EU Parliament Committee Signs Off on Deal Capping Crop-Based Biofuels

16 April 2015

Members of the European Parliament’s Environment Committee have signed off on the terms of a compromise deal to cap the use of food-based biofuels in the transport sector, moving the process into the final stages of completion.

The legislation, which is the result of negotiations with the Council of Ministers, would require that EU member states limit the use of “first generation” biofuels – those derived from crops grown on farmland – in transport to seven percent by the year 2020.

This percentage cap has been one of the main points of contention in the long-running biofuels reform talks. The same parliamentary committee had previously backed a six percent cap this past February. EU energy ministers, for their part, had earlier set their sights last year on a seven percent cap. (See Bridges Weekly, 5 March 2015)

Both suggested numbers are still less stringent than the five percent limit that the European Commission suggested in its original 2012 proposal to review EU biofuels policy.

Tuesday’s parliamentary committee vote counted 51 members in favour, 12 against, and one abstention. Despite the margin of victory EU lawmakers noted that strong divisions still remain among member states, particularly on the approach to advanced biofuels.

“It was a very challenging file and we didn’t achieve all we wanted to achieve,” said EU parliamentarian Nils Torvalds, who is responsible for the biofuels dossier.

Emissions resulting from transport are estimated to account for nearly a quarter of the EU’s greenhouse gas emissions – second only to energy – and have proved one of the most difficult types of emissions to reduce. Under current EU law renewables must account for at least 10 percent of each member state’s energy consumption in transport by 2020.

National targets for advanced biofuels

Under the deal’s terms, the legislation must be enacted by EU member states by 2017. Within 18 months of the directive’s entry into force, EU member states must set national targets for so-called advanced biofuels, which are derived from alternative sources such as seaweed and some forms of waste and residues.

While the legislation sets an “indicative” 0.5 percent target for the share of energy produced from “advanced” sources as part of the overall percentage of energy derived from renewables in transport, EU members can set lower targets under certain conditions.

These include, for instance, climatic constraints or showing proof that national policies are in place that provide equivalent funding to energy efficiency and electric transport initiatives. The same parliamentary committee in February had backed a 1.25 percent goal.

The shift away from crop-based biofuels and toward alternative sources has largely been driven by concerns among some stakeholders, particularly conservation and poverty reduction advocates, that using crop-based biofuels can exacerbate climate change while increasing pressure on food prices.

Although some of those fears have abated after the drop in food and agricultural prices since their 2011 peak, questions persist over whether the expansion of farmland and resulting deforestation needed to produce these crop-based biofuels can actually increase greenhouse gas emissions. This process is known as indirect land use change (ILUC).

However, some experts say that policies such as trade-distorting subsidies and market access barriers that affect fossil-based transport fuels should first be revised as ways to slash emissions. (See Bridges Weekly, 5 March 2015)

Given the questions over the impact of ILUC, biofuel suppliers will be required to report estimated emissions resulting from freeing up land to grow food crops after the land has been repurposed for crop-based biofuel production. This data will be sent to the Commission and EU members, with the Commission tasked to both report and publish it.

The EU executive will then need to report back to both parliamentarians and the Council on the potential to work in ILUC emissions factors into current sustainability criteria.

Mixed welcome

Various EU-based conservation and poverty groups have already spoken in praise of the committee’s vote, highlighting both some of the specific provisions of the new measure itself, as well as approving the apparent shift in future policy direction.

“The European Parliament and governments have finally decided to tone down a harmful biofuels policy that has only contributed to deprive poor people of food and accelerate the climate change it claims to fight,” said Marc-Olivier Herman, a biofuels expert for Oxfam’s EU branch.

Some industry groups such as the European Renewable Ethanol Association (ePURE), have also welcomed the result for providing policy certainty in the biofuels sector given the prolonged nature of the talks, despite calling some of the deal’s terms “disappointing.”

“While the proposed compromise contains some positive aspects, including a proposed 7 percent cap on conventional biofuels, the recognition of low-ILUC biofuels, and opens the door to the promotion of sustainable biofuels beyond 2020, ePURE believes that the process to close this file has fundamentally lost sight of its overall objective: to promote the best-performing biofuels,” the group said in a press statement.

According to some industry representatives, the distinction between low-ILUC and high-ILUC biofuels could be important for some exporters, who fear the new legislation could discriminate against their products.

Meanwhile, Brazilian sugarcane association UNICA raised questions over the outcome, with head of international affairs Geraldine Kutas telling Bridges that the group “regrets that the hard work done by MEPs in reaching an agreement on the 6.5 percent sub-target was not met with member states’ approval.”

“Against scientific and factual evidence, member states were regrettably concerned about the implications of a widespread use of higher bioethanol blends,” Kutas added, saying that biofuels are still “the most viable solution” in decarbonising transport.

Next steps

The next major date on the calendar for the biofuels deal will be a vote by the entire Parliament on 29 April. The text will then need approval from the EU Council of Ministers.

ICTSD reporting; “Lawmakers agree to limit food-based biofuels,” EURACTIV, 14 April 2015; “EU imposes diet on food-for-fuel quotas,” REUTERS, 14 April 2015.

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