Ambassadors dispute EU biofuel policy amendments

Web exclusive posted Nov. 12, 2008 at 10:45 a.m. CST

Ambassadors from eight countries have sent a letter to the European Union disputing the inclusion of indirect land use change when calculating greenhouse gas emissions for biofuels imported by Europe.

A similar debate is occurring in the United States regarding the U.S. EPA's methodology to measure green house gas emissions from indirect land use changes under the renewable fuels standard enacted in the Energy Independence and Security Act of 2007.

The letter to the EU was signed by ambassadors from Argentina, Brazil, Colombia, Malawi, Mozambique, Sierra Leone, Indonesia and Malaysia. In the correspondence, the group reminded the council of several meetings with the council presidency earlier this year to discuss the development of European biofuels policies and called some of the new provisions in the draft problematic and incompatible with articles of the General Agreement of Tariffs and Trade, and the Agreement on Technical Barriers to Trade. It further suggested that some countries may file a World Trade Organization complaint as a last resort, if the provisions were to be permanently implemented.

The European Commission recently proposed several amendments to policies set in 2007 which would increase the use of biofuels to 10 percent of all transport fuel by 2020. This was in response to speculations that the ambitious targets may cause more damage than good in relation to greenhouse gas emissions, global warming, and rising food prices. (Read EPM's story EU considers lowering biofuels targets)

The majority of the modifications involve land use change restrictions and greenhouse gas emissions calculations and savings. Although the renewable energy general target would remain at 10 percent, the commission included a modification which would steer away from biofuels generated from grains and crops. It called for five percent of transport fuels to be from renewable sources by 2015 � at least four percent of that amount is required to come from "new alternatives that do not compete with food production," such as hydrogen or biomass-generate electricity from waste, algae, and non-edible materials. It also suggested a review process of environmental effects and technological advancements in 2014.

Concerns with the modifications were outlined in the Nov. 6 letter, which initially called biofuels an "infant" industry needing a supportive and stable legal framework establishing a clear and ambitious indication of future demand, in order to encourage investment and technological development.

"We believe that the establishment of a review process in 2014, as proposed in Amendment 101 of the ITRE (European Parliament's Committee on Industry, Research and Energy) Committee Report, is not necessary and is likely to generate uncertainty for investors within and outside the EU," the ambassadors wrote. "We also believe that the creation of "subtargets" for electricity, hydrogen and specific types of biofuels hinders the organic development of renewable options for the transport sector, by arbitrarily favoring some untested technologies to the detriment of others, without due consideration of costs and technical viability."

The letter continued to comment on other aspects of the proposed amendments, complemented by technical annexes in which some points were explained in greater detail.

"The inclusion of low density forests and savannah and scrubland as 'no-go areas' for the production of biofuels is environmentally unjustified because these are among the ecosystems with the lowest carbon stocks, and because any significant carbon-stock loss is already prevented by the requirement of net emissions savings," the group stated in the letter. "This provision would make the development of biofuels production in developing countries virtually impossible because practically all agriculturally viable biomes would be banned-only biomes such as grasslands and deserts would be allowed."

The quantification of indirect land-use change effects from biofuels production will always be highly scientifically uncertain, the letter stated. "Not only due to lack of data (this can be improved in time), but because it relies heavily on imponderable and often unrelated variables, such as land-use policies and regulations in different countries and the commodities markets behavior." The ambassadors indicated that they felt the issue would be better addressed by the establishment of an ambitious savings target, which can offset any such indirect effects, complemented by a bonus mechanism to foster the production of biofuels with demonstrable low direct effects.

Other modifications were positively addressed in the letter, such as the removal of restrictions on the accounting of greenhouse gas emissions savings from excess electricity from cogeneration associated with biofuels production.

In the letter, the group ensured the EU it would continue to favor constructive dialogue with the European institutions as the best means for reaching a solution that is fair and effective, and foster the production of sustainable biofuels, mitigation of climate change, increasing of energy security and creation of economic opportunities. "It is in this spirit that we write this letter to you, and hope it will find a positive reception from your side," the letter concluded.