(Gerard Wynn is a Reuters market analyst. The views expressed are his own.)
By Gerard Wynn
LONDON Nov 14 The European Union wants bio-energy use to rise by more than half by 2020 arguing that the energy source is carbon neutral: the trouble is it isn't, and the target should in fact be scrapped.
Such a move would face huge opposition from farming, forestry and energy lobbies and slow or reverse a multi-billion -euro bio-energy industry in Europe.
Yet carbon emissions from burning bio-energy are actually often higher than for fossil fuels, while being deemed zero carbon under emissions trading rules and low-carbon in renewable energy targets.
Bio-energy refers to liquid or solid fuel derived from plants, whether food crops, wood or grasses.
Like fossil fuels petrol, diesel and coal, biofuels release carbon when they burn in a car engine or power plant.
But policymakers have maintained that energy from burning plants is non-polluting because the carbon released is the same as the carbon absorbed when the plants were growing.
This ignores the fact that planting a field of energy crops displaces what was grown there before, causing uncultivated land elsewhere to be ploughed up.
When that other field of grass, trees or scrub is converted to crops for consumption it can no longer absorb CO2, cancelling out the supposed "neutral" effect of bio-energy.
In other words, the idea that it is carbon neutral stops at the farm fence.
An exception is where the crop displaced by the energy crop, for example food or animal feed, is not replaced. But that means acknowledging some loss of utility in a long-running food-versus-fuel debate which the industry has always hotly disputed.
A European Environment Agency (EEA) panel of scientists two months ago in a note said: "The potential consequences of this bioenergy accounting error are immense".
They were affirming research first highlighted by Princeton University's Timothy Searchinger in a 2009 article in the journal Science.
The EEA is an EU agency which provides independent advice. Its science panel three years ago recommended that the EU's liquid biofuel target be suspended.
The error is critical because the EU's wider goal of deriving a fifth of the bloc's energy from renewable sources by 2020 depends heavily on bio-energy. (See Chart 1)
Meanwhile, the industry is expanding through targets for refiners and utilities to supply the fuel.
A joint venture involving oil company BP, Dupont and AB Sugar will launch a refinery in northeast England to annually process 1.1 million tonnes of wheat into bio-ethanol, and leans on the notion that the product is carbon neutral.
"The CO2 emitted when the biofuel is burnt in the vehicle is offset by the CO2 absorbed during the growing of the wheat crop," the Vivergo website says.
The error originally arose in the 1992 U.N. Climate Convention where bio-energy emissions were categorised under land use instead of energy, says Searchinger.
The 1997 Kyoto Protocol retained that approach. But under Kyoto, countries didn't have to account for land-use emissions in their emission targets, and so CO2 from bio-energy disappeared from such accounting altogether.
The carbon-neutral error adds to concerns that biofuels could actually lead to vast increases in carbon emissions, if farmers replace lost food crops by clearing forests, an effect referred to as indirect land use change (ILUC).
WHAT DOES IT MEAN?
The bottom line is that the full carbon emissions at the tail pipe or smokestack should be accounted for in bio-energy, just as for fossil fuels, instead of being ignored as at present.
Currently, bio-energy is exempt from greenhouse gas permitting in the EU's emissions trading scheme. Meanwhile EU officials are deciding which bio-energy fuels should count as renewable, depending on carbon emissions which will likely ignore the carbon neutral error. (See Chart 2)
Adding the emissions from burning it makes bio-energy much more polluting than fossil fuels because there are extra emissions from growing the crop and because the product has a higher moisture content than oil or coal. (See Chart 3)
So while bio-energy from plants still has a role as an alternative energy source, it should not be supported in renewable or low-carbon targets any more than fossil fuels.
It does makes sense to continue to support making energy from waste products including food, animal and sawmill waste.
And bio-energy can make some carbon savings, but it's debatable whether these are enough to offset the greater emissions compared with burning fossil fuels.
One way is by raising food prices which could help farmers improve crop yields, which means less uncultivated land is ploughed.
Another is if displaced food crops are not replaced, although that has implications for malnutrition.
Using by-products for animal feed could also save growing dedicated crops for livestock.
And savings are made if the energy crop produces more plant matter, and so absorbs more CO2, than the crop it replaces. That's the case, for example, where sugar cane to produce ethanol is grown on grassland.
But there are also carbon penalties, including the ILUC impact mentioned above.
Given the difficulty of calculating these savings and penalties as well as the wide-ranging academic estimates, the default assumption should be that these fuels are as carbon-emitting as fossil fuels.
Plantation forests for wood fuel don't escape, either.
A first crop may absorb more CO2 than the former land use. But in successive rotations, new saplings will absorb less carbon than if the harvested trees were allowed to grow to maturity.
Searchinger uses the example of a 55-year rotation of douglas firs to burn wood fuel, which emits four to five times more CO2 than burning coal or gas over 25 years, the usual period used in payback analysis. (Editing by Jason Neely)