EU Must Keep Benefits of Sustainable Biofuels in Sight

The European ethanol industry faces policy uncertainty with the expiration of the current biofuels policy in 2020, writes Robert Wright, the new secretary general of ePURE.
By Robert Wright | December 08, 2014

These are still uncertain times for the European ethanol industry. Discussions in the EU are well underway to revise the current EU biofuels policy, which expires in 2020, and the EU has not indicated what type of biofuel rules, if any, will exist after 2020.  This policy uncertainty is the biggest challenge facing European ethanol producers.

The current framework, introduced in 2009, heavily influences and governs the ethanol market in Europe. In 2012, just three years after EU policy support was confirmed for biofuels, however, the European Commission introduced a major U-turn by proposing to cap the use of conventional biofuels at current consumption levels.

The Commission justifies the proposed cap as necessary to address indirect land use change (ILUC), incentivize biofuels with better greenhouse gas (GHG) performance and limit biofuels’ role in food prices. How an arbitrary cap will solve any of these issues is still open to question.
As an industry, we agree with the need for effective regulations to ensure that biofuels used in Europe meet the highest possible sustainability standards. In Europe, however, these biofuels are already heavily regulated and must meet mandatory and stringent sustainability criteria.

We are proud that the ethanol we produce in Europe is the most sustainable in the world. But Europe must be careful not to “throw the baby out with the bath water” by punishing all conventional biofuels equally.

The proposed cap is an ineffective policy tool because it does not differentiate between biofuels on the basis of GHG emission performance: the very purpose of the ILUC exercise.

A clear measure to incentivize biofuels with good environmental performance would be to establish a separate target for renewable ethanol in petrol. Such a target would help promote ethanol, and its proven benefits of high GHG savings and low, or no ILUC.

The current policy discussions are important, but everybody agrees they have lasted too long. In Europe, biofuel investments have either dried up or European companies are investing elsewhere where the policy framework is more stable. It is now time to close the debate, move forward and provide the clarity and certainty that present and future investors need.

This diverse, versatile and young industry has a valuable role to play in decarbonizing transport, but the EU must put in place a clear, dedicated policy framework that includes long-term ambitions and policy stability. Such a framework will provide companies with a clear reason to invest, incentivize investments and go a long way to both realizing the potential of advanced biofuels and contributing to Europe’s bioeconomy.

In January, the European Parliament commences its second reading of the ILUC proposal. This is a crucial opportunity for legislators to regain investor confidence in the sector by producing a stable, long-term policy that will realize the benefits of ethanol, both conventional and advanced.

Author: Robert Wright
Secretary General,
ePURE, the European Renewable Ethanol Association