October 5, 2011 / 8:31 AM / 8 years ago

Industry split emerges over biofuels' indirect impact

* Letter reveals industry split over biofuels’ indirect impacts

* Bioethanol body says EU rules should promote good biofuels

* Commission preparing rules on biofuels’ indirect land impacts

By Charlie Dunmore

BRUSSELS, Oct 5 (Reuters) - European bioethanol producers have broken ranks and urged EU policymakers to introduce rules on the indirect climate impacts of biofuels that distinguish between “good and bad biofuel pathways”, Reuters has learned.

The call is the first sign of a split within the EU biofuel industry on the controversial issue of indirect land use change (ILUC), which threatens to undermine the green credentials of some biofuels due to their role in diverting food into fuel tanks.

In a letter to the EU’s top climate and energy officials seen by Reuters, bioethanol industry body ePURE said it backs the introduction of EU rules that address ILUC directly.

A direct approach that penalises crop-specific biofuels for their indirect side-effects could wipe out much of Europe’s estimated 13 billion euro-a-year ($17.3 billion) biodiesel sector.

“ePURE will support a policy that... differentiates between good and bad biofuel pathways (and) addresses ILUC directly,” said the letter sent to EU energy chief Guenther Oettinger and climate chief Connie Hedegaard in July.

ILUC states that if food crops are diverted to biofuel production, those missing tonnes of food must be grown elsewhere to avoid increasing global hunger.

If the crops to make up the shortfall are grown on new farmland created by cutting down rainforests or draining peat land, this can release enough climate-warming emissions to cancel out any theoretical emission savings from biofuels.

Four draft EU studies showed earlier this year that biodiesel produced from European rapeseed, Asian palm oil and South American soy beans all have a bigger overall climate impact than normal diesel when ILUC emissions are taken into account.

By contrast, the studies found that ILUC emissions were much lower for bioethanol produced from corn, wheat and sugarcane, as well as next-generation biofuels produced from non-food sources such as straw and other farm residues.

“It is encouraging to see that companies that make better biofuels are starting to recognise that a scientifically credible biofuels policy can actually help them instead of harm them,” said Nusa Urbancic of green transport campaigners T&E.


The European Commission is debating how to address ILUC within its target to increase biofuel use to about 10 percent of all road fuels by 2020, from less than three percent now.

If EU rules penalise individual biofuels for their specific ILUC emissions, ePURE members such as Spanish ethanol producer Abengoa and Danish enzymes producer Novozymes (NZYMb.CO) stand to benefit at the expense of biodiesel producers.

Internal minutes of a meeting between Oettinger and Hedegaard in July suggested that the Commission was planning to delay direct rules on ILUC in favour of an indirect approach that penalises all biofuels equally.

This would involve raising the carbon-saving threshold that biofuels must meet compared with conventional fuel to count towards the EU target — currently set at 35 percent from 2013, and 50 percent from 2017 — though precise values were not specified.

Such an approach is seen as a way of protecting farmers’ incomes in top rapeseed producers Germany and France, and safeguarding existing investments in the bloc’s biodiesel sector.

But critics of such an approach say that despite the scientific uncertainty surrounding ILUC modelling, the EU’s policy should differentiate between the least and most harmful biofuels.

“Reaching a consensus on ILUC is challenging as the modelling is incomplete. But it’s an opportunity to promote good conventional biofuels, and kick-start a new advanced biofuels industry,” Novozymes’ European President Lars Christian Hansen told Reuters. ($1 = 0.753 Euros) (Editing by James Jukwey)

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