Is the ILUC Soap Opera Nearing Its Finale?

By Rob Vierhout | October 11, 2013

It took almost three years for the European Commission to put a bill on the table of the European Parliament and European Union Council of Member States to regulate the indirect effects of land use change (ILUC) caused by the EU biofuel policy.

It took that long because there was deep disagreement within the European Commission on whether to use very much disputed science on ILUC as a basis for building on policy and rules. Time pressure forced the Commission to hammer out a “compromise” in which the two most involved Commission services agreed to disagree and wrote their favorite wishes in the bill. What the Commission sent to the legislators was a potpourri of different agendas. It was a mess and the whole discussion has continued to be messy since then, with the Commission very much internally divided on the issue. 

The main reason for releasing a bill was time constraint. In the EU, adopting a bill takes at least 12 months. With the Parliamentary elections of May 2014 on the horizon, it is already challenging to issue a bill in October 2013. 

Now, almost one year after the bill was released, the EP has spoken and the outcome was predictable, disagreement to the core. In fact the EP was just echoing the disagreement seen in the Commission. Furthermore, the third and most powerful EU institution, the Council of Ministers, is also in total disagreement. Since the day the Council started discussing the bill, the disagreement became obvious. 

The EP has proposed amendments to the bill, many of which are confusing, contradictory or overly detailed and complicated to implement. Of the many hundreds of amendments proposed, those adopted were almost all carried by a slim majority of the voting members (about 10 percent of the members did not participate in the vote). For the Parliament this is the worst possible outcome, starting negotiations with the two other institutions knowing that only a very few amendments were carried with absolute majority (that is, a majority of the total number of its members). If they wish to do this, effectively, the other two institutions can simply ignore the views of the Parliament.

Still, the negotiation process is rather opaque, known to be driven largely by the wheeling and dealing conducted by only a few people. But the Parliament also made a decision that very much undermines the possibility of a quick fix. The member of the Parliament in charge of the bill (the rapporteur) was denied a negotiation mandate for as long as it takes for the Member States to reach a common position on the bill. This means that the process is effectively delayed by several months. The Parliament’s rapporteur now needs to sit and wait until the Council is ready to receive her. As the EU Treaty does not put any deadline on the first reading stage of the bill it could take forever.

As a result, the Council may lose its appetite for bringing this file to a quick conclusion. The fact that the Member States are so divided on the issue doesn't help either. 

If there is no common stance by April next year the bill will go into the freezer. The new Parliament and the new Commission appointed by the end of 2014 can then decide to defrost the bill or to put it in a coffin. The latter would mean game over and business as usual, a likely scenario, according to many stakeholders. 

Most remarkably, nongovernmental organizations (NGOs) are among the loudest shouters, calling for a speedy agreement. Their main argument, to avoid uncertainty for industry. One of the leading environmental NGOs writes in its newsletter that “delays in the final agreement create further uncertainty for the industry.”

You must have nerves to say this. First NGOs have been campaigning aggressively against biofuels, resulting in a bill that is perceived by industry as a U-turn in policy. The immediate effect was a stop to all investments and uncertainty about what future would have in store.  And now the NGOs that caused the problem in the first place are saying that no new law will create further uncertainty. I would argue the opposite, no new legislation means maintaining the 10 percent target and certainty at least for the next six years.  

If the Council does not make substantial progress in the coming two months the file is as good as dead, meaning the end of the ILUC soap opera for several years.

Author: Robert Vierhout
Secretary-general, ePURE