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Countdown starts for the biofuels’ verdict in the EU

Ahead of the adoption of the Political Agreement on the ILUC dossier in the Energy Council on 12 December 2013, a group of NGOs put out a briefing on the biofuels policy review and on the three main issues in the debate: the cap for land-based biofuels, the weakening of the 20% RED target and the inclusion of ILUC factors for accounting purposes.

The briefing claims that ILUC is a real and tangible problem affecting the sustainability of biofuels” and that “most land-based biofuels currently marketed in Europe offer no or limited carbon emissions savings compared to petrol and diesel”.  On this basis, the NGOs criticise the suggestions of the Lithuanian Presidency and proposes 1) to have a cap for first generation biofuels at current consumption levels (or lower) also applied to the Fuel Quality Directive, 2) to make sure that biofuels produced from waste and residues are actually sustainable and 3) to include ILUC factors for accounting purposes in both the RED and FQD.

A cap such as the one proposed by the Commission and defended by the NGOs is just a clumsy attempt to find a quick remedy to issues that remained unsolved in 2009, bringing no evident benefit in the long term. In fact, such a black and white approach would not take into account the good performances of well-performing conventional biofuels such as sugarcane ethanol. It would actually cut them off the European market and – even worse – it would not take into consideration the bad performances of some advanced biofuels. Within another 5 years the EU might risk finding itself in the exact same situation as today.

Granted, not all the biofuels considered as advanced are actually sustainable. However, NGOs should have applied the same logic the other way around to conventional biofuels. Sugarcane ethanol achieves among the highest greenhouse gas (GHG) emission savings (over 70% relative to fossil fuel alternatives, according to the default values in the EU Renewable Energy Directive, and more than 55% when estimated ILUC emissions are accounted for) of all biofuels produced at scale because of its relatively low indirect impacts and the resource efficiency of its production. Let’s not forget that Brazilian sugarcane ethanol is considered an advanced biofuels in the U.S., and especially in California. Nevertheless, there would be no market for it in Europe if the cap ever enters into force.

While the argument for the introduction of ILUC factors in both the RED and FQD could actually be understood and would take into account important differences between biofuels’ environmental performance, having a strict cap wouldn’t match with it and would penalize, in any case, well-performing conventional biofuels.

Is it not perhaps the time to keep calm and work on a more nuanced and consistent approach to biofuels, without putting any extra burdens on the industries? These, after all, have already invested on biofuels and – this needs to be reminded from time to time – might not be able to invest more in advanced biofuels as a result of the implementation of the current proposal and the absence of a regulatory framework for the medium-long term.

A more structured and effective action to resolve the imbalance between diesel and gasoline in Europe would support the EU climate change policy objectives, and incentives to introduce higher blends of bioethanol in vehicles would help moving away from the most polluting biofuels. Sugarcane ethanol is definitely a good candidate for this purpose and could help the EU reach its objective of decarbonizing the transport sector.

Géraldine Kutas

A seasoned professional specializing in international trade policy, Géraldine Kutas leverages over a decade of experience to strengthen UNICA’s activities across the European Union, the United States and Asia. She has a deep expertise in biofuels and agricultural policies, coupled with extensive exposure to multilateral and regional trade negotiations in agriculture. Ms. Kutas is the author and co-author of several international publications on these topics. Before joining UNICA, she was a researcher and a professor at the Groupe d’Economie Mondiale at Sciences Po(GEM), Paris, and coordinator of the European Biofuels Policy research programme (EBP). Ms. Kutas has also worked as a consultant at the Inter-American Bank of Development and for agro-business firms. Ms. Kutas has a Ph.D. in International Economics from the Institut d’Etudes Poliques de Paris and a Master degree in Latin American Studies from Georgetown University, Washington DC.