Biofuels and Indirect Land Use Change (ILUC)

The European Union has been considering proposals to amend the Renewable Energy Directive (RED) and the Fuel Quality Directive (FQD), in order to encourage advanced biofuels that do not displace food crops or cause indirect land use change (ILUC). The European Parliament adopted the EU Council’s latest position in April 2015.

Biofuels remain the only practical and effective means to meet the targets set by the RED (10% energy from renewables in transport by 2020); and the FQD (6% reduction in the GHG intensity of transport fuels in 2020 from 2010 levels).

However, the real value of biofuels needs to be carefully assessed. They must be cost-effective, sustainable and acceptable to both consumers and vehicle manufacturers, and recognised as making genuine contribution to decarbonisation. As part of that, ILUC needs to be addressed to provide assurance on biofuels’ true GHG performance.

FuelsEurope believes that economically and environmentally sustainable biofuels have a role to play in the future of transport. We therefore support the development of cost-effective advanced biofuels – that is, those biofuels that do not compete with the production of food yet sustainable and beneficial in terms of lifecycle GHG emissions.

On 28 April 2015, Members of the European Parliament adopted an EU Council text that sets a new target regime to limit the amount of crop-generated biofuels used in the transport sector. The final text was a compromise, revised from an earlier Commission proposal:

  • The text sets a cap for first generation (1G) biofuels (from crops grown on agricultural land) of no more than 7% of transport’s energy consumption by 2020. However, Member States have the right to set more stringent limits by a reduction of that first generation biofuels cap.
  • EU Member States will have to set a national target for advanced biofuels, no later than 18 months after the EU directive comes into force. While a reference value was set at 0.5% in energy terms, Member States will be allowed to set a lower target on grounds such as limited potential for production; climatic constraints; and the existence of national policies that fund energy efficiency and electric transport to a commensurate level.
  • ILUC is only included in reporting.
  • The compromise text states no additional sub-mandates like the 6.5% energy target for renewable fuels in petrol or sub-targets on the energy efficiency are maintained.
  • Eventually, the compromise calls for a costeffective and technology neutral approach to be proposed by the Commission on the GHG reduction of transport after 2020.

Member States must enact the legislation by 2017.

FuelsEurope considers the compromise a good step forward, but concerns remain about the many incentives, overt and hidden, for electricity use in road transport and the ability of Member States to set different targets.

The European Council followed the Commission’s proposal to introduce a cap on conventional (“first generation”) biofuels rather than introducing ILUC factors into the regulations. This could indicate that the Council believes there is insufficient scientific grounds for directly regulating ILUC.

Following the adoption of the proposal in the European Parliament’s plenary, a formal adoption is still needed by the Council. The publication in the official journal is expected in Q3 2015.