EU misses golden chance to right the wrongs of disastrous biofuels policy

July 15, 2021

The EU’s ‘green’ fuels law has been an unmitigated disaster. Instead of pushing sustainable alternatives, it led to widespread deforestation, habitat loss and biodiesel emissions greater than the fossil diesel it replaced. Almost all the growth in “green” fuels was met by imports, mostly through palm oil. In anyone’s eyes that is a complete failure. Not the European Commission’s it seems. After 10 years of this crazy fuels policy, we had hopes that the Commission would finally put an end to the biofuels monopoly in the Renewable Energy Directive (RED). This is not what happened.

In particular, the Commission missed the chance to immediately put an end to palm-based biofuels, despite seven EU countries, including France, Germany and the Netherlands already adopting earlier phase-out dates. But there is still the opportunity for the EU Parliament and Council to end the support to palm and soy based biofuels now, and end the use of other crop biofuels by 2030.

There was some good news, though. The Commission now allows fuel suppliers to count renewable electricity to meet their targets, either by buying electricity credits or by expanding their own networks of charging stations. The system could help the roll-out of charging stations without relying on taxpayers money, as demonstrated in the Netherlands.

But the Commission removed the extra weighting electricity was given towards meeting the targets, which reflected its higher efficiency compared to biofuels. How renewable electricity will be rewarded remains unclear. This lack of clarity reduces the effectiveness of the system and risks making biofuels significantly more attractive versus electricity.

Rather than requiring countries to have a certain share of renewable energy in their transport fuels, it now requires a certain level of reduction in the carbon footprint of the fuels. In theory, this could be a way of rewarding the fuels with the highest CO2 savings; a change from a quantitative approach to a more qualitative one. In practice, however, this may not improve the sustainability of EU fuels at all. This is because the EU rules do not account for indirect emissions, including biofuels’ land use emissions, which can lead to deforestation.

When it comes to ‘advanced’ biofuels from waste and residues, the Commission only increased the target for these fuels but didn’t strengthen the sustainability safeguards, in particular for forest biomass. The higher target could force oil companies to scour the planet for scarce resources creating havoc in supply chains and leading to potential fraud. Unless the Commission has knowledge of a secret store of untapped palm residues, crude tall oil or bio-waste that are desperately waiting to become road fuel.

And for the first time, the Commission introduced a target for the supply of renewable electrofuels (hydrogen and e-fuels) in transport. But this high target goes beyond the likely demand from aviation and shipping in 2030 and risks promoting hydrogen and e-fuels for road transport where they are far less efficient than electricity. Without a clear framework on how ‘green’ hydrogen and e-fuels will be defined, there is a heightened risk that they could be developed using fossil fuels.

Fit for 55 and the RED missed the chance to right the wrongs of a disastrous biofuels policy. Luckily, member states are waking up to the dangers of biofuels with many withdrawing support for palm oil and soy. But at the EU level there’s much work to be done.

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