EU proposes limits on the use of crop-based biofuels

18 October 2012

The European Commission published a proposal to limit the use of food-based biofuels and to include indirect land use change (ILUC) emissions when assessing the greenhouse gas effect of biofuels. The use of food-based biofuels to meet the 10% renewable energy target of the Renewable Energy Directive will be limited to 5%.

The proposal represents a major shift in the EU biofuels policy. The 2009 Renewable Energy Directive requires a 10% share of biofuels in the transportation sector. In addition, the Fuel Quality Directive set a target of a 6% GHG reduction for fuels used in the transport sector in 2020. These targets have been widely criticized as scientific evidence increasingly indicates that the GHG emission benefit of many biofuels has been overestimated. When ILUC emissions are taken into account—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 GHG emissions as the fossil fuels they replace. The EU biofuel mandates also caused massive environmental degradation in palm oil producing countries, where jungle has been converted into palm plantations, and put upward pressures on food prices.

The Commission’s proposal would amend the current Renewable Energy and the Fuel Quality Directives. Some of the key points of the proposal are:

To increase the minimum greenhouse gas saving threshold for new installations to 60% in order to improve the efficiency of biofuel production processes and to discourage 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% target for renewable energy in the transport sector by 2020, to the current consumption level, 5% up to 2020, while keeping the overall renewable energy and carbon intensity reduction targets;
To provide market incentives for biofuels with no or low ILUC emissions, and in particular for 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% renewable energy in transport target of the Renewable Energy Directive.

In the absence of any significant sources of non-crop based biofuels, the 5% limit will put into doubt the 10% target for biofuels in the transportation sector. In order to meet the 10% target, at least nominally, the Commission proposes to multiple-count the share of biofuels made from certain feedstock. Biofuels from algae, certain municipal and industrial waste, straw, animal manure, sewage sludge, palm oil mill effluent, crude glycerin and some other sources would be counted towards the regulatory targets at four times their energy content. Biofuels from used cooking oil, animal fats, and non-food cellulosic and ligno-cellulosic materials would count twice their energy content.

The proposal introduces three ILUC emission factors—for cereals (12 gCO_2eq/MJ), sugars (13 g) and oil crops (55 g). As ILUC emissions must be calculated when biofuels are used to meet the 6% GHG intensity reduction in transportation fuels, the high ILUC factor for oil crops could disqualify most biodiesel made from rapeseed, soybeans, as well as palm oil. With the much lower ILUC factor for cereals, this could also potentially lead to a wider use of ethanol in gasoline.

While the proposal does not affect the possibility for Member States to provide financial incentives for biofuels, the Commission stated that in the period after 2020 biofuels should only receive financial support if they lead to substantial greenhouse gas savings and are not produced from crops used for food and feed.

Source: European Commission: Press release | COM(2012) 595