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 in transport. The fuel quality directive (FQD) requires a 6% reduction in the carbon footprint from transport fuels. In practice, these two targets led to EU countries subsidising and mandating biofuels to meet them, provided they reduce emissions compared with fossil fuels. Both laws therefore have rules for calculating the direct carbon emissions from biofuels but these leave out ILUC emissions.
If ILUC emissions were included, most biodiesel available in the market today would qualify as high carbon fuels and would not count towards the targets in the RED and the FQD anymore. However, today’s proposal only requires reporting of ILUC emissions but does not include them, so it actually still allows high carbon biofuels to count for meeting these targets.
T&E’s programme manager for fuels, Nusa Urbancic, says: “Even though the science  has shown that including indirect emissions can make biofuels’ climate impact higher than fossil fuels, the Commission decided to miss the opportunity to steer the production towards more sustainable biofuels. To paraphrase Keynes’ famous quote, the Commission chose to be precisely wrong rather than roughly right.”
T&E welcomes the proposed 5% limit in the use of crop-based biofuels  that count towards the 10% renewable energy target in transport because it prevents a further expansion of today's unsustainable biofuels. However, the cap does not address the fundamental issue of counting ILUC emissions towards meeting the carbon reduction targets.
"While the EC proposal limits today's bad practices, it does not fundamentally steer future bioenergy in a sustainable direction, because it still does not account for ILUC emissions from biofuels. This creates risks and uncertainties for the environment as well as for investors", Urbancic concludes.
(2) ILUC is the process by which land previously used to grow crops for food is converted to grow crops for fuel. Food will have to be grown elsewhere, usually in new, unfarmed land, because demand for food will at least remain constant. This conversion of unfarmed land into new farmland results in an overall increase in GHG emissions, eroding the environmental benefits EU biofuel policy is meant to deliver. Watch a short video about biofuels at http://www.youtube.com/watch?feature=player_embedded&v=igUtLwruUjA.
(3) Letter from more than 200 scientists on ILUC: http://www.ucsusa.org/global_warming/solutions/forest_solutions/EU-ILUC-Letter.html.
(4) This includes biodiesel made from palm oil, soybeans, rapeseed and other oil crops and ethanol produced from corn, wheat, sugar and other starch crops.