Are We Being Stabbed in the Back?

By Robert Vierhout | October 05, 2012

After having promoted the use of biofuels for a number of years, some forces within the European Commission no longer seem convinced that biofuels from food/feed crops are a good thing and are now calling for limiting and eventually avoiding the use of biofuels. The political challenges, as expressed in 2007 by the member states, seem to have evaporated. Biofuels were seen then as crucial instruments in combatting climate change, increasing security and diversity of energy sources, a new outlet for farmers and, finally, new technological opportunities.

The first law from 2003 and the second from 2009 have spurred more than €8 billion (more than $10 billion) in investments in the EU for ethanol production only. On top of that, very strict rules were put in place to avoid the use of carbon-rich land and high sustainability standards were written. Finally, biofuels have to eventually achieve emissions that are at least 50 percent of fossil fuel emissions.

The combined effect of the measures now under discussion will be lethal for the EU biofuel industry. They include capping the market for food/feed, grain-based biofuels to 5 percent, achieving higher greenhouse gas (GHG) savings and an additional indirect land use change (ILUC) penalty. It is like being shot, not once, but three times. The authors of the text must have had thought: let’s make it so tough for biofuels that we get rid of these damn fuels once and for all. I cannot think of any other reason why on earth such extreme measures have been proposed.

If indeed grain-based biofuels are causing ILUC, even though the underlying science is shaky at best, why wouldn’t an ILUC factor suffice, as has happened in the U.S.? Why on top of that measure is there a need for a 5 percent cap? If you produce sustainably, there shouldn’t be any worry.

The 5 percent cap is a bit higher than the current 4.8 percent share for biofuels. The general understanding is that this volume of biofuels is not causing ILUC. When asked, the lead researcher at the International Food Policy Research Institute was unable to say how much ILUC is caused to date. So may we assume there is none?

The two measures together, capping and ILUC factor, do not make sense. The 5 percent cap proposal has been triggered by the concerns over higher prices for crops. The ILUC theory says biofuels cause the use of more land and thus addressing ILUC addresses the growing demand for food crops. If the theory is correct, how then can biofuels also cause a food shortage?

By the way, it is also quite a challenge to cause ILUC in Europe. According to Food and Agriculture Organization data, Europe is taking 500,000 hectares (1.23 million acres) of arable land out of production each year. The European Commission itself predicts the EU will use 5.5 million arable hectares less by 2020 than in 2010. If we assume that the average yield is 6 metric tons of grains per hectare and that direct land use change were avoided, 33 million metric tons of additional grains could be produced without any land/food impact (today EU producers use 9 million metric tons of grains). At least one-third of the grain volume would replace soy meal imports for animal feed. That, too, saves land indirectly.

Based on these simple facts alone, it is incomprehensible what has driven the EC to propose this U-turn, which will result in lost jobs and investments in times of deep financial crisis. Is it possible that Big Food and some nongovernmental organizations hold sway over the commission? Food/fuel and ILUC have become so political and emotional that it is apparently no longer possible to distinguish fact from fiction.

Who in his right mind would want to invest in any regulated sector not knowing what the regulators’ promise is worth? Regulators need to provide stability, not uncertainty. For the biofuels industry, having invested and worked in good faith and providing society with a certified highly sustainable product, these proposals feel like being stabbed in the back.

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