• biofuels
  • environmental protection

REDII the final act – crisis adverted

With today’s European Parliament (EP) approval of REDII (495 in favour, 68 against, 61 abstentions) a major milestone on the EU’s biofuels journey has been reached. It’s been a rocky road, and lawmakers have finally agreed a text in the Renewables Directive that gives biofuels a future in Europe – albeit an uncertain one.

For some considerable time there was a very real risk of European policymakers sounding the death knell of the conventional biofuels industry in Europe. But common sense prevailed and the EP and the Council have agreed:

– a target to achieve 14% renewable energy in transport by 2030;

– to keep the limit of 7% of gross final consumption in road and rail transport for first-generation biofuels;

– allowing member states adopt a lower threshold, taking into account best available evidence on the impact of indirect land-use change (ILUC), and

– to set a target of a 3.5% share of advanced biofuels by 2030.

In view of the slow progress in decarbonising transport, the increased renewables transport target is welcome and long overdue. But the question remains what this will mean for the biofuels industry in general and particularly how it will influence the role of biofuels in reducing carbon emissions in transport.

Maintaining the 7% threshold for first-generation biofuels was agreed after a long and tortuous process – with key priorities not to increase deforestation and to safeguard existing investments in the biofuels industry. It seems that the warnings that undermining first-generation biofuels would kill the very industry that is supposed to develop second-generation biofuels were heeded. However, the fact remains that allowing member states to individually lower this threshold undermines the future of the biofuels industry in Europe and these very investments the compromise sought to protect.

It is also highly questionable whether limiting the threshold for biofuels in Europe will achieve its stated objective of reducing rainforest deforestation. Determining what kinds of biofuels lead to a high risk of land-use change or deforestation has proven to be extremely difficult, and it’s an open question whether the European Commission will be successful in setting effective criteria for high-ILUC-risk biofuels through delegated acts.

Clearly different biofuels have very different sustainability credentials and cannot be treated the same. Brazilian sugarcane ethanol is among the biofuels achieving most greenhouse gas savings while having an excellent sustainability performance. It would therefore have been more effective to further improve and enforce existing certifications schemes and support their implementation in other regions. The review has missed this opportunity.

The 3.5%-by-2030 share for advanced biofuels is also extremely ambitious. Achieving this target will require the construction and operation of more than 50 second-generation production units in Europe by that date. Our experience in Brazil demonstrates that a key element for success is by co-locating second-generation plants with a well-functioning first-generation production unit.  So attempting to curtail first-generation biofuels will not be conducive to developing a robust second-generation industry.

Europe is at risk of being left behind in the development of biofuels and it is questionable whether the long hoped for breakthrough in advanced biofuels will happen here. The latest IEA report on renewables shows that further efforts are necessary to decarbonise transport. Currently it is expected that renewables in transport will grow from 3.4% in 2017 to just 3.8% by 2023. Considering that biofuels make up 90% of this share, it is clear that without increasing biofuels the transport sector will continue to emit GHGs for a long time.

Ahead of COP24, and bearing in mind the need to reduce global warming to less than 2 degrees Celsius, the transport sector must contribute its share, and for that we need a sound biofuels policy as the example of Brazil shows. Transport emissions only account for 10% in Brazil (21% in Europe) but the country is committed to further reduce its carbon footprint and with the new RenovaBio policy framework it is on track to drive the growth of the alternative fuels industry.

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.