Changing the Tide

By June, the European ethanol industry must find a way to convince the parliament, the European Commission, and other stakeholders that supporting first- and second-generation ethanol is a worthwhile investment. It will require a solid strategy.
By Robert Vierhout | January 21, 2014

Those who have followed the decision making process on the indirect land use change (ILUC) conundrum very closely will probably agree with me that it is difficult to predict the way European decision making will go.

The week prior to the Dec. 12 meeting of the EU ministers of energy, the Lithuanian EU Council president achieved support for a compromise text against all odds in the permanent committee of EU ambassadors (COREPER). The general perception was that the debate among the energy ministers would be a formality confirming the COREPER text.

As I followed the live debate, I suspected an unexpected outcome could occur when Hungary expressed its opposition to the compromise. Upfront, four countries had made clear that they would vote against—Belgium, Denmark, the Netherlands and Luxembourg—all for the same reason, that the compromise was not ambitious enough in addressing ILUC. Italy expressed opposition as well, with a similar view. 

Hungary did not like the compromise text because it felt the proposed change to the Renewable Energy Directive would hamper the country in developing its agricultural sector. Several other Central and Eastern European countries shared this view, although without expressing opposition to the compromise text. Not Poland though. As the last nation to speak at the council meeting, it supported Hungary and said no. 

The Lithuanian president was taken by surprise. He thought there was a majority in favor of his compromise but there wasn't. The seven countries saying no represented enough votes to block the measure. The stance taken in the council was just mirroring what already had happened in the commission and the European Parliament. There is substantial disagreement on the best way forward regarding the ILUC issue. The result: standstill. The dramatic change to the bill in the summer of 2012, when out of the blue a cap to food/feed biofuels was introduced along with ILUC factors, backfired. The European Commission could have foreseen this if it had done its homework well. It would have realized how much disagreement there was with its proposal, if it had tested the water by consulting member states and the sector before launching the proposal. 

Why did the commission push on? Was it lack of clear leadership of the president of the European Commission to say no to a proposal that was controversial even within the commission itself? I think it was. The proposal should never have seen daylight.

What next? 

It is unlikely that the Greek presidency will be able to mend this since it will be very short-lived, due to European elections. Why put effort in a file that cannot be concluded during one’s term as president? Thus the file will be carried over to the Italians in the second half of 2014.  But whether they can find the key to resolve the issue will depend on how the newly elected parliament and commission will assess biofuels.

Looking at the recent ILUC battlefield I see mainly casualties and no real winners. The European ethanol industry has only a few months time to regroup and rethink its strategy as the discussion on biofuels will continue, whether we like it or not. 

Even though it has been a tough battle up to now, the ethanol sector has the potential to change the tide. We have been successful in convincing the European Parliament that a separate target of renewable energy in gasoline is needed. It was one of the few amendments that gained enough support to survive the negotiation with the council. We also were able to convince the parliament that a mandatory target for advanced biofuels is a must.

We have until this coming June to present the new parliament, the commission, other stakeholders and the media our story that supporting first- and second-generation ethanol is a worthwhile investment. 

Author: Robert Vierhout
Secretary-general, ePURE
Vierhout@epure.org