Since 2009, the Renewable Energy Directive (RED) has driven the European Union's policies on biofuels. The RED's current mandate states that 10% of the EU’s transportation fuel must come from renewable sources by 2020; it also mandates that only 5.6% of this can come from first-generation biofuels (i.e., biofuels produced from food crops such as maize). On October 17, however, the EC released a new proposal that would significantly change these mandates and impact the production and use of first-generation biofuels throughout the EU.
The proposal stems from a series of studies commissioned by the EC in 2009 and draws largely on IFPRI research. Using some of the latest developments in biofuel modeling techniques, this research suggests biofuel production could have some unintended negative consequences, such as the effects of indirect land use changes or ILUC. When forests and other pristine lands are cleared for new farmland to expand biofuel production, the carbon stored in their soil and accumulated biomass is released, resulting in a net increase in greenhouse gas (GHG) emissions. These ILUC effects could lower biofuels' environmental benefits.
The first of two IFPRI reports, Global Trade and Environmental Impact Study of the EU Biofuels Mandate, was released in early 2010. Using IFPRI’s MIRAGE model, this initial report found that the EU’s original first-generation biofuel mandate of 5.6% was at the upper limit of what is environmentally sustainable - simulations showed that anything above 5.6% could rapidly increase GHG emissions and reduce the environmental benefits to be had from the use of biofuel. At the request of the EC, a follow-up report, Assessing the Land Use Change Consequences of European Biofuel Policies , was released in 2011. This second report further supported findings that the current EU biofuel mandate is likely to produce significant ILUC emissions. The report's author, Senior IFPRI Research Fellow David Laborde , emphasizes that for these impacts to be minimized, the overall scope of the mandate should be limited or the GHG savings threshold for all biofuel crops should be increased. Although biofuel producers in the EU have criticized the EC's use of these reports, Laborde defends the robustness of the model and highlights the need for further collaboration and development. “Data are always imperfect,” Laborde says. “But they can be improved, thanks to constructive dialogue and data sharing.”
The new EC proposal would lower the EU’s first-generation biofuel mandate to 5%, as well as institute several other significant policy changes:
- Raise the minimum greenhouse gas (GHG) savings threshold to 60% for all new biofuel production. This increased minimum is intended to improve the efficiency of biofuel production processes and discourage future investments in production facilities that have low GHG-reduction performance.
- Include indirect land use changes (ILUC) in the reporting of GHG savings by fuel suppliers and EU member states.
- Establish incentives for biofuels that produce little or no ILUC emissions. Feedstocks that do not create additional demand for land, including algae, straw and waste, will be targeted for incentives.