This article is part of our special report Is EU biofuel policy realistic enough?.
The European Commission’s recent report on the future of the EU’s protein strategy is a “missed opportunity” as it ignores domestic biofuels production, the EU ethanol industry has said.
“Not including domestic biofuels production in the long-term protein strategy is a missed opportunity,” said Emmanuel Desplechin, secretary-general of the EU ethanol association (ePURE).
“Here’s an issue where the EU is working against its own interests: urging an increase in domestic protein production but pushing an energy policy that discourages European farmers from contributing to it,” he added.
The European production of protein crops is not sufficient to cover demand due to several reasons, including climate conditions.
According to the EU executive, the EU imports annually around 17 million tonnes of crude protein, of which 13 million tonnes are soya-based.
In order to tackle this protein deficit, the EU Commission has proposed a protein strategy for the long run.
However, the ethanol industry insists that the Commission’s goals clash with reality as sustainable local production is disregarded.
ePURE says European ethanol production reduces the need for imports of soybean and other feeds from regions of the world with less sustainable agricultural practices.
“In 2017, ePURE members produced 4.32 million tonnes of high-protein animal feed along with 4.64 million tonnes of ethanol,” the association said.
The impact of RED II
The EU recently revised its Renewable Energy Directive (RED II) and decided to cap first-generation biofuels at 7%.
Now, EU member states will have to set their plans to establish their progress margins and according to analysts, the development of delegated acts by the European Commission on low-risk indirect land use change (ILUC) factors will be important.
Luc Vernet, a senior advisor at Farm Europe, a think tank specialising in EU agricultural affairs, told EURACTIV.com that RED II creates segmentation within the first-generation biofuels.
“Between those more controversial biofuels with high ILUC risks – mainly based on palm oil and to a less extend soy feedstocks – and other biofuels with low or no ILUC risk. To know the final impact of RED II on EU production of animal feed, we need to see the details of the delegated act, which will define high and low ILUC risks,” the French expert said.
Vernet insisted that this delegated act should not be considered a small technical issue.
“It will have massive economic and political implications for the EU agricultural community, the sustainability of our protein supply and indeed the credibility of the EU transport decarbonisation strategy,” he added.
Vernet warned that a very “light” approach of low ILUC definition allowing most of the high ILUC risk biofuels to be green-washed into low ILUC would undermine the credibility of RED II.
“The Commission will need to set criteria for low ILUC easy to control and not prone to circumvention in order to guarantee a real enforcement on the ground of the political agreement reached this summer.”
“If we fail to have a serious delegated act, the collateral effect would be to put under pressure those biofuels that represent 54% of the total production of proteins in Europe and indirectly incentivise GM soy from America,” he added.
A similar view is shared by the EU farmer and cooperative association, Copa-Cogeca.
“If sustainable palm oil is considered as having a low ILUC risk, we run the risk that local seed oil production might not be the favoured option considered by member states to reach their biofuel diesel targets,” Copa told EURACTIV in an emailed response.
US soybeans imports
Copa said having an EU protein strategy that ensures broad and diversified access to feed ingredients is crucial to keeping the EU feed and livestock industry competitive.
“The US has become our leading trading partner for soybeans over the past year, taking over from Brazil, where the Chinese have begun to focus their attention on. Imports from US are replacing imports from Brazil; in this context this is more a market issue than a policy issue.”
In an effort to de-escalate trade tensions with the US, the Commission accepted last July bigger exports of soybeans to the EU.
For Vernet, for the moment this is a statement more than a proper deal and current political and market conditions should help this statement materialise into practice at least in the short term.
“This does not prevent the EU to have a strategy to encourage the production of proteins in Europe when it’s possible,” he said.
Copa noted that at this stage there is no final deal on soybean imports since no agreement has been found on the details and agricultural matters remain excluded from the EU-US executive group negotiations.
“Discussions on how to increase Soybean are parallel to the EU-US executive group. Presidents Juncker and Trump are expected to meet in Buenos Aires during the G20 summit and we hope to see further developments following their meeting,” Copa said.
“Copa-Cogeca has always believed that it would be beneficial if agriculture would be included in a comprehensive trade negotiation (such as TTIP), where all the key issues for agriculture could be discussed (e.g. GIs and non-tariff barriers) and not only tariffs.”
“This would help to reduce tensions and move forward on a multilateral agenda. At this stage we don’t see the conditions for such agreement,” Copa-Cogeca concluded.
EU sources close to the issue commented, “The EU self-sufficiency for soya proteins amounts only to 5% therefore we will continue to import these products into the EU. Given the size of our protein deficit, a full substitution of all soybean and soya meal imports by EU soy production is in practice not achievable.”
“It is also important to highlight that more than agronomic challenges in cultivating soybeans it would mean that we would need to dedicate about 25% of the total EU cereals area plus the current EU area for oilseeds and protein crops to cultivate the soybeans we import now. The required expansion of area would be at the expense of cereals – such as wheat where the EU has naturally a competitive advantage,” the sources said.