Auditors’ report on biofuels calls for return to common sense

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

In 2012, the Commission made an unexplained U-turn in its biofuel policy. [The Open University/Flickr]

Will the report of the EU Court of Auditors (ECA) regarding the EU system for the certification of sustainable biofuels spark an outbreak of common sense within the Commission, asks Dick Roche.

Dick Roche is a former Irish minister for environment, and is currently an advisor to Hungary’s Pannonia ethanol company.

In late July the European Court of Auditors (ECA) issued Special Report No 180/2016. The report makes interesting reading. It is an indictment of the way the 2009 Renewable Energy Directive (RED) has been implemented.

The RED is the cornerstone of the EU’s biofuels policy. It sets out a list of ambitious sustainability criteria for biofuels. In particular, it stipulates that only biofuels certified as sustainable may be counted towards the EU target that at least 10% of the final consumption of energy in transport should be from renewable sources.

A transparent and effective certification process is a key requirement to guarantee this. The Court of Auditors has found that what has been delivered falls short on every metric.

Instead of properly policing or expanding the criteria set out in the RED, the Commission has certified dozens of “voluntary sustainability schemes” and then turned a ‘blind eye’ to their operation.

While some schemes (notably schemes used by EU biofuel companies) are well run and meaningful, the overwhelming majority are loophole-filled vehicles for fraud.

The ECA raises serious questions about the transparency of the schemes, the level of supervision that has been applied and points to failings when it comes to measuring social and economic impacts.

The auditors flag serious gaps in the certification processes that encourage or facilitate fraud. It records concerns about ‘fake waste’ and the risk of fraud where virgin vegetable oil is passed off as used cooking oil (UCO) making it eligible for the RED’s major incentive of double counting

For anybody who has been following the twists and turns of the EU biofuels debate, one of the more eye-catching aspects of the ECA report is the degree to which it puts the spotlight on the effort being made by Commission officials to sideline the concept of indirect land use change (ILUC).

Concerns about ILUC were ostensibly behind the amendments to the RED that the Commission introduced in 2012, a point acknowledged by the ECA which notes, “the importance of assessing the impact of ILUC was highlighted in a mid-term evaluation of the RED”.

Given the importance attached to ILUC by the Commission when it produced the 2012 amendments to the RED, logic would suggest that ILUC be front and centre in any Commission approved certification system and in the wider biofuels discussion.

The ECA shows that this is not the case and, noting that EU certification schemes do not take ILUC into account, reaches the conclusion that “the relevance of the EU sustainability certification system is undermined without this information”.

The ECA in effect calls the Commission’s bluff on ILUC. The report shows that while ILUC was important enough for Commission bureaucrats to champion the 2012 changes in the RED that scared off investors in EU biofuel production and denied EU farmers and rural communities the ‘quiet revolution’ enjoyed by rural America when the US ethanol mandate was introduced, it has slipped the minds of the same bureaucrats when they were sanctioning flawed certification processes.

The fact is that the Commission now wants to abandon ILUC. In its 20 July Transport Decarbonisation Communication, it seeks to write ILUC out of the dialogue about biofuels, in no small part because the evolution of ILUC science now shows that the Commission was entirely wrong in the claims it made about EU produced biofuels in 2012.

ILUC has become the inconvenient truth that the Commission officials now wish to bury.

This together with the other evidence of shortfalls on the biofuels dossier raises serious questions as to whether those who have designed and administered the policy are up to the job.  The Commission’s recalcitrant response to what is a serious report from the ECA does little to dispel those doubts.

The auditors report now passes to the Parliament’s Budgetary Control Committee for consideration giving MEPs the opportunity to insist that the Commission ups its game across the whole biofuel dossier and adopts a more differentiated and scientifically sound approach to all biofuels and to the feedstock used in their production.

The European ethanol producers organisation, ePure, has put forward a series of common sense proposals which, hopefully, will be taken on board by the Committee.

If implemented, these proposals will close off the gaps the Commission has ignored, limit opportunities for fraud, close out ‘bad biofuels’ from the European market and address the valid concerns that have been expressed about Europe’s growing addiction to palm oil.

The proposition that full sustainability criteria and robust traceability measures apply to all biofuels and indeed to all transport fuels is essential.

Introducing the robust and fraud proof certification that EU ethanol producers are calling for makes common sense.

That Globiom study, which the EU Commission paid for with EU taxpayers’ money represents the best available science on biofuels. It shows that biofuels such as ethanol, which can deliver 90% GHG savings, can be produced with low ILUC and in a completely sustainable way in Europe.

Commission officials, piqued because Globiom has exposed their past mistakes, should not be allowed to bury the study.

The ePure suggestion that the Commission reverse its ambivalence on ILUC and require that all biofuels with low ILUC risks should be allowed to contribute to meeting Europe’s 2030 climate targets is in line with the Globiom Study and entirely logical.

The proposal that biofuels with high land use impacts, such as palm oil and ‘fake waste’ cooking oil (eg animal feed imported by clever international traders into Europe and declared as waste) should be prohibited, would have wide scale support particularly in the EU Parliament where members from across the political spectrum have been signaling a growing disquiet about palm oil.

What is needed now is an outbreak of common sense within the Commission. Can we expect that to happen?  Hope springs eternal.

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