DTE agrofuels policy update, July 2011

In January 2011, DTE published an update on the European Union’s (EU) policy developments regarding Renewable Energy Directive (RED) (2009/28/EC) and the Fuel Quality Directive. It focused on the National Renewable Energy Action Plans and recent scientific research which assessed the potential impacts of Indirect Land Use Change (iLUC)1 resulting from increasing agrofuel demand (see DTE Agrofuels Policy Update, January 2011 for more information).

With the European Commission set to announce its new policy to address iLUC impacts in July, the pressure on the EU to ensure sustainability of agrofuels is growing. This latest DTE update, written in June 2011, outlines the key development since the European Commission’s report on indirect land-use change related to biofuels and bioliquids (December 2010) and discusses some of the views and concerns regarding the options under consideration.

For a brief summary of last year’s key policy developments click here.

The agrofuels debate in 2011 – where to from here?

2011 is a critical year for EU action to halt the irreversible damage resulting from current agrofuels policies. The Commission’s sustainability report, due for publication in July this year, will set the trajectory for future agrofuels sustainability standards. Will Europe take the appropriate steps to constrain emissions from agrofuel production and redirect policy onto a sustainable path for the future?

The iLUC debate – opposing views on assessing sustainability

It has been calculated that over a 20-year period biodiesel will make no net savings in greenhouse-gas emissions compared to the fossil fuels that it is replacing.2 A number of studies show that, when ILUC is taken into account, emissions from certain agrofuels could indeed be greater than fossil fuels.3 The challenge of how to include iLUC impacts in sustainability assessments has prompted complex political, methodological and scientific debates. Views on solutions cover a broad spectrum. Currently, the Renewable Energy Directive (RED) stipulates that “the greenhouse gas emission saving from the use of biofuels and bioliquids shall be at least 35 %” in order to qualify towards the 20% renewable energy target by 2020.4 Leaders in the agrofuels industry mainly reject raising the threshold on sustainability safeguards. Géraldine Kutas, the acting head of the Brazilian Sugarcane Industry Association’s (UNICA) office to the EU, argues that the science is “not mature enough” to justify the implementation of an iLUC factor, stating that the calculation of the magnitude of ILUC impacts is currently a “magic number” and thus cannot provide a solid foundation on which to advise policy.5

A recent report by Germany’s Öko Institute6 (commissioned by the European Parliament’s environment committee) was presented to Members of the European Parliament in May 2011. The report states that the science has sufficiently advanced for the EU to include the effects of iLUC in its sustainability criteria. This only adds to the pressure on the Commission to implement legislative change for more rigorous sustainability assessment.

Addressing iLUC impacts in sustainability assessment

In 2009, the Commission recognised the need for green safeguards and set sustainability legislation in the RED. This required agrofuels to save at least 35 % of greenhouse-gas emissions when compared to fossil fuel.7 Currently, only voluntary certification schemes, accredited by the Commission, are used to assess whether agrofuels meet these sustainability criteria. The degree to which these schemes are making improvements on the ground is questionable. Moreover, the current sustainability criteria do not include the effects of iLUC.

As we reported in our last update, the Commisson’s iLUC impact assessment is focused on the assessment of the following 4 policy options:

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

2. increase the minimum greenhouse gas saving threshold for agrofuels (not differentiating between individual feedstock types),

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 (as for option 3, no differentiation between feedstock types).

Option 1 is unlikely to be adopted due to growing evidence of the impacts of iLUC. Options 2 and 4 have been criticised by green and human rights groups for failing to address the specific impacts of the most damaging agrofuel feedstocks (such as oil palm grown on carbon rich peat soils). Further concerns are that existing voluntary certification schemes are weak and can be swayed by industry lobbying and political pressures. Raising the greenhouse gas saving threshold could allow for loopholes in assessment of the impacts of specific feedstocks and allow industry to market a green image without effectively addressing the four main social and environmental impacts (as listed in our 2010 summary. Option 3, which could involve adding ‘penalty points’ to individual agrofuel feedstocks, is a scheme recently proposed and otherwise known as the ‘iLUC Factor’. Feedstock-specific iLUC factors are aimed at identifying which agrofuels will increase or help to reduce greenhouse gas emissions, in comparison with fossil fuels. This option could better identify (and potentially eliminate) those feedstocks which present real risks of increasing greenhouse gas emissions.

Arguably, the most effective way to avoid the impacts of iLUC is to establish less ambitious RED mandates8 and to incentivise other forms of renewable energy. David Laborde of the International Food Policy Research Institute (IFPRI), who was given the task by the Commission of studying the effects of iLUC, calls into question the EU target of deriving 10% of transport fuel from renewable energy by 2020.9 Laborde advises that a ‘less ambitious mandate’ is advisable. This option is currently not under consideration by the Commission.

Of the options currently under consideration, the iLUC factor is the potentially most effective in ensuring the EU’s agrofuels policy moves in a more sustainable direction for curbing greenhouse gas emissions. However, the iLUC factor does not address social and environmental impacts relating to competition for land for food production, human rights abuses and biodiversity loss.

Agrofuels and human rights: out of sight, out of mind?

Reliance on producer countries to supply agrofuels (often developing countries such as Indonesia and Brazil) allows EU countries to import the benefits of agrofuels while ignoring the social impacts playing out in distant countries. Even with the application of the iLUC factor, agrofuels will have negative impacts on basic human rights and environmental security. Studies suggest that biodiesel (produced from vegetable oils) presents a higher risk of increasing greenhouse gas emissions than bioethanol (produced from crops such as sugar cane and wheat).12 The iLUC factor is likely to result in more stringent sustainability regulations for biodiesel feedstocks (such as palm oil from Indonesia). However, production from bioethanol feedstocks, which are likely to pass sustainability assessments, may see an increase in production. This could intensify competition for land otherwise designated for food production, damage biodiversity and exacerbate human rights issues in countries such as Brazil - one of the world’s largest bioethanol producers.

The ethics of agrofuels

European governments have turned a blind eye to the policy implications of human rights breaches that occur as a direct or indirect result of EU agrofuel demand. This is despite ample evidence from Indonesia for example, documenting incidences of intimidation and violence against community members by the security forces when oil palm plantation developers take over local communities’ land without their consent.13

A recently published report by the Nuffield Council on Bioethics has turned the spotlight on these issues. The report also provides recommendations and a framework for more ethical policy development for the future. For a summary of the Nuffield report, “Biofuels: ethical issues”, click here.

Organisations such as the Nuffield Council on Bioethics and the IFPRI remain optimistic that new technologies for more sustainable forms of agrofuels which require less land and fertilizer will minimize environmental and social impacts.14 However, without international government incentives, technological progress to develop more sustainable agrofuels is too slow and the costs too high.

An ethical duty to repair ‘flawed’ policy

It is increasingly clear that agrofuels will not deliver the ‘silver bullet’ solutions that governments had first hoped. By mandating agrofuels that are not sustainable, the Commission is undermining its own climate change policy.

The design of RED policies were originally flawed by encouraging rapid and large-scale adoption of agrofuels production at a time when the science was not mature enough to forecast the full environmental and social impacts associated with such a vast scale of production. Furthermore, agrofuels policy has been influenced by stakeholders and interest groups who predominantly have financial profit rather than environmental protection or human rights as their primary concern.

The Commission has an ethical duty to recognise the inadequacies in current policy and rapidly respond to new scientific research on the impacts. It should learn lessons from its failure to take the precautionary approach to tackle on climate change at an early stage. Over the past two decades, powerful business interests and climate deniers have mounted campaigns to undermine action to implement climate change mitigation policy, denying that a precautionary approach was needed even in the light of strong scientific evidence. Similarly, business interests today are attempting to undermine the growing body of science which clearly indicates the huge problems associated with agrofuels use - putting a brake on urgent policy decisions to mitigate the negative impacts of agrofuels.

The severity of potential impacts and degree of risk associated with agrofuels warrant the precautionary approach when considering legislative change to sustainability criteria. The Commission must stand by its commitment, stated in its December 2010 report,15 to adopt the precautionary approach and prioritise policy options which minimise both the environmental and social impacts of agrofuel production. It should also be clear that precautionary principles are designed to protect people and the environment, not business.

 Notes