What's the problem and how can we fix it?

The EU’s transport fuels policies have not driven the cleanest alternatives to decarbonise transport, mainly because of a failure to account for the emissions associated with clearing land to grow more biofuels.

Currently two EU laws, adopted in 2009 and running until 2020, promote the use of biofuels in the EU, ostensibly for the purpose of reducing greenhouse gas emissions from the transport sector. But both the Renewable Energy Directive (RED) and Fuel Quality Directive (FQD) could lead to higher, not lower greenhouse gas emissions as the issue of indirect land-use change (ILUC) has not been properly addressed.

In October 2012, the European Commission published a proposal to address the problem of ILUC. The final directive adopted in 2015 limits to 7% of transport energy the maximum contribution of biofuels made from food and energy crops. In addition, ILUC emissions have to be reported but they are not taken into account when evaluating the GHG performance of a biofuel, making it still possible for high-emitting biofuels to access the EU market and receive support.

After almost a decade and two policy reforms, the EU has adopted a recast of the Renewable Energy Directive (REDII) that sets the rules for the use of biofuels in Europe for the period 2020 to 2030. The FQD target won’t be relevant anymore as the decarbonisation of transport fuels is now all addressed in the REDII, but member states can decide to adopt a GHG target. 

Discussions around the RED II started in November 2016 when the European Commission proposed a recast and showed a willingness to move away from crop-based biofuels towards more advanced fuels for transport. After 20 months of negotiations, the EU co-legislators – the Commission, the European Council and the European Parliament – reached a deal in June 2018. The final outcome includes the following key elements:

  • Countries are no longer forced to use crop based biofuels. The target for renewables in transport – which has been the main driver for crop-biofuels in Europe – is now set at 14% but is optional. Member states can decrease it if they don’t use or don’t want to use a lot of crop biofuels.
  • The support to crop biofuels until 2030 is frozen at 2020 levels. The share of crop biofuels in each member state in 2020 will set the limit for the next decade (with 1% flexibility). 
  • The support to biofuels with a high risk of ILUC impact will be frozen at 2019 levels until 2023 and phased out completely in 2030.
  • There is a dedicated target and incentives for the use of advanced fuels such as renewable electricity in transport and advanced biofuels made from wastes and residues. 

Following the adoption of a delegated act in May 2019, palm oil diesel is now considered as ‘high ILUC risk’ and should not count towards EU renewable targets by 2030, although exemptions remain. 

Has the EU biofuels policy been fixed?

Environmental groups have been calling on EU policymakers to deliver a robust biofuels policy that would end the public support to crop-based biofuels and set the path to sustainable advanced fuels for transport. 

The REDII policy reform has been finalised in June 2018 with some improvements compared to the 2020 policy framework, but the policy hasn’t been fully fixed:

  1. Transport target: It is positive that member states are not obliged anymore by EU law to use crop biofuels if they don’t want to. However everything will depend on each country’s willingness to act. Therefore, this does not end incentives for crop biofuels completely across the EU. 
  2. 2020 freeze: The fact that member states have to cap their policy support for crop biofuels at 2020 levels sends the right signal to the market until 2030. However, the REDII should have completely phased out support to these biofuels.
  3. Phase-out of palm oil biofuels in 2030: It is a step in the right direction and an important signal globally, but the phase-out should have taken effect in 2021 due to the negative climate impacts. Moreover, some loopholes still remain. For example, some palm oil could still qualify and soy has not been tackled.
  4. Advanced fuels target: This target is a positive move for the EU; it is moving away from crop biofuels and shifting its support to more advanced forms of renewables in transport such as renewable electricity. Still, the EU must pay attention to ensure that the raw materials used for advanced biofuels are truly sustainable. The new policy framework still includes problematic feedstocks in the list of ‘advanced’ biofuels.

All in all, the new RED for 2020-2030 is a step in the right direction, but a lot will depend on member states’ implementation. We call on EU governments to ensure an ambitious and robust implementation in the years to come.

Palm oil biofuels are now considered as ‘high ILUC risk’

What is at stake?

Many conventional biofuels, in particular many types of biodiesel, have such high ILUC emissions that they would no longer pass the criteria to count as GHG savings. Some biofuels even lead to more GHG emissions than the fossil fuels they are supposed to replace. Based on estimates from the Globiom study, the ILUC emissions from vegetable oil biodiesel are higher than the emissions associated with fossil fuels. This makes biodiesel worse for the climate than fossil diesel, even when you exclude the production emissions. With the addition of the direct emissions from the production of biodiesel, the full GHG profile is even worse – about 80% worse on average.

What is ILUC?

The production of biofuels can indirectly cause additional deforestation and land conversion. When existing agricultural land is turned over to biofuel production, agriculture has to expand elsewhere to meet the existing (and ever-growing) demand for crops for food and animal feed. This expansion happens at the expense of forests, grasslands, peatlands, wetlands, and other carbon-rich ecosystems. This, in turn, results in substantial increases in greenhouse gas (GHG) emissions from the soil ploughing and removed vegetation (for example, where deforestation occurs).

Is there a scientific consensus that ILUC is a real problem?

ILUC is real. Numerous scientific and public bodies agree that ILUC should be accounted for when calculating the GHG emissions from biofuels. The Commission has ordered several studies of its own and consulted extensively with scientists who also agreed that ILUC is a problem. The study for the Commission’s trade department by the International Food Policy Research Institute (IFPRI) assessed the impact of various policy options for dealing with ILUC. It concluded that “emissions related to land use changes driven by biofuels policies are a serious concern”. The most recent study for the Commission’s Energy Directorate General – the so called Globiom study – reinforces this message. Its results show that biodiesel from vegetable oils, projected to be brought in by the RED, leads to around 80% higher emissions than the fossil diesel it replaces.

Are biofuels being unfairly targeted?

Biofuels were introduced as a measure to reduce GHG emissions – but scientific evidence shows that many do not achieve that purpose. The amount of biofuel used in Europe is mandated by law and the fuels themselves are often subsidised with public money. Many activities have a negative impact on the climate such as eating beef or flying. However, unlike for biofuels, the EU has not passed laws forcing everyone to get 10% of their calories from eating beef, or fly for at least 10% of their travel!

The production of biofuels can indirectly cause additional deforestation and land conversion.

Food-based biofuels: cure worse than the disease

Food-based biofuels: cure worse than the disease