Meeting EU biofuel targets: the devil is in the detail

25 March 2019
The Autonomous University of Barcelona team

Transport is one of the most unsustainable sectors in the EU: it lags behind all other sectors in terms of emission reduction, and alternatives have been tricky to find, monitor and implement. In 2016, just 3.8% of the energy consumed in the transport sector came from renewable energy sources (EUROSTAT, 2019). Electric vehicles are gaining momentum as a possible solution to sustainable transport, but so far they can only substitute road passenger vehicle, leaving a big gap for other forms of transport, such as shipping and aviation. Similar to electric vehicles, biofuels are seen as a solution to simultaneously lower emissions and lower dependence on imported oil. Following concerns over indirect land use change (ILUC), the recast renewable directive set strict criteria on the sustainability of biofuels, however they are still considered to be a central element to the sustainable transport transition. Differently from renewable electricity which is generated with local resources on the spot, and from fossil fuels that are extracted with associated environmental damage, biofuels represent a peculiar case of renewable energy, since, similar to fossil fuels, they rely on a multi-step process: first the cultivation of crops, and then their conversion to fuels, with intermediate steps depending on the type of fuel. This makes their accounting more complicated. With the EU setting rigorous sustainability targets for biofuel implementation, how can this sustainability be monitored when more than half of the feedstock used to produce biofuels in the EU is imported? (Buffet, 2017)

The fact that biofuels require multiple steps, and that steps can occur within different sectors and economic domain (first in agriculture and then in the energy sector) adds more layers to the openness of the system, and with each layer come difficulties in monitoring and accounting. Take the case of the Netherlands: between 2010 and 2015, the country quadrupled its consumption of residues of Used Cooking Oil (UCO) as a raw material to produce biodiesel. As it does not have an adequate local supply, it imported 81% of UCO, of which roughly 51% came from countries outside the EU (CE Delft, 2017). Following high impact media campaigns, it has become generally well known that palm oil production leads to biodiversity loss in Indonesia and Malaysia, a fact which led the EU to implement a strategy to reduce palm oil imports from Asian countries. However, the imports of UCO derived from palm oil are not limited, and if left unchecked a rise in UCO demand may lead to a rise in palm oil production. Another issue linked to the openness of the biofuel production chain is related to the double accounting mechanism, a political guideline included in the first EU renewable energy directive.

Following this guideline, the energy participation of certain residues of animal and vegetable origin are counted twice with respect to reaching the proposed objectives. What is problematic here is that not all countries have applied the guideline, and the difference in applicability has increased dynamics in waste trade. For example, Germany, which does not apply the double accounting mechanism, exports its animal fat waste to The Netherlands (where, in contrast, the double accounting principle is applied) (CE Delft, 2015). In addition, double accounting can lead to a "virtual" share of biofuels in the transport sector, which implies that this virtual percentage will be covered in the real world by another type of fuel, perhaps fossil fuels.

Biofuels are being pushed in the EU as a solution for increased sustainability and security of supply. They also generate a massive business: in economic terms, Charles et al., (2013) estimated that for 2011 the EU allocated between 9.3-10.7 billion euros to subsidize the use of conventional biofuels - a significant figure considering that the size of the biofuel market in the EU for that year was around 13-16 billion euros. Each EU country has varied agricultural production capabilities, and setting uniform targets across all member states may push governments to import feedstock to locally produce biofuels, or to see this as a business opportunity to import and export biofuels, like The Netherlands is doing. If the EU is serious about the sustainability of it transport fuels, it should account for all steps of the biofuel production process, and regulate the trade of primary and secondary products to avoid turning biofuels into a business opportunity with little positive impact on the environment.

References

Buffet, L., 2017. Realitycheck-10 things you didn’t know about EU biofuels policy.

CE Delft, 2017. Sustainable biomass and bioenergy in the Netherlands Report 2016. Delft.

CE Delft, 2015. Biofuels on the Dutch market Update: data for 2013. Delft, The Netherlands.

Charles, C., Gerasimchuk, I., Bridle, R., Moerenhout, T., Asmelash, E., Laan, T., 2013. Biofuels: At What Cost? A review of costs and benefits of EU biofuel policies. Int. Inst. Sustain. Dev.

EUROSTAT, 2019. Data base - EUROSTAT [WWW Document]. URL http://ec.europa.eu/eurostat/web/main/home (accessed 2.4.19).

Giuntoli, J., 2018. Advanced Biofuel Policies in select EU Member States: 2018 Updated.

Photo credit: United Soybean Board