-land-grabbing-for-biofuels-must-stop , GRAIN, 21 February 2013. 

[2] The RED dictates that, by 2020, Europe must reduce its overall greenhouse gas emissions (GHG) by 20% (below 1990 levels) and that 20% of its energy must come from ‘renewable sources’ (although individual Member States have different targets within this). In addition, the RED sets a target specifically for transport energy. This obliges each Member State to ensure that a minimum of 10% of total energy used for transport comes from renewable sources. The vast majority of this is expected to be met by agrofuels –  with the more carbon intensive biodiesel (rather than bioethanol) as the preferred choice overall.

[3] The FQD sets rules around 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 fuels with agrofuels.

[4] i.e. agrofuels crops which need large areas of land to grow, such as jatropha.

[5] See The Struggle for Land, DTE Special Edition Newsletter for more information on agrofuels, jatropha and land grabbing

[6] Member States of the EU are obliged, under Article 4 of the Renewable Energy Directive (2009/28/EC),[1] to provide National Renewable Energy Action Plans (NREAP) which detail how they expect to reach their legally binding 2020 target for the share of renewable energy in their total energy consumption.  In 2011, the NREAPs showed that that majority of Member States had opted to use agrofuels as the main source of renewable energy in transport by 2020.

[7] A ‘grandfathering’ clause allows a pre-existing condition, use or rule to continue despite a later regulation. Inclusion of the grandfathering clause in the proposals is EC's way of providing the agrofuels industry with a sense of security that investments and jobs will be protected despite the changes to legislation.

[8] ILUC is where crops for agrofuels displace land with high carbon stocks (such as forests or peat-lands) or land that could otherwise be used for food production. ILUC increases carbon emissions, destroys forests and biodiversity, removes local people’s land rights and threatens the security of the world’s food production – yet these impacts are not accounted for in the Renewable Energy Directive (RED) and Fuels Quality Directive (FQD)

[9] For more information on alternative feedstocks see the new Institute for European Environmental Policy (IEEP) report on The Sustainability of Advanced Biofuels in the EU: Assessing the sustainability of a list of wastes, residues and other feedstocks set out in the European Commission’s proposal on Indirect Land Use Change (ILUC) http://www.ieep.eu/assets/1173/IEEP_2013_The_sustainability_of_advanced_biofuels_in_the_EU.pdf

[10] Cellulose is a combustible material found in non-food crops such as hemp, switchgrass and willow.

[11] Lignocellulosic materials are dry plant matter residues such as saw mill or paper mill discards, or fibrous matter that remains after sugarcane stalks are crushed to extract their juice.

[12] For more information on the EU policy definitions of, and potential benefits and risks of using ‘advanced’ feedstocks see page 3 of  the new Institute for European Environmental Policy (IEEP) report on The Sustainability of Advanced Biofuels in the EU: Assessing the sustainability of a list of wastes, residues and other feedstocks set out in the European Commission’s proposal on Indirect Land Use Change (ILUC) http://www.ieep.eu/assets/1173/IEEP_2013_The_sustainability_of_advanced_biofuels_in_the_EU.pdf

[13] According to the Kiel Institute: Review of the IFPRI Study, “direct land use change is the conversion of land, which was not used for crop production before, into land used for a particular biofuel feedstock production. The emissions caused by the conversion process can be directly linked to the biofuel load and thus be allocated to the specific carbon balance of that biofuel”. See http://www.ebb-eu.org/EBBpressreleases/Review_iLUC_IfW_final.pdf

[14] European Commission MEMO/12/787 Event Date: 17/10/2012,  Indirect Land Use Change (ILUC) http://europa.eu/rapid/press-release_MEMO-12-787_en.htm

[16] COM (2012) 595 - Proposal for a directive of the European Parliament 17.10.2012, (as above) Page 2.

[17] The timeline for discussions and for setting the deadline for setting legislation has not been confirmed and is likely to be established through the co-decision process (see footnote 18 below)

[18] The co-decision process in this case will involve the European Parliament, the Council of Ministers and the European Commission. For further information on how EU decisions are made, see http://europa.eu/eu-law/index_en.htm