Biofuel from palm oil, soybean and rapeseed produces more greenhouse-gas emissions than fossil fuel, once the environmental side-effects of its production are taken into account, an impact assessment prepared by the European Commission has found.
The assessment found that biofuel from oilseeds – the source of 80% of current biofuel consumption in the EU – will fail to meet existing EU requirements for greenhouse-gas savings in 2020 regardless of the methodology used to calculate the side-effects, known as indirect land-use change. Ethanol, produced from crops such as sugar cane and wheat, generates far higher greenhouse-gas savings.
The as-yet-unpublished impact assessment, prepared by officials from the departments for energy and for climate action and seen by European Voice, is supposed to guide the European Commission in deciding whether to seek changes to existing EU legislation. It has been the subject of unremitting negotiation between the two departments, with the energy department seeking to defend the merits of biofuel use. The assessment was considered by an inter-departmental panel in May but rejected on what are understood to be minor grounds.
There is now a renewed stand-off between the two departments. However, unless there is an extensive rewrite, the Commission will find it difficult to ignore the implications of an assessment that existing legislation on biofuel permits the use of fuel that is more damaging to the environment than fossil fuel.
The Commission’s declared intention was to present its impact assessment “no later than July 2011”. A spokesman for Connie Hedegaard, the European commissioner for climate action, was sticking to this line. He said: “This will, if appropriate, be accompanied by a legislative proposal for amending the renewable energy and fuel quality directives.”
Amendments to directives
But the energy department is looking to change the parameters and assumptions of the impact assessment to blunt its possible impact on Europe’s biofuel producers, making it highly unlikely that the Commission will be able to propose changes to legislation before the summer.
Under targets currently set out in the two directives, biofuel is required to meet a 35% threshold of greenhouse-gas savings over fossil fuel, rising to 50% from 2017. But the current rules do not take into account the impact of indirect land-use change, when the cultivation of biofuel crops on existing agricultural land leads to the use of additional land for production of other agricultural commodities. This displacement of agricultural activity, for instance into what might currently be woodland, has considerable implications for carbon emissions.
Conflict with trade rules
If the existing two directives are not changed, the study predicts that, taking into account the indirect land-use change, the biofuel used in 2020 would on average save only 15% in greenhouse-gas emissions compared to fossil fuel – far short of the existing 35% threshold. The study posits an alternative scenario in which emissions from the estimated indirect land-use change are taken into account and the use of certain types of biofuel – above all, oilseeds – is prohibited. That, it is estimated, could produce savings of 70%. This would require a change to the EU laws and would involve a significant industrial adjustment in the Union. Excluding oilseeds as a source of biofuel based on this model would, moreover, invite a legal challenge of the model’s compatibility with existing world trade rules.
The impact assessment in its draft form suggests that a mixture of approaches is most likely to produce the desired effects. This would include raising the thresholds of greenhouse-gas savings from biofuel, in effect excluding certain biofuel sources such as palm oil and soybean; additional sustainability requirements for some types of biofuel; and the factoring-in of emissions from indirect land-use change in the total emissions associated with other types of biofuel.
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