Creating a more sustainable biofuel policy

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The European Commission’s proposal to amend the Renewable Energy Directive should be welcomed as a first step towards the elimination of the adverse impact of biofuels. But more incisive action is badly needed in the future, writes Enrico Partiti.

Enrico Partiti is a doctoral fellow at the University of Amsterdam specialising in social and environmental standardisation.

As anticipated by a draft leaked in September, the Commission proposal for the amendment of the Renewable Energy Directive aims to address the adverse effects on food prices and in particular land-use change resulting from the EU support to the biofuel industry, by encouraging the transition from first-generation, or ‘conventional’, biofuels - produced from food-crops such as wheat, sugar and rapeseed - to second-generation biofuels.

The latter, also known as ‘advanced biofuels’, are obtained from non-food sources such as biomass, algae and municipal solid waste, and deliver higher greenhouse gas savings when the full production circle is considered.

The proposal tackles in particular one of the several controversial issues related to first-generation biofuels, the so-called indirect land use change (ILUC). The employment of food-crops for biofuel production rather than human consumption results in a restrain on the supply side that requires that new and previously uncultivated land is put to use.

This can cause substantial carbon emissions and loss of biodiversity.

When the Commission published its proposal for minimising the environmental impact of biofuel production by including also emissions resulting from ILUC in the calculation of greenhouse gas savings of biofuels, heated reactions ensued from producers and environmentalists alike.

Producers vocally complained against the introduction of a 5% cap of first-generation biofuels towards the attainment of the EU’s 10% target for renewable energy in transportation and the withdrawal of subsidisation for conventional biofuels: two measures that could potentially halt the development of the conventional biofuel industry.

Environmentalists deplored the missed opportunities to scrap the EU biofuel mandate altogether. Only this action, in their view, would limit the surge in food prices and the global rush for cultivable land, also known as land-grabbing, fueled by the European support of the biofuel industry.

ILUC, as also explained in the impact assessment document accompanying the Commission’s proposal, is a phenomenon that cannot be observed nor measured precisely.

In addition, the application of the precautionary principle was unavoidable considering the conflicting scientific evidence concerning the amount of greenhouse gas emissions resulting from ILUC, and the solutions put forward by the Commission seem to implement it effectively.

It is however regrettable that the Commission has failed to extend the application of the same precautionary approach to wider environmental and social concerns relating to the negative social and environmental consequences of extensive biofuel plantations, particularly in Africa, where they could even result in massive expropriations and human rights violations, including the human right to food, according to the United Nations’ Special Rapporteur on the Right to Food Olivier De Schutter.

A wealth of report and studies from NGOs and international organisations such as IIED-FAO, the World Bank and Oxfam, has shown that foreign investors are taking control of vast portions of land for biofuel production and export in their home countries, stripping local peoples of their land, which is oftentimes the only source of livelihood. Social tensions are aggravated, biodiversity is lost, and food prices are pushed up. None of these factors, unfortunately, is considered in the Commission proposal when assessing biofuels sustainability.

Since also public perception of first-generation biofuels is shifting and consumers are increasingly aware of their negative consequences, producers of conventional biofuels are now under pressure both from the regulatory and the market side.

Influencing the legislative process and attempting to maintain subsidisation of first generation biofuels, while responding at the same time to consumers demands for sustainability, has become a pressing need for the industry. As the Commission is of the view that after 2020 only biofuels which lead to substantial greenhouse gas savings will be eligible for subsidisation, producers do not have many options other than to walk the extra mile and strive to eliminate, or at least reduce drastically, all adverse environmental, and possibly also social, externalities arising from biofuel production.

They could do so by deciding to voluntarily comply with more stringent requirements addressing effectively social and broader environmental issues. As a starting point could be to set stricter common sectoral rules that level the playing field.

Subsequently producers could even employ market-based instruments such as labelling schemes and certifications already recognised by the Commission. In this way, biofuels addressing broader environmental and societal concerns could be readily identified by consumers and business operators, and could benefit from a competitive advantage on the marketplace.

For instance, out-grower systems could be established in the vicinity of the fuel-crops plantation in order to provide the affected population with sufficient food-crops for their consumption and thus mitigating the impact on food prices. Intensive monoculture could be discouraged to prevent loss of biodiversity, or reforestation zones could be established to counterbalance greenhouse gas emissions.

The biofuel market, to a large extent created and managed by EU regulators, represents a textbook example supporting the case for sectorial voluntary regulation, where it is in producers’ interest to act voluntarily and set new and more stringent rules to avoid even stricter ones, a de facto ban on conventional biofuels in this case.

Producers have therefore the option to address the issues left aside by the Commission and eliminate the adverse consequences of their products. Otherwise, the transition to second generation biofuels would really be ineluctable, also because it appears feasible from an economic perspective.

In either case, the possible elimination of food-based biofuels would most certainly be welcomed  by the almost one billion people that suffer from hunger every day. To them, it makes a little difference whether the solution comes from the Commission or from biofuel producers.