EU launches indirect land use discussion

By Susanne Retka Schill | September 18, 2009
Responses to a European preconsultation on the indirect land use change concept indicate a lively debate is in store for the European Commission. The EC invited comments on several possible policies in preparation for implementation of the EC Renewable Energy Directive and related Fuel Quality Directive. The commission's goal is to submit a report by the end of March so member states can take into account their individual national renewable energy action plans, which must be submitted by the end of June 2010.

In the notice for preconsultation, several policy options were set out, including:
- Extend to other commodities/countries the restrictions on land use change that will be imposed on biofuels consumed in the European Union.
- Seek international agreements on protecting carbon-rich habitats.
- Do nothing.
- Increase the minimum required level of greenhouse gas (GHG) savings.
- Extend the use of bonuses.
- Require additional sustainability requirements for biofuels from crops/areas whose production is liable to lead to a high level of damaging land use change.
- Include an indirect land use change factor in GHG calculations for biofuels.

Responses to the preconsultation were somewhat predictable with the biofuels industry and developing nations raising questions about the reliability of indirect land use modeling, and the majority of European countries and environmental groups strongly supporting the use of the concept. The United Kingdom, Denmark, Netherlands and Norway were among those that said doing nothing is not an option. Others such as France and Poland were supportive of the concept but expressed the need for caution before applying it in the near-term. Austria, Italy and Spain expressed stronger concerns about the use of the indirect land use theory. Spain suggested the GHG reduction targets are enough. The EU's renewable energy policies start at a 35 percent reduction in GHG for biofuels compared to fossil fuels, rising to 60 percent reduction for new facilities, and 50 percent for existing installations by 2017.

Outside of Europe, Indonesia and Malaysia echoed Italy's input that the GHG reduction targets are sufficient. Malaysia called for land use discussions to consider the impact of such policies on rural incomes, and suggested the notion of stopping deforestation in developing countries is one-sided. The Malaysian response was that the EU should practice reforestation. China brought in the food-versus-fuel debate by suggesting the EU prohibit the importation of biofuels made from food crops from food-scarce countries. Brazil and Argentina said their experience calls into question the reliability of indirect land use modeling. Productivity gains in Argentina means the country now raises the same number of cattle on less land, indicating a positive GHG savings from land use change. The Brazilians pointed out that since 2004 as biofuel production has increased, sugar cane production and cattle herds have been increasing, while deforestation in the Amazon is decreasing.

Brazil also pointed out that policies preventing the development of an international market for sustainable biofuels will become a de facto direct subsidy to fossil fuel consumption, which the EC policies intend to reduce, and will thus indirectly increase GHG emissions. In addition, Brazil raised the point that developing countries have been hurt by developed countries' farm policies that have resulted in production surpluses and low world-crop prices. "The possibility of sustainably producing biofuels and becoming energy suppliers represents a new opportunity to revitalize the agricultural sector in [developing] countries," the Brazilians wrote. Several of the international responses also questioned the compatibility of proposed policies with both world trade agreements and the United Nation's climate change efforts.

More than 50 responses were received from private industry and organizations. The European Biodiesel Board called the indirect land use change concept debatable and challenging. "The cause-effect relations implied are open loops of many 'if' questions that are extremely difficult, if not impossible to be capped by an econometric model," they wrote. It is impossible to link indirect land use change effects to individual consignments of biofuels, they added. The EBB also suggested that if sustainability concepts were applied to all agricultural production regardless of its end use, whether for food, feed, bioenergy or other industrial applications, indirect land use change would not be an issue.

The EBB also suggested the positive indirect effects of agricultural production for energy be considered, such as the improved yields for both oilseeds and cereals when new oilseed crops for biodiesel production are added to crop rotations. Biofuel crops can be a tool for local progress in developing countries, and the investments brought by energy crops help improve agricultural mechanization and yields worldwide, according to the EBB. Furthermore, biofuel coproducts have brought abundant supplies of feed, displacing the need for more land for feed cultivation and decreasing feed prices.

The European Oilseed Alliance put numbers to those coproduct feed benefits. Pointing out that 70 percent of the soy meal used by European livestock feeders is imported, the oilseed alliance said biodiesel production in Europe has led to the production of 4 million tons of rape meal, which substitutes for an equivalent of 2 million hectares (5 million acres) of soy production in Brazil. European use of rapeseed meal is projected to reach 16 million tons by 2020, they add, which would displace 8 million hectares of soy production in Brazil by 2020.

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