Proposals to amend EU biofuels legislation have proved divisive, with Parliament's left and right-wing parties clashing over what restrictions to impose on the multi-billion euro industry, that some scientists link to food price hikes and deforestation.
In 2008, the EU set a target for renewables to comprise 10% of transport fuel by 2020, most of which would come from feedstock-based 'first generation' biofuels. But the latest EU proposals aim to keep the industry’s expansion in check following evidence that the sugar, cereal or oilseed-based fuels may be less environmentally friendly than first thought. The policy "U-turn" has angered the industry, which has invested heavily in first generation biofuels and become largely dependent on government subsidies.
The Parliament’s environment (Envi) committee voted in July for a 5.5% cap on food crops and crops used just for energy purposes in the EU’s 2020 transport fuel mix. This came off the back of studies showing that some biofuels had a stronger greenhouse gas effect than fossil fuels due to a phenomenon known as indirect land-use change (ILUC).
ILUC is a way of calculating the net CO2 release that biofuels cause by way of displaced agricultural production and, often, campaigners say, deforestation. The industry doubts the science behind ILUC, claiming that the complex scientific models used have miscalculated and overstated the negative effects of biofuels expansion. In July, the EU’s Joint Research Centre (JRC) provided MEPs with a study showing that historical evidence backed up the models indicating strong ILUC factors.
The Envi report includes proposals for ILUC to enter EU legislation for the first time, under the Renewable Energy Directive (RED) and the Fuel Quality Directive (FQD) in 2020. The RED amendment would require EU countries to make up their renewable energy targets using fuels which were proven to have a low ILUC impact within two or three years, a "quantitative" approach. Under the FQD proposal, fuels would need to show that they offer a minimum 60% reduction in CO2 emissions compared to fossil fuels from 2018, a "qualitative" approach.
The industry committee report, however, includes just a 6.5% cap on biofuels and no ILUC proposal. Instead, it offers a higher sub-target for 'advanced' biofuels with low net greenhouse gas emissions, such as waste residues or fuels produced from algae. These two reports and a third proposed by the Parliament’s Liberal ALDE group will all go to vote.
Corinne Lepage, the French MEP on the Envi committee with the lead on the dossier, has proposed a down-the-middle 6% cap and ILUC factors in just the Fuel Quality Directive in 2020.
Lepage drove through the third alternative after she was unable to cut a deal on ILUC with the industry committee’s ‘shadow rapporteur’, the Spanish MEP Alejo Vidal-Quadras, of the centre-right European People's Party (EPP), the largest EU political group.
MEPs from the EPP, the European Conservatives and Reformists and the European Free Alliance support the industry committee report.
"Negotiations with the EPP have been difficult. They didn't show much will to compromise," said a spokesperson for Lepage. Lepage's compromise proposals came instead as the result of a deal struck with a Danish Liberal MEP dealing with biofuels on the industry committee, Jen Rohde (ALDE).
"It shows that it is possible to find common ground in the Parliament," Lepage's spokesperson said.
At a biofuels debate in the Parliament last week, the Socialists and Democrats (S&D), the second largest EU political group, declared their support for the Envi report but with the inclusion, from 2018, of "grandfathering" ILUC factors into the two directives, a proposal close to the ALDE report. The "grandfathering" proposal should protect first generation biofuels producers from the policy change ending public support for their industry.
The Greens and the European United Left-Nordic Green Left also support the Envi report.
Privately, campaigners see the inclusion of ILUC factors as unlikely, lesser still in both the renewable energy and fuel quality directive.
But Lepage's spokesperson said she was optimistic about including ILUC accounting in the fuel quality directive.
"I think Mrs Lepage will regret that it was not possible to find a compromise with all the groups. But she's cautiously confident there will be an agreement with on the [ALDE] compromise."
Lepage is known to support moves towards advanced biofuels and the inclusion of ILUC and sustainability criteria.
“ILUC exists,” Lepage said at a debate with industry officials and environmentalists on Thursday. “We should not act as if it doesn’t.”
But a spanner may be thrown in the works as both industry and environmental sources have openly questioned whether the vote could be delayed due to German MEPs’ involvement in the upcoming national election. A legislative delay would represent a victory for the biofuels industry.
A study by the International Institute for Sustainable Development (IISD), published yesterday (9 September), set EU biodiesel demand as the main driver of palm exploitation in the rest of the world, in particular Indonesia, the largest exporter of the cash crop.
While traditional drivers of palm oil demand such as the food and cosmetics industries have remained stable since 2006, use for fuel has increased sharply. Palm oil now represents 20% of the EU’s biodiesel mix, the study says.
“10% of oil palm goes to biodiesel,” said Nur Hidayati, head of campaigns for Walhi/Friends of the Earth Indonesia. “EU policy is creating the demand.”
Hidayati told EurActiv that the Indonesian government had put in place policies to limit the freedom of expression of local victims of land-grabs so it could meet EU biofuels demand.
The European Biodiesel Board questioned the timing of the report to coincide with the beginning of the debate in Strasbourg. The EBB said in a statement that the report came to a "very simplistic and thus approximate conclusion, highlighting that the more biodiesel is produced in Europe and the more palm oil risks to be used".
The EBB added: "Biodiesel is only responsible for a very marginal part of palm oil demand (maximum 10 to 13%), which is imported under stringent EU sustainability rules".
Lepage said: "It is clear that European policies have an effect on the outside world."