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  • Assessing grandfathering options under an EU ILUC policy

    This report investigates how grandfathering provisions for exising biofuels production in the Renewable Energy Directive (RED) can be best implemented to minimise damage to the environment.  The consultants also considered the economic and political implications of the various options examined. 

    The report starts with an overview of the EU biofuels market, future investment plans for building new biofuel production installations and the cost and payback time for different biofuel facilities. It then analysed the impact of possible ILUC policy options on actors in the biofuel supply chain and the level of protection of biofuel sector investments and jobs that would potentially be required.

    Subsequently, the report analyses the grandfathering clause as included in the RED and FQD as well as possible extended grandfathering options that could become relevant to enable payback time for investors and prevent job losses.

    The study concludes that the EU can introduce a meaningful “ILUC policy” in both directives while maintaining employment and paying back the investments that went into the construction of existing biofuel facilities through adequate grandfathering. While farmers and EU ethanol producers will not need grandfathering under any of the assessed ILUC policy options, the EU biodiesel sector could face some challenges if ILUC-factors are introduced.