Strategy of Leaders of Sustainable Biofuels            

The founding Members of the Leaders of Sustainable Biofuels are the CEOs of Chemtex, British Airways, BTG, Chemrec, Clariant, Dong Energy and UPM. Their strategy is to accelerate research and innovation into emerging biofuel technologies, including algae and new conversion pathways. This R&D would be supported by public and private R&D  programmes.  Further, they will cooperate with the supply chain to develop worldwide sustainability certification and work towards a set-up of financing structures to facilitate the implementation of sustainable biofuel projects.

Read the full manifesto here.

The ‘Leaders of Sustainable Biofuels’  plan to address national policy makers, the European Commission and the European Parliament and invite the rest of the sustainable biofuels industry to join forces with them.

The industry has long argued that a predictable framework for 2020 and post 2020 is absolutely necessary for the policy to industrialize advanced biofuels pathways. Investment decisions must be based on robust assumptions within a long-term framework, which the current framework and the new ILUC proposal fall short of delivering.

The EU current biofuels policy – climate change and food prices impacts

The target of 10 % renewable energy in transport is set out in the Renewable Energy Directive (RED) adopted in 2009 as a part of the EU Climate and Energy package.  The EU also has a 6% road transport emission reduction target under the Fuel Quality Directive (FQD), revised under the climate and energy package.

These targets are expected to be met largely by replacing the use of fossil fuels with biofuels, since electric vehicles are unlikely to play a major role before 2020.  However, research shows that some biofuels currently on the market might not be sustainable, i.e. their production leads to indirect land use changes (ILUC) that cancel out their greenhouse gas savings compared to fossil fuels.  When the biofuels are produced on agricultural land the demand for food and feed crops remains unchanged and leads to someone producing more food and feed elsewhere. This causes land use change by changing for example forest or wetlands into agricultural land. This, in turn, implies that a significant amount of CO₂ emissions is released into the atmosphere. In fact, numerous scientific studies show that when iLUC emissions are factored in, some biofuels may increase emissions compared to the fossil fuels they are meant to replace.

Another problem is the displacement of food production in countries with poor protection of land rights. In recent years, environmental and development NGOs continued to call on the EU to scrap the transport target in the RES and FQD review and in the 2030 renewable energy targets. In fact these targets are likely to be met almost entirely by using biofuels made from food crops, leading to an increase in global food prices. This is confirmed by National Renewable Energy Action Plans, according to which the EU countries will meet more than 9% of their transport targets with biofuels, more than 92% of which is expected to be from crop-based feed stocks. The findings of Oxfam studies show that if the land used to produce biofuels for the EU in 2008 had been used to produce food crops instead, it could have fed 127 million people for the entire year.

The new ILUC proposal and industry reactions

The European Commission revision of the biofuels policy was supposed to propose a correct methodology to factor in iLUC emissions. However, the proposal published in October 2012 failed to do so. The ILUC factors are merely a part of reporting exercise and the fuels suppliers are not prevented from using food-based biofuels to meet the 6% target under the FQD.  

However, the biodiesel and bioethanol industry found the proposal a poor solution for a different reason. The Commission set out a 5% cap on food-based biofuels which means that the EU countries would be prevented from incentivizing the use of more than 5% biofuels produced from cereals, sugar and vegetable oil to meet the 10% the target of renewable energy in transport by 2020.

The industry argues that this will pull out most investment, also in advanced biofuels, because the premise given by the Commission in 2009 was 10 % RES in transport, with no such limitations. The Commission’s tardiness in dealing with this problem has given the industry some valid arguments.  Many investors have prepared their strategies until 2020 with a mainly food crop-derived production. Now they will be obliged to cap it, and invest millions in advanced fuels. With the current economic situation, they are likely to put pressure on member states like Germany and France to oppose the 5% cap. The negotiations of this directive in the Council and the European Parliament, which started in the beginning of the year, might therefore become highly interesting.