RED2: what is next for palm oil?

The boom of palm oil in the EU biofuels mixture since 2012 took centre stage in the debate about the revised Renewable Energy Directive (RED2).

The EU biofuel industry has expressed concerns about this rising trend. It claims that palm oil crowds out of the market the biofuels produced from EU sourced feedstocks with no or very little level of indirect land-use change (iLUC). It also emphasises the role of palm oil in causing deforestation on high value carbon soils, in particular in Asia.

To improve the sustainability of the EU biofuels sector and match the commitment made at global level to protect high carbon value lands (UN Sustainable Development Goals), EU co-legislators asked the European Commission to create a distinction between first-generation biofuels via a delegated act.

Analysts argue that such a distinction will have a decisive capacity to improve the overall sustainability of the biofuels sector, applying for the first time a differentiation between those biofuels that generate a high iLUC risk from those that have no or low iLUC risks. This is expected to have a tangible impact.

High iLUC risk biofuels will be capped at 2019 levels and phased out from 2023, while other biofuels will be in a position to contribute to transport decarbonisation with an overall RED2 contribution limited to the current level or a maximum of 7%. The future system forsees three categories of biofuels: the high iLUC risk, the low iLUC risk, and the ones with no iLUC assessment because of limited risk.

EURACTIV organised a high-level workshop to discuss what is next for palm oil in the RED 2. Questions included:

– What is the impact of palm oil rise on the EU biofuel production?
– Will the new EC rules ensure that the low iLUC risk criteria give sufficient guarantees of conformity, are not prone to circumvention, and are not offering an “easy back door” for continued unsustainable biofuels production?
– What are the “risks” of the iLUC risk criteria definition?
– How can we ensure the monitoring of the iLUC criteria implementation in third countries?
– Are third countries, mainly in Asia, ready to abide by the new sustainability rules?

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