Biofuel makers protest against EU’s green investment taxonomy rules

“By making an unwarranted attack on crop-based biofuels with a reference to ‘food and feed crops’, the Commission is hamstringing its ability to meet Green Deal targets,” said Emmanuel Desplechin, Secretary-General of ePURE, the European renewable ethanol association. [Greg Montani / Pixabay]

Biofuels made from food-and-feed crops do not meet the EU’s green taxonomy criteria, according to a European Commission proposal, a move biofuel makers said will hamstring Europe’s ability to meet green transport goals.

The green taxonomy proposal, published on 21 April, is a signal to financial markets that investing in these first-generation biofuels goes against EU environmental aims.

While other forms of biomass, including advanced biofuels made from forestry residue and food waste, are given the green light, transport biofuels derived from crops fit for human and animal consumption – such as wheat and corn – are excluded from the taxonomy.

The decision is contained in the draft taxonomy Delegated Act, a measure that empowers the European Commission to update existing legislation with new technical or scientific knowledge.

The text is not yet in force, as it must still be approved – or rejected – by the EU Parliament and the Council of Ministers representing the 27 EU member states.

While not a legal obligation, the taxonomy “describes which economic activities are in line with the Paris Agreement,” and helps investors “to know whether their investments and activities are really green,” the European Commission said.

“Transport operations consume one third of all energy in the Union and account for more than one quarter of the total greenhouse gas emissions in the Union. Decarbonising the transport fleet and infrastructure can therefore play a central role in climate change mitigation,” states the draft taxonomy rules.

Maritime shipping and aviation are not included in the draft taxonomy as a study is underway to determine separate sustainable financing criteria for the sectors.

EU spells out criteria for green investment in new 'taxonomy' rules

The European Commission on Wednesday (21 April) unveiled a first batch of implementing rules under the EU’s sustainable finance taxonomy, spelling out detailed technical criteria that companies need to comply with in order to win a green investment label in Europe.

Industry criticism

The crop-based biofuel industry reacted strongly to the taxonomy designation, saying the decision Is based on faulty science.

“Once again, the EU is trying to redefine what should be considered as sustainable biofuels – even after the [updated renewable energy directive] process clearly distinguished good and bad biofuels and rendered the old ‘food vs fuel’ debate irrelevant,” said Emmanuel Desplechin, Secretary-General of ePURE, the European renewable ethanol association.

“By making an unwarranted attack on crop-based biofuels with a reference to ‘food and feed crops’, the Commission is hamstringing its ability to meet Green Deal targets,” he said in a statement.

Under the Green Deal, the EU aims for a 55% cut in emissions by 2030, rising to net zero by 2050.

Farm Europe, a Brussels-based think tank, said the exclusion “shatters the potential of sustainable biofuels to decarbonise transport” and claimed the decision has “no scientific or factual basis”.

James Cogan of Ethanol Europe argued the Commission’s decision is based on a false perception of the harm of biofuels rather than a reasoned analysis.

“The Commission has entrenched itself in an indefensible, irresponsible position and the people involved should be replaced,” he told EURACTIV by email.

“None of their vaguely implied arguments against crop biofuels stand up to scrutiny (except palm oil which is rightly being phased out),” he added.

Concerns over biofuels displacing agricultural land – a common charge from environmentalists – are overblown according to Cogan, as “food has never been so cheap and abundant as it is today”.

“Obesity and imbalance are the main issues, not undersupply,” he said, adding that Europe’s farm output is increasing despite a rise in abandoned farmland. “Crop biofuels don’t even register on the radar in the context of overall supply and demand.”

But not all industry reactions were negative. Xavier Noyon, Secretary General of the European Biodiesel Board (EBB), said the focus on the rejection of food-and-feed crops from the climate mitigation criteria of the taxonomy risks missing what is essentially positive news for the industry: essentially all biofuels are approved for green investment either as climate mitigation activities (as detailed under Annex I) or climate adaptation activities (as set out in Annex II).

“Personally, I would see the glass half full rather than half empty – even three quarters full,” he told EURACTIV.

“It’s not the first time that we [the biofuel industry] don’t get exactly what we want. We have to accept the political situation and the compromise. But to a very large extent, almost everything that we do is eligible… We have something that I think we can live with.”

While Noyon agrees it would have been in Europe’s best interest to include food-and-feed based biofuels in the taxonomy, he says the draft confirms that the biofuel industry has an important role to play in meeting Europe’s energy demand in a green way.

LEAK: EU taxonomy draft leaves bioenergy and forestry off the hook

The European Commission has decided to leave out agriculture but kept controversial criteria for bioenergy and forestry in the first batch of proposed implementing rules due to be presented on Wednesday (21 April) as part of the EU’s green finance taxonomy, EURACTIV has learned.

“A lot stricter”

However, Green NGO WWF argues the biofuels industry’s analysis is “completely wrong.”

“The basic point, which you can’t escape from, is that dedicated use of land for energy crops is counterproductive in climate terms. Doing nothing [to the land] would deliver a better climate outcome,” Alex Mason, senior policy officer at WWF’s European Policy Office, told EURACTIV.

While biofuels may save around a tonne of carbon per hectare compared to fossil fuels, leaving land to produce vegetation naturally will sequester around three tonnes per hectare, Mason argues.

“[The biofuels industry] is starting from the assumption that bioethanol from food and feed crops is lower carbon than fossil fuels, which simply isn’t the case,” he said.

While welcoming of the exclusion of food-and-feed based biofuels, Mason believes the taxonomy should be “a lot stricter”.

“It shouldn’t exclude just food-and-feed crops – it should exclude any dedicated crops, because they’re all going to be counterproductive in climate terms,” he said.

[Edited by Frédéric Simon]

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