EC's proposals for agrofuels policy amendments - background

DTE Agrofuels Udpate April 2013, Part I

Land-based agrofuels (agrofuels from crops which need large areas of land to grow) are bad for people and planet.

Globally, agrofuels are being wrongly championed as ‘sustainable’ and ‘renewable’ sources of energy. The European Union (EU) is one of the world’s biggest markets, increasingly relying on agrofuels to fuel our transport and power stations. But the impacts of agrofuels production are being ignored. Agrofuels worsen climate change, destroy the world’s most important forests and biodiversity and inflict suffering on people who live in producer countries. NGOs and civil society organisations (CSOs) have been raising concerns about it, the scientists and academics have confirmed it and late last year the European Commission finally admitted it: European policies which promote land-based agrofuels (particularly, food-crops) need to change drastically and quickly.

In October 2012, the European Commission (EC) proposed long-awaited policy amendments to the Renewable Energy and Fuel Quality Directives – the EU’s legislation which requiress Europe to reduce its carbon emission.[1] The proposals attempted to limit the impacts of Europe’s demand for agrofuels, and in particular, to account for the impacts of Indirect Land Use Change (ILUC). This two-part update provides a short analysis of key elements in the EC’s proposals. Below, we provide a brief background to the issues and in the second part, we summarise and explain what these amendments will mean in real terms for the future of agrofuel production. The second part also provides DTE’s opinion and suggestions for improvements.

Indirect Land Use Change (ILUC) has been at the forefront of more recent debates on agrofuels. Direct land use change happens where land is cleared for agrofuel crops. Indirect land use change (ILUC) is the knock-on effect: where land is cleared to make way for crops that have themselves been displaced by agrofuel crops. Where this is land with high carbon stocks (such as forests or peat-lands), ILUC increases carbon emissions. Other ILUC impacts include destroying forests and biodiversity, removing local people’s land rights and threatening the security of the world’s food production – yet these impacts are not accounted for in the Renewable Energy Directive (Directive 2009/28/EC) and Fuel Quality Directive (Directive 2009/30/EC).

The Renewable Energy Directive (RED) and Fuel Quality Directive (FQD) are the cornerstone of the European Union’s (EU) legislation aimed at reducing carbon emissions in Europe. They set targets for reducing the EU’s energy consumption, increasing the share of renewable energy in transport, heat and electricity generation, and set the standard of fuel quality for transport. Both Directives establish sustainability criteria which must be met for agrofuels if they are to be counted towards the renewable energy targets. However, the sufficiency of these criteria are at the centre of debate – with the key issue being that the carbon emissions and social and environmental impacts resulting from ILUC were not considered or legally accounted for within the criteria.

A number of robust scientific and academic studies have emerged over the past 3 years showing that when ILUC emissions are taken into account, the majority of agrofuels are no better for the climate than fossil fuels and, in some cases, are worse. Palm oil, which is used in the production of biodiesel, has one of the biggest carbon footprints. The majority of the raw materials (crops) used for agrofuels in Europe are imported from developing countries, putting pressure on land use – making the EU one of the world’s central drivers of land grabbing for agrofuels.[2] The Nuffield Council Report on the ethics of agrofuels (April 2011) painted a clear picture of the damage that the EU’s growing demand for agrofuels will have on the local people and the environment in producer countries such as Indonesia – as well as setting out an ethical framework to guide policy making for agrofuels.

These studies brought about a strong demand for legislative reform. In particular, something had to be done to stop the impacts of Indirect Land Use Change from agrofuels resulting from rush to fulfil the 10% target for renewable transport fuel.

The October 2012 proposals for amendments to the RED and FQD were the EC’s first attempt to address these concerns through real policy reform. Their key aims were to “limit the contribution that conventional [i.e. food-crop based] biofuels (with a risk of ILUC emissions) make towards attainment of the targets in the Renewable Energy Directive”[3]; to “improve the greenhouse gas performance of biofuel production processes (reducing associated emissions)” [4] and to “encourage a greater market penetration of advanced (low-ILUC) biofuels” [5] (for example, waste and residues such as used cooking oils. At first glance, the proposals looked promising – a step in the right direction for longer-term policy reform. However, the devil is in the detail, and the proposals failed on several levels to end the worst impacts of agrofuels. Go to DTE’s analysis of the EC’s October 2012 proposals.