Biofuel debate a political hot potato as EU renewable energy law nears home straight

Talks over how to decarbonise the EU’s transport fleet are heating up. As policymakers prepare the bloc’s renewable energy targets for 2030, part of the debate has crystallised around the role of biofuels. And farmers are getting increasingly vocal.

Vehicles in Europe currently run on a mix of fossil fuels, biofuels and electricity. Under the 2009 Renewable Energy Directive (RED I), the EU committed to generating 20% of its energy mix from renewable sources, while capping the share of biofuels used in the transport sector at 7%.

The aim of the policy was to decarbonise the transport sector, but it has always been controversial. As the directive comes up for renewal, the debate over its achievements is still raging.

While biofuels burn more cleanly than fossil fuels, producing less carbon dioxide and other pollutants, critics argue this is just one side of a bigger issue. On the other side, they say, are hidden carbon emissions from indirect land-use change (ILUC), as biofuels displace food production and farmers are forced to reclaim land from carbon-rich ecosystems such as forests and peatlands, as well as negative societal impacts such as increased food prices.

To address these criticisms, the EU executive proposed in November 2016 a revised Renewable Energy Directive (RED II), to cover the period 2021 to 2030. The proposal calls for a further increase in the share of renewable energy in the EU’s mix to at least 27% by 2030. At the same time, it aims to cut the use of crop-based biofuels to 3.8% of transport fuel and shift the market towards so-called advanced biofuels, created from waste and residues, rather than food crops.

The directive is currently under negotiation in the European Parliament, where more than 1,300 amendments have been submitted. The Parliament’s Committee on Industry, Research and Energy (ITRE), is leading the assembly’s work on the draft legislation, and will vote on the new biofuels proposals in November ahead of a final plenary vote expected in January 2018.

Focus on the best alternatives

“The current EU biofuels policy has not driven the best alternatives, mainly because of a focus on quantity rather than quality,” Laura Buffet, clean fuels manager at the NGO Transport and Environment (T&E) told EURACTIV.com.

Biodiesel accounts for around 80% of the EU biofuels market. Around one-third of this is made from palm oil, with the remainder made from crops such as rapeseed and soy.

According to T&E, the climate impact of EU biodiesel is on average 80% worse than fossil diesel, when emissions from indirect land-use change (ILUC) are taken into account. But neither RED I nor RED II adequately address ILUC in their sustainability criteria, the NGO says.

“The science is clear,” said Buffet, who called for crop-based biofuels to be completely phased out by 2030 and replaced by advanced biofuels and renewable electricity. “Most of the EU biofuels market is made of food-based biofuels which have negative indirect land-use change impacts.”

But EU farmers disagree. They say the net impact of biofuels has been positive for the climate. “The development of first-generation biofuels resulted in some 35Mt of gross avoided CO2 emissions in 2013,” said a recent report by Copa-Cogeca, the association of European farmers and agri-cooperatives.

The report, entitled ‘Phasing out first generation biofuels: what is at stake?’ also stated that thanks to biofuels, the EU saved €30bn per year on fossil fuel imports.

Ethanol as a transition fuel?

The ILUC impact of crop-based bioethanol, which accounts for the other 20% of the EU’s biofuel use, is much lower, and its supporters say it could serve as a longer-term transition fuel for European transport.

“Road transport in Europe will need liquid fuels for a long time,” Emmanuel Desplechin, secretary general of ePURE, the European renewable ethanol association, told EURACTIV.

“From a lifecycle standpoint, a hybrid vehicle running on an E20 ethanol blend (20% ethanol, 80% petrol) is one of the best solutions we have today,” he added.

According to 2016 figures from ePURE, ethanol used in transport fuel produces 66% lower GHG emissions than petrol, even when land-use change is accounted for.

This claim is supported by the European Commission’s own data: two recent studies have underlined the climate and environmental benefits that higher blends of ethanol in petrol transport fuel could bring, including significant reductions in emissions of pollutants such as hydrocarbons, nitrogen oxides and carbon monoxide.

Yet according to T&E’s calculations, a given area used to produce biofuels for transport could fuel 100 times more electric vehicles if it was covered in solar panels.

“Renewable electricity is the best available option to decarbonise transport fuels at the moment,” Buffet said.

But Desplechin questioned this logic, saying, “Electric vehicles will continue to grow, but even under the most optimistic forecasts they will only make a up a fraction of the EU car market by 2030. So why not make the best of the vehicle fleet we have now and will continue to have for the coming decades?”

Visegrad and Balkans hit out at Commission over biofuels phase-out proposal

The Visegrad and three Balkan countries signed a joint declaration urging the European Commission to reconsider its proposal to gradually phase-out the first generation biofuels after 2020 and think about the consequences.

EU flip-flopping bad for business

After ten years of encouraging investment in biofuels, the Commission’s change of heart “has triggered further uncertainty for investors”, Copa-Cogeca said.

“This is a crucial issue for farmers,” said Desplechin, who supports this view. “The production of crop-based biofuels in Europe generates at least €6.6 billion in direct revenue for farmers per year.”

“It’s a mystery why the Commission would want to abandon them, when even its own scientific evidence points, for example, to the benefits of higher ethanol blends in petrol,” he added.

The Commission’s decision to reduce the cap on biofuels in transport to 3.8% by 2030 is all the more surprising since two reports commissioned by the EU executive concluded that crop-based biofuels do help drive greenhouse gas emissions down.

One report commissioned by the European Commission found that blends of up to 20% ethanol in petrol could deliver significant reductions in GHG emissions as well as other pollutants such as hydrocarbons, nitrogen oxides and carbon monoxide, even when taking into account ILUC. Another study by Ecofys, IIASA and E4tech had similar findings.

“The policy to cap food-based biofuels for transport was assumed without supporting analysis and does not differentiate between the actual greenhouse gas (GHG) performance of biofuels,” including indirect land use change impacts, the EC commissioned report noted.

For Desplechin, too, the drive to reduce biofuel use is not based on solid facts. “The Commission should be engaged in evidence-based policymaking, not policy-based evidence-making,” he told EURACTIV.

Animal feed

Yet another side to the debate revolves around animal feed and Europe’s dependence on imports. Livestock farmers are heavily dependent on imported proteins, which mainly come from South America, but biofuel production generates large amounts of high-protein by-products that can reduce this dependence.

According to Copa-Cogeca, for every litre of biodiesel produced in the EU, the by-products are used to make 1.3kg of protein-rich animal feed. Each litre of bioethanol generates 1.2kg of animal feed.

This has led to a 10% drop in imports of animal feed proteins since 2010. Given that South American farmers tend to get far lower yields per acre than European farmers, advocates even suggest that home-grown EU biofuels mitigate the ILUC impact of animal feed.

New study relaunches controversy about biofuels and food prices

A new study commissioned by environmental NGOs found that the production of first generation biofuels has driven up food prices in Europe, running counter to the European Commission’s own data which found the impact of ethanol “negligible”.

Mercosur and ethanol imports

Beside Europe’s changing regulatory structure, farmers and ethanol producers are concerned by the potential for unfair competition from South America once the EU closes its trade deal with the continent’s Mercosur trading bloc.

Agricultural powerhouse Brazil, a prominent member of Mercosur, is pushing for the EU to accept large quotas of ethanol imports. But for Martin Merrild, the outgoing president of the association of European farmers’ unions COPA, any such deal would expose EU farmers to unacceptable and unfair competition.

“Free trade is very important for farmers,” Merrild said. “But we cannot accept double standards. There will never be fair competition between the EU and Latin America as they do not produce under the same conditions or meet the same standards.”

At a time when policymakers are planning to squeeze future demand for biofuels, “EU producers cannot be left unprotected”, he added.

The view was echoed by ePURE’s Desplechin, who warned that if it agrees to open its markets to Brazilian ethanol, “the EU will contradict its energy and climate policies, kill incentives to invest in new technology, and make life even tougher for Europe’s already struggling farmers”.

“It makes little sense for the EU to want to shrink down the market for ethanol and then give what’s left of that market to Brazilian ethanol producers,” he added.

Brazil tells the EU 'it won't move' on Mercosur talks without ethanol and beef

Brazil insists that it will not table a new offer as part of the ongoing EU-Mercosur talks until a proposal on beef and ethanol is on the table. EURACTIV Spain reports.

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