DTE Agrofuels policy update, January 2011

Commission admits doubts over agrofuels green credentials - but delays further action

At the close of business, 2010, the European Commission formally acknowledged that Indirect Land Use Change (ILUC) can reduce greenhouse gas (GHG) emissions savings of agrofuels and bioliquids – but delayed further action until June 2011.

The Commission’s report on indirect land-use change related to biofuels and bioliquids, released on 22^nd December, follows two years of studies and public consultations into the effects of Indirect Land Use Change (ILUC).

Several studies commissioned by the European Commission into the impacts of ILUC indicate that ILUC could significantly reduce the GHG savings potential of agrofuels.   However, Energy Commissioner, Günther Oettinger stated that,due to a numberof “deficiencies and uncertainties”[2] which could have impacts on the result,decisions for further action will be put on hold for a further 6 months. During this time, the Commission will carry out an Impact Assessment to establish whether legislative action is required.  Should the Commission suggest changes to existing legislation, indirect land-use change will be addressed with a “precautionary approach”.[3]

The Impact Assessment will consider four options for potential policy action:

(1) take no action for the time being, while continuing to monitor,

(2) increase the minimum greenhouse gas saving threshold for agrofuels,

(3) introduce additional sustainability requirements on certain categories of agrofuels,

(4) attribute a quantity of greenhouse gas emissions to agrofuels reflecting the estimated indirect land-use impact.[4]

The ILUC review - summary of the process so far

To further examine the question of ILUC and possible measures to avoid negative impacts, the European Commission was required to report to the European Parliament and Council by the end of 2010 on the impacts of possible changes in EU biofuel policies on environmental performance and agricultural production. Particular attention was paid to ILUC effects on GHG emissions. The process of gathering information for the review was based on 3 stages of research:

1. Scientific analysis of ILUC impacts – modeling and scenarios

Due to the complexities of predicting,or retrospectively measuring the conversion of land for agrofuels, it is difficult to measure the precise impact of ILUC resulting from increased agrofuels for the 2020 targets. In an attempt to establish the ‘likely’ impacts, scientists use ‘models’ which aim to predict ILUC scenarios based on selected baseline scenarios (e.g. EU biofuel use in 2020 will be at the same level as 2008) and policy scenarios (e.g. 8.6% share of road transport fuel from agrofuels from crops in EU in 2020). The change in land carbon stocks under each scenario are then calculated, allowing analysts to compare the land use change impact with the greenhouse gas savings (or losses) from replacing fossil fuels with biofuel.[9]

The European Commission launched 4 studies into the impacts of ILUC, as listed below (note: The Global Trade and Environmental Impact Study of the EU Biofuels Mandate (the ‘IFPRI study’) and The JRC study into Indirect Land Use Change from increased biofuels demand provide quantitative analysis of ILUC emissions provide quantitative analysis of ILUC emissions):

• The Joint Research Centre (JRC) study into the Impacts of the EU biofuel target on agricultural markets and land use: a comparative modelling assessment. This report presents the results of an agro-economic impact analysis with the aim of analysing the impacts of EU biofuel policies on agricultural production, trade and land use, within and outside the EU, up to the year 2020.
• The Global Trade and Environmental Impact Study of the EU Biofuels Mandate (the ‘IFPRI study’) analyses the global agricultural production, trade and environmental impact of the EU biofuel policy as set out in the RED. The study was conducted by The International Food Policy Research Institute (IFPRI) based on findings using the MIRAGE model. The IFPRI/MIRAGE model is the only model used for the purposes of the ILUC studies which does not ignore emissions from the oxidation of tropical peat caused by drainage of tropical peat for planting oil palms.The study also pays particular attention to the ILUC effects of the main biofuel feedstocks.
• The DG Energy Literature review provides a review of the various land-use-change modeling exercises, comparing studies’ methodological and data choices rather than their results. It draws on more than 150 contributions related to the topic, highlighting in detail the lack of consensus in methodology and data used in the various modeling exercises and the impacts this has on their results.
• The JRC study (August 2010) into Indirect Land Use Change from increased biofuels demand looks more specifically at biofuel production and the impacts from different feedstocks, providing a comparison of models and results. The report highlights how comparison of the results is made difficult because the models are set up using a variety of different criteria (e.g. different scenarios, using different amounts of agrofuels produced in different parts of the world using a different mix of feedstock).

“Deficiencies and uncertainties” of the ILUC studies

The study of ILUC impacts of agrofuels is relatively new and consensus is far from being reached among scientists on many key aspects of methodology and data.[10] Results vary significantly depending on the specific criteria or scenarios used within each model. Some models fail to consider elements which could affect results significantly. Key issues include:

• Lower crop yields in developing countries. According to the JRC report (August 2010, fourth in the above list), most of the land-use change effects occur outside the EU for biodiesel and wheat bioethanol.[11] However, the models do not adequately account for the extent to which crop production is shifted to developing countries, which generally have lower crop yields and thus require larger land mass to sustain higher production demands.
• The type of land that is being converted.The richness of the ‘carbon stock’ of the converted land is critical when assessing carbon savings or losses. Carbon-rich tropical peat is not considered in land cover data used by ILUC models. However, the conversion of peatland causes worse carbonlosses than any other land type. Failing to account for this can result insignificant underestimation of carbon emissions resulting from ILUC.[12]
• The ratio of anticipated EU usage of bioethanol and biodieselis essential for establishing the real impact of ILUC and resulting emissions.As biodiesel is consistently related to higher ILUC, a higher EU biodiesel share is likely to have a significant impact on predicted ILUC emissions.[13] This is important because the recently published National Renewable Energy Action Plans (see point 2 below) suggest a 2020 ethanol/biodiesel fuel split of 25/75.[14]

2. Public consultation period

A public consultation period on ILUC and agrofuels took place between 30 July 2010 and 31 October 2010. The Commission stated that the consultation was to gain advice on the characteristics of the complex issues of ILUC and how it should be addressed.

Further information on the consultation period, including specific submissions from stakeholders can be found on the EC public consultation webpage and via the European Environment Agency data report on Renewable Energy Projections as Published in the National Renewable Energy Action Plans of the European Member States.

3. Reports by EU Member States on biofuel production – The ‘National Renewable Energy  Action Plans’

Until recently, specific details of the sources and quantities of predicted agrofuel usage for each Members State, up to the year 2020, had not been publically disclosed. Under the RED, Member States were required to submit National Renewable Energy Action Plans (NREAPs) by 30 June 2010. The NREAPs were intended to provide detailed roadmaps of how each Member State expects to reach its share of renewable energyfor achieving the Directive’s legally binding 2020 targets - specifically in regard to agrofuel usage.[15]. They provide critical information for anticipating the consequences of achieving the RED 2020 targets. 

In order to facilitate further analysis and comparison of the information, data from all Member States NREAPs has been collected by the European Environment Agency and is available online at the Energy Research Centre in the Netherlands (ENC). When cross-referenced with the scientific analysis of ILUC impacts (modeling scenarios), the NREAPs provide a foundation on which to make a more concrete prediction of agrofuel usage and ILUC impacts of the RED.

Further studies

A report by the Institute of European Envionmental Policy (IEEP), presents a first attempt to analyse the data presented by the Member States NREAPs to ascertain the agrofuels-related ILUC impacts of the demand generated by the RED targets. The report confirms thatadditional demand for agrofuels will be met through an increase in the amount of land devoted to agriculture worldwide and that this increase is likely to result in zero or negative net GHG savings for the majority of agrofuel feedstocks used to reach the RED target.This would result in failure to achieve the goals of both the FQD and the RED in 2020.[16]

At the time of writing the IEEP report, 23 of the 27 NREAPs had been submitted. Based on the results of the 23 Plans, the report anticipates that, by 2020, 8.8% of the total energy in transport would be fulfilled through agrofuels – with 72% of this demand being met though biodiesel, which has been found to result in higher rates of Land Use Change than bioethanol. Furthermore, the RED will stimulate an additional demand of 15, 047 ktoe (kilotons of oil equivalent) for agrofuels sourced from conventional (i.e. first generation) feedstocks by 2020 (from 2008 figures). This is anticipated to lead to between 4.1 and 6.9 million hectares of ILUC – an area just larger than Belgium.[17]According to the IEEP report, the “use of additional conventional biofuels up to 2020 on the scale anticipated in the 23 NREAPs would lead to between 80.5% and 167% more GHG emissions than meeting the same need through fossil fuel use.”

According to the IEEP, for the period of 2011 to 2020, the additional emissions resulting from the ILUC impacts of Member State biofuel usage would be between 27 and 56 Mt CO2e per year - the equivalent to between 12 and 26 million additional cars on the road across Europe in 2020.

A further study by Ecofys, a leading renewable energy consultancy, states that zero out of 8 studied biofuel pathways meets the RED threshold in 2020 (based on typical RED values).[18]  The study also clearly illustrates that, not only do none of the biodiesel feedstocks reach a 50% threshold, but all are anticipated to produce higher GHG emissions than fossil fuels when ILUC impacts are taken into consideration. Palm oil is the second most GHG polluting feedstock, with an anticipated 115g CO2eq/MJ (see graphs 1 and 2).[19]

The Ecofys report supports the findings of the Commission’s studies that ILUC impacts of land-using agrofuels are substantial and, in most cases, result in zero or minus net GHG savings.[20]

The IFPRI study, although conservative in its estimates, provides the best available information for calculating feedstock specific ILUC factors. However, more focused assessment of ILUC emissions for small increases in consumption of specific agrofuels feedstockwould better reflect actual differences in feedstock emissions. A feedstock specific ILUC factor should be an immediate consideration for policy development.

ILUC impacts - beyond greenhouse gas emissions

The focus on ILUC and GHG emissions should not mask the fact that the social and human rights impacts of agrofuels also need to be urgently addressed. The JRC report (July 2010) states that “any direct pressure on global food markets due to EU biofuel policies will concern vegetable oils rather than grains or sugar”.[21] Indonesians have already suffered the impacts of rocketing cooking oil prices due to 'biofuel fever'.[22] As documented by Sawit Watch and others, the expansion of oil palm plantations in the country is leading to serious violations of human rights, including the rights of indigenous peoples.[23]

It is clear from scientific evidence and information provided through the NREAPs that the current demand for agrofuels will breach the sustainability criteria proposed by the RED and FQD and undermine the Directives' key objectives. The NREAPs show that few Member States have focused their efforts on investing in alternative renewable transport options or greater efficiency in their transport sector outside the use of agrofuels. These options would reduce the burden on the climate, biodiversity and communities, who suffer the real costs of agrofuel production across the world.

The Precautionary Principle

As Member States scramble to reach the 2020 targets, solutions to policy demands should not come at the cost of people and planet.

For the European Union, the application of the Precautionary Principle is a statutory requirement.[24] Where scientific data are insufficient, inconclusive or uncertain and where preliminary scientific evaluation shows potentially dangerous effects for the environment and humans, the precautionary principle is applicable.[25] The commission has adhered to two of the three rules which need to be followed for the precautionary principle to be observed: it has completed a scientific evaluation and allowed participation of all interested parties in the process.[26]

The third rule, “to provide an assessment of the potential risks and the consequences of inaction”[27]is still in play. The uncertainties in ILUC estimates shouldnot be used to justify Commission inaction or delay, or the consequences of inaction may be irreversible.

It is now essential that the Commission sticks by its 22^nd December promise to take a “precautionary approach”[28] and pays heed to its requirement to implement the Precautionary Principle regarding ILUC and agrofuels.

Dates to watch

Public Consultation on the Energy Roadmap 2050

On 20 December 2010 the European Commission opened a public consultation on the Energy Roadmap 2050, which it will be proposing in the second part 2011. It will follow the Roadmap for a Low-Carbon Economy by 2050 which will focus on reductions in greenhouse gas emissions across the EU economy, in the context of the European Council's target of an 80-95% reduction in EU greenhouse gas emissions below 1990 levels by 2050. The consultation closes on 7 March 2011.

For more information and to fill in the online questionnaire go to: http://ec.europa.eu/energy/strategies/consultations/20110307_roadmap_2050_en.htm

Useful links

Report from the Commission on ILUC related to biofuels and bioliquids: http://ec.europa.eu/energy/renewables/biofuels/doc/land-use-change/com_2010_811_report_en.pdf

ILUC Studies (2010) :

• EC website http://ec.europa.eu/energy/renewables/studies/land_use_change_en.htm
• Impacts of the EU biofuel target on agricultural markets and land use: a comparative modelling assessment http://ec.europa.eu/energy/renewables/studies/doc/land_use_change/study_jrc_biofuel_target_iluc.pdf
• Global Trade and Environmental Impact Study of the EU Biofuels Mandate (IFPRI): http://ec.europa.eu/energy/renewables/studies/doc/land_use_change/iluc_completed_report.pdf
• The Impact of Land Use Change on Greenhouse Gas Emissions From Biofuels and Bioliquids: A Literature Review:http://ec.europa.eu/energy/renewables/studies/doc/land_use_change/study_3_land_use_change_literature_review_final_30_7_10.pdf
• JRC Report into Indirect Land Use Change from Increased Biofuels Demand: http://ec.europa.eu/energy/renewables/studies/doc/land_use_change/study_4_iluc_modelling_comparison.pdf

Further studies on ILUC and agrofuels:

• Institute for European Environmental Policy (IEEP).  November 2010. Anticipated Indirect Land Use Change Associated with Expanded Use of Biofuels and Bioliquids in the EU -  an Analysis of the National Renewable Energy Action Plans: http://www.ieep.eu/publications/pdfs/2010/iluc_analysis.pdf
• Ecofys. September 2010.  Indirect effects of biofuel production: Unraveling the numbers. Available at: http://www.theicct.org/workshops/iluc_sep10/ICCT_ILUC_workshop_Ecofys_Sep2010.pdf

National Renewable Energy Action Plans - European Environment Agency. 13 December 2010. Renewable Energy Projections as Published in the National Renewable Energy Action Plans of the European Member States.L.W.M. Beurskens M. Hekkenberg. Available at: http://www.ecn.nl/docs/library/report/2010/e10069.pdf

Information regarding the EC ILUC Public Consultations: http://ec.europa.eu/energy/renewables/consultations/2010_10_31_iluc_and_biofuels_en.htm

The Precautionary Principle: Europa Glossary:http://europa.eu/scadplus/glossary/precautionary_principle_en.htm

This is the second in our series of updates on agrofuels at EU level. The first update produced in May 2010 is available in English at http://www.downtoearth-indonesia.org/story/agrofuels-policies-and-campaigns-eu-level and in Indonesian at http://www.downtoearth-indonesia.org/id/story/pembaruan-tentang-kebijakan-dan-kampanye-agrofuel-di-tingkat-uni-eropa

Notes                      
 

[1] Solomon. S. et al. 2007: Technical Summary. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change.Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA http://www.ipcc.ch/pdf/assessment-report/ar4/wg1/ar4-wg1-ts.pdf

[2] Europa, Press Releases Rapid. 22 December 2010.  Biofuels: Commission adopts Report on indirect land use change. Reference:  IP/10/1772. Available at: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1772