The EU’s Radical Shift on Biofuels: How Will Member States Respond?

The European Commission has recently admitted to being wrong in promoting first generation biofuels. By proposing amendments to its Directive on the matter, the Commission intends to limit the role biofuels can make in attaining the EU’s renewable energy targets. In their last meeting at the European Council, a majority of EU environment ministers appeared to be willing to rebuff the Commission’s proposals. Is this a mistake? Yes.

The European Commission’s change of mind

In October 2012, the European Commission proposed to amend a previous directive which encouraged the use of biofuels. Through its Renewable Energy Directive, the European institutions and Member States had agreed in 2009 to achieve by 2020 that 20% of all energy consumption and 10% in the transport sector must come from “so-called” renewable sources of energy, including biofuels which were at that time generally perceived as a clean and renewable sources of energy.

However, in a scientific report published in 2010, the European Commission argued that “emissions from indirect land-use change can vary substantially between food-stocks and can negate some of the greenhouse gas savings of individual biofuels relative to the fossil fuels they replace”. In more simple terms, the European Commission now views some first generation biofuels as potentially negating the emissions savings made in the first place from not using fossil fuels. Indeed, it has often been argued that the high demand for crop-based oils has led to increased deforestation and food insecurity throughout the world.

As such, the European Commission’s latest proposal intends to reduce the contribution that biofuels derived from food crops or causing indirect land-use change (ILUC) to at most half of the 10% quota for renewable transport fuel; the other half being supplied by “second generation” biofuels which do not cause ILUC or come from food crops.

Damaging to the biofuel industry

It is understood that a majority of EU environment ministers will attempt to block the proposal. Indeed, on 11 March 2013, Environment ministers from most European Member States defended their stance by arguing that the science behind the proposal was not strong enough to warrant such strong regulation, a position obviously shared by the biofuel industry. The environment ministers also expressed concern that the cap will do irreversible harm to the biofuel industry itself, a sector worth an estimated €17 billion a year in Europe alone.

Rob Vierhout, secretary-general of ePure, a trade group representing the bioethanol industry, argued that the report is based on a “crystal ball exercise” as no clear scientific methodology exists. He also rejects the claims that biofuels are causing higher food prices –as they are replacing land traditionally used for food- on the basis that food prices have been volatile for decades, even before biofuels came into existence.

The biofuel industry’s rejection of the Commission proposal comes as no surprise. Indeed, on the basis of the proposal, the European executive intends to end all subsidies for crop-based biofuels after the current legislation expires in 2020; a considerable blow to a sector depending highly on subsidies.

A tricky situation for Governments

The similar stance taken by some European leaders is also hardly surprising. Before the European Commission’s change of mind regarding feedstock-based fuels, a significant number of European Member States had already begun investing important sums of public funds into feedstock fuels.

Now that the European Commission has changed its mind regarding the effects of biofuels on carbon emissions, deforestation and global food insecurity, those Member States having significantly invested into biofuels find themselves in a tricky situation. If they were to support the proposal, they would open themselves up to criticism for wasting much-needed public funds or failing to defend their country’s national interest. As such, it comes as no surprise that some European leaders intend to reject the proposed modifications, even if this were to result in further deforestation and food instability throughout the world.

Strong scientific evidence

As for the claims regarding the lack of scientific evidence, they appear to be weak. Indeed, all three agro-economic models used by the European Commission for their report – AGLINK-COSIMO, ESIM, CAPRI – are scientifically acknowledged tools for simulating policy changes within the agricultural sector. All three models used show a “striking degree of consensus” regarding the negative effects foodcrop-based biofuels have on land-use.

Another study by the International Council on Clean Transportation confirms the stance taken by the European Commission claiming that biodiesel from non-waste vegetable oil is “likely to have a worse carbon footprint than fossil diesel. Given that biodiesel production is also expected to be worst for a range of other environmental indicators (e.g. acidification, eutrophication, biodiversity) … than fossil diesel, there is no environmental basis for the EU to continue to support the supply of biodiesel … from non-waste vegetable oil.”

Who to trust?

The critics might be right: there is no crystal-clear answer to the effect that biodiesels have on CO2 emissions, deforestation and food insecurity. Nevertheless, the fact that the studies of two internationally renowned bodies, using a wide variety of research models, have established that there are high chances to be links between the two should suffice in encouraging Member States to change their minds.

The Biofuels industry is not to be trusted on this issue. It would indeed appear rather strange if they were to support a proposal which aims to curb the very existence of their primary source of income; even though it could also provide them with an opportunity to promote second generation biofuels. The European Commission, as well as the International Council on Clean Transportation aims, on paper at least, to work in the interest of the public. Why else would the European Commission, for example, so publically admit that they were wrong to promote first generation biofuels –without regulation- in the first place?

Mr Vierhout –the “Biofuel lobbyist”- condemned the Commission of being “inconsistent”. He certainly has a point. Yet, it could also be said that the European Commission are being brave in admitting to previous mistakes based on a lack of scientific evidence and actually in doing something about it.

It would be good if the European leaders were to take note and support the proposal. Perhaps, by explaining it as such, they might even gain some public support.  Indeed, it wouldn’t be too unwise to tell them that their electorate might not wish to buy costly biofuels that not only increases the cost of our food, but that it doesn’t even help the climate either. There is even something to gain for the biofuel industry who could use the opportunity provided by these proposals to promote second generation biofuels in what could well be an important market in the near future.

As citizens, we can only hope that the majority of our European leaders change their mind and accept these much-needed amendments. Indeed, on the long term, they should perhaps even go all the way and ban crop-based biofuels all together. It’s always good to be optimistic.