Biofuels – can we make it as simple as cars?

Opinion by Jos Dings

So now it’s official – the EU’s biofuel policy is not only counterproductive for the environment, it is also a massive economic drag. A new study we put out on 17 April shows that, on a total turnover in the range of €16bn, the sector receives about €10bn in public support per year. It is split roughly 50/50 over the cost of biofuel tax breaks (paid for by everybody) and blending mandates (paid for by the driver). 

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Let me begin by saying that we have nothing against the use of public support or subsidies. Worthy causes deserve them. I hope it is also unnecessary to repeat that we have nothing against biofuels as such – we only have a problem with biofuels that cause more problems than they solve. And unfortunately, these are most of the biofuels that EU policy is putting in our tanks.

It should surprise nobody that if we keep throwing money at bad biofuels, the good ones will never have a chance. This is exactly what the whole indirect land-use change (ILUC) debate is about. If we want low-ILUC biofuels, we should start by giving high-ILUC ones their proper carbon footprint. In this context, it is all the more baffling that EU governments seem keen to throw even more money away. Pensions are being cut, teachers and nurses sacked, but governments want to keep supporting bad biofuels, and in many cases even ramp production up.

The contrast with the recent European Parliament vote on reducing CO2 emissions from cars is stark. In that case, MEPs voted by and large for common sense, a decent path of improvement, and long-term investment certainty, in the knowledge that the policy pays for itself through lower oil bills.

Why is it that political decisions are sometimes quite rational, as in the case of cars, and sometimes completely irrational, as with biofuels? A question for a real philosopher, not me. I suspect it has to do with complexity. Rules for more efficient cars are easy to understand, whereas rules for better biofuels and indirect land-use change are not. It doesn’t help that two different laws run the show: the renewable energy directive (RED) and the fuel quality directive (FQD). The more confusion, the easier an argument can be muddied by special interests.

We cannot make life cycle analysis of fuels much easier. But we can make the policy easier.

Let’s start by removing the 10% quantity target of the RED so we only have the climate (hence quality) target of the FQD left. Once we’ve done that, let’s stop all the confusing namedropping on favourite biofuels, whether they are first, second or third generation, and focus on what matters – their life-cycle performance. We don’t talk about first, second and third generation cars; we just talk about their climate performance. Let’s do the same with fuels. And that means, first of all, accounting for emissions from indirect land-use change, instead of just reporting on them. Lower emissions, lower costs.

And who knows, maybe we can even learn that proper climate policy can make the biofuel industry future-proof? With cars we have learned that lesson – there’s no reason why we couldn’t or shouldn’t do the same with biofuels.