More than half of the palm oil imported into the EU is used to make biodiesel for cars and trucks. Palm oil used for biodiesel has increased sharply over the last years while food consumption of palm oil is declining.
Policies to promote food based biofuels do lead to increases in food prices, an extensive independent literature review has concluded. The analysis considered over one hundred economic modelling studies of the potential impact on prices of increased biofuel demand and over two dozen assessments of the role biofuels demand played in the 2006-08 food price crisis.
The Effort Sharing Regulation (ESR) defines the carbon budget for EU member states for the non-traded sectors (surface transport, buildings, agriculture, small industry and waste) until 2030. If the ESR’s headline goal of -30% compared to 2005 is undermined through loopholes, the ESR will not lead to real-world emission reductions in those sectors. This FAQ is aimed at bringing clarity to one element being discussed during the negotiations: the ESR Safety/Early Action Reserve.
The use of palm oil for biodiesel has been increasing in the EU - 3.35 Million tonnes of it was used in 2015. Currently 46% of palm oil imported to the EU is used for biodiesel, requiring around 1 million hectares of tropical land. The three largest producers of palm oil biodiesel are Italy, Spain and the Netherlands, accounting for 80% of production. Italy and Spain are also large users, while the Netherlands exports most of its palm biodiesel. The three countries consume 38% of what they produce, while the remaining 62% is used in the rest of the EU member states - thus making palm oil use a European issue.
European heads of state have agreed that in 2030, 27% of Europe’s energy should come from renewable sources. Not all renewables are sustainable though; for instance, food-based biofuels as well as burning whole trees imported from the US in EU power plants has come in for a lot of criticism.
In the context of the EU recast of the Renewable Energy Directive (REDII), the European co-legislators asked the Commission to develop a methodology to identify high ILUC risk biofuels with a significant expansion into high-carbon stock areas. These high ILUC risk biofuels would be frozen and then fully phased-out of the EU renewable targets by the year 2030. Some parties have raised questions regarding the compatibility of these measures with international trade rules.
The EU is entering in the final round of negotiations on the REDII. One of the outstanding issues to be agreed between EU Parliament, the Council and Commission is palm oil biodiesel. In January 2018 the Parliament voted in favor of phasing out support to biodiesel based on palm oil as of 2021, which is a step in the right direction. However, this decision is being contested by the Council and also by the palm oil-producing countries - especially Malaysia and Indonesia.
One of the key areas of debate in the REDII proposal is whether to introduce a national transport target in addition to one for advanced fuels. This briefing shows that the effect of a national transport target is to continue the support for food-based biofuels through the backdoor, going against their phase-out. This will also water down the greenhouse gas savings provided by the advanced fuels. Depending on the target levels and electricity multipliers, the contribution of food-based biofuels could grow, leading to further agricultural land expansion and direct and indirect land use change (ILUC).
The negotiations of the new Renewable Energy Directive for 2020-2030 have re-launched the debate on renewable energy in transport, notably on food-based biofuels. The impacts of the EU biofuels policy on climate and environment are poorly informed and understood. This briefing provides a reality check on 10 things that decision makers and citizens do not know about biofuels:1. Four in every five litres of biofuel in the EU is biodiesel2. Around half of EU production of crop biodiesel is based on imports of feedstock, not crops grown by EU farmers3. A third of EU crop biodiesel is made from palm oil, making drivers the top consumers of palm oil in Europe4. EU biodiesel production growth since 2009 has been based on imports and waste oils5. Of all EU rapeseed oil, 60% is consumed in the biodiesel sector6. Palm biodiesel is three times worse for the climate than fossil diesel7. Phasing out palm oil alone is not going to fix the biofuels policy8. The co-production of animal feed cannot justify the support for crop biofuels9. There is an acute lack of transparency about the biofuels used in the EU with data either unavailable or very hard to access10. Most drivers don’t know and are not told they are filling up their car tanks with vegetable oils and other food crops
Crop-based biofuels were seen as a way to reduce the EU’s dependence on fossil fuels and decarbonise the transport sector. But emerging evidence about negative environmental and climate impacts of these biofuels has led to the European Commission proposing to gradually phase-out the policy support in the EU. Industry stakeholders argue that this would adversely affect past investments and put jobs at risk.