• Proposed new biofuel policy doesn’t cause job losses, report says

    Biodiesel industry claims that addressing indirect land-use change (ILUC) emissions from biofuels would cause massive job losses in rural areas are groundless, a recent study shows.


    The report, authored by consultancy Ecofys (1), concludes that it is possible to account for ILUC (2) emissions in EU biofuel legislation while maintaining employment in the industry and paying back investments in construction of existing biofuel facilities. A key mechanism to achieve this outcome is the so-called ‘grandfathering’, i.e. exempting existing biofuel production from the new emissions accounting rules.

    The report recommends capping biofuel production at current levels of 4.5% of transport energy until 2017, a timeframe sufficient for investments to be paid back.

    The EU regulates the use of biofuels through two laws with a 2020 time horizon. The renewable energy directive (RED) sets a 10% target for renewable energy, mostly biofuels, in transport. The fuel quality directive (FQD) sets a 6% emissions reduction target for transport fuels. Both laws contain rules for calculating the carbon emissions of biofuels. These do not yet include emissions from indirect land use change, but instruct the Commission to include them by 2010.

    In recent weeks it has become clear that the European Commission (EC) is in the verge of issuing its proposal on the matter, after a two years’ delay. An EC draft has emerged that would cap the quantity of biofuels made from food crops in the RED by 5%, along with accounting for ILUC emissions in the FQD, but not in the RED. The 5% cap on biofuels from food in the leaked proposal is remarkably similar to what the Ecofys report recommends, hence it is equally unlikely to cause job losses in the biofuel industry.

    Environmental NGOs gave the draft proposal a cautious welcome (3), saying that while it finally starts to address issues with today’s unsustainable biofuels, it still does not provide enough clarity about the future because it does not calculate ILUC emissions from non-food based biofuels, and it doesn’t include ILUC emissions in the RED.

    The biodiesel industry reacted to these draft proposals by claiming that 450,000 jobs were at stake with the leaked draft (4), without however providing evidence to support these claims. The Ecofys report now demonstrates these claims to be flawed.

    T&E’s programme manager for fuels, Nusa Urbancic, says: “This report shows that the Commission’s draft proposal maintains jobs in the biodiesel industry, instead of killing them as the industry says. Only an environmentally credible biofuel policy can create the long-term and secure jobs Europe needs. Hundreds of scientists have called for inclusion of ILUC emissions in biofuel policy as the way forward (5). Stalemate and wavering over what to do only prolongs the existing slump.”

    Nusa Urbancic concludes: “The proposal on the table is the bare minimum that EU citizens should expect. It’s also the bare minimum Commission officials should do if their objective is to reduce greenhouse gas emissions from transport fuels.”