Possible Tightening of EU Regulations on Biofuel in 2011: Would This Reduce the Indirect Effects on Land Use or Stifle a Growing Industry?

With recent claims that EU regulations don’t do enough to prevent indirect displacement of food production, protect natural environments and promote sustainability, tighter regulations may be imposed on the production of Biofuel in the EU in 2011.

EU Climate Comissioner, Connie Hedegaard:

“We have to ensure that the biofuels we promote deliver clear greenhouse-gas savings. We must not ignore any unwanted impacts that may be caused globally as a result of the additional demand.”

Indirect land use changes are a major concern for Biofuel; displaced food production, expansion of agriculture and destruction of natural environments which sequester CO2 are some of the greatest challenges facing the Biofuel industry. Biofuels such as Biodiesel and Bioethanol produced with existing technologies usually require biomass produced by agriculture, as they grow the need for fuel crops will only increase. Current EU requirements for 10 percent renewable energy for road and rail transport by 2020 may increase the risks of these problems arising. Indeed, some of this is becoming apparent now. Various studies reached unfavorable conclusions regarding how “green” existing ways to produce biofuels are. There have also been several incidents recently showing that some technologies used for Biofuel production are not sustainable, pose a risk to food security and have detrimental effects upon environmental conservation. 

These indirect effects are land use changes; for example earlier this year when palm oil supplier Duta Palma was found by the BBC to be clearing protected forest to make room for new palm plantations, for which they were dropped by Unilever. If producing fuel crops is more profitable than producing food crops, it makes sense for farmers to switch the crops they grow (or to sell their food crops to energy companies if they will offer a better price than food suppliers).   

On the other side of the equation, many of the Biofuel technologies currently operating commercially are still under development. While some are not sustainable or have an effect on food security, the technology used to take them from field to fuel tank is a stepping stone to a cleaner, greener way of producing fuel. First generation biofuels from food crops paved the way for the second generation; the technologies used to convert sugars to ethanol for example were built upon so that non-food crops and crop residues could be used to produce fuel. Biodiesel production from conventional food or energy crops developed technologies essential to producing Biodiesel from algae. The innovations are not only made in technology but also in building the supply chain around it and growing the companies that run the operation. 

In an interview with reporters from Bloomberg, the European Commission (the regulatory arm of the EU) said that it is possible that the minimum emissions-saving threshold contribution for biofuel toward EU renewable- energy targets may be raised, the greenhouse gas emissions associated with indirect land use taken into consideration, and it is also possible that the sustainability criteria may be expanded in mid 2011. Any changes to the existing regulations would first be subject to detailed review and assessment of indirect land use by the European Commission beforehand.

Over regulation while technologies are still in this “stepping stone” stage could stifle the development of essential biofuel technologies. And yet, without pressure to continue development, some companies will stick with commercially effective, but ecologically damaging “stepping stone” technologies rather than continuing to improve their product. Steps were taken to try and mitigate some of these risks in 2008 when the 10 percent target was first approved by including environmental protection standards and emission reduction targets. However, these targets may not do enough to prevent the indirect effects of Biofuel production as at present they only address the direct effects of biofuel.

It has been said that the current regulation does not go far enough in terms of protecting the environment, but any future revision of legislation should ensure that it does not impair the development of new clean, sustainable biofuel technology. Destruction of natural habitats and CO2 sinks such as tropical rainforests should be avoided, not only because of the loss of biodiversity but also because these environments are difficult to replace once cleared. Movements should be made to discourage practices that could cause competition between food and fuel. However, while sustainability is ultimately one of the greatest goals for biofuel, many technologies will improve in this regard over time as they are developed. The biofuel industry is a young industry and harsh restrictions on sustainability may force new suppliers to make their business model “run before it can walk”. Incentives to continue improvement of technologies would be valuable to ensure that in the future biofuels are not only sustainable, but have minimal indirect negative impact on environments or food security.