Industry Group: EU Commission Biofuels Policy Set to Decimate the Biofuels Industry

"As such any ILUC figures – especially as high as 55g for oilseeds - are arbitrary. The review clause in 2017 leads to more regulatory uncertainty, discouraging investments in advanced biofuels plants."

18 Oct 2012 --- The EU farmers and biofuels industries remains steadfastly opposed to the European Commission’s proposal to limit biofuels made from certain arable crops and to add indirect land use change( ILUC) to the renewable energy and fuel quality directives. A proposal based on what the group the Biofuels Value Chain, calls “unfounded and immature ILUC science and a 5% cap in 2020 would destroy the biofuels industries and related sectors such as crushing and sugar facilities. It would also cut off European farmers from a key market, reducing the crops diversification.” Any change in policy must safeguard the investments made and ongoing toward fulfilling the Commission’s initial objectives of 10% renewable energy for transport production in the EU. Fundamental problems remain in the EC proposal which will have devastating impact on the biofuels industries and diversification of farmers’ revenues.

ILUC is introduced indirectly and immediately in both directives through reporting obligation from fuels suppliers to Member States. It is totally unacceptable to use the International Food Policy Research Institute (IFPRI) report which has not been peer reviewed as a basis to introduce iLUC values, the group claimed. The model used for the report is not suitable for precisely estimating the extent of land use change and the resulting greenhouse gas emissions, due to critical data errors and important methodical problems. As such any ILUC figures – especially as high as 55g for oilseeds - are arbitrary. The review clause in 2017 leads to more regulatory uncertainty, discouraging investments in advanced biofuels plants.

Given that some Member States already have national targets above 5%, the Commission's proposal would first and foremost penalise European production by bringing the development of this sector in the affected Member States to an abrupt halt and leading to a slowdown in industrial and agricultural activity and the loss of jobs. For this reason, an EU policy U-turn would risk restructuring of the industry in the crushing and sugar facilities.

The EU must recognize that multiple counting is not going to boost the advancement of biofuels and putting a break on policy decisions that were made two years ago will diminish investors’ confidence: existing companies and investors in arable crop based biofuels are and will be key to producing large scale advanced biofuels.

The phasing-out of biofuels made from certain arable crops based on the notion that doing so will substantially influence food security and food prices is faulty. In fact, biofuels production in Europe 1 For example, they have failed to take into account 410 million ha and the protection measures stipulated in Directive 2009/28 such as bans on land use change are not taken into account. The models cannot make the distinction between direct and indirect land use changes. triggers local co-products that are essential for the feed and food chain in Europe and the industry is committed to maintaining this balance, which also gives an essential contribution to secure food in Europe.

The EU farmers and biofuels industries look forward to working to ensure that an industry that plays a crucial role in reducing greenhouse gases, enhancing Europe’s energy independence; and creating sustainable jobs, remains viable. Today’s proposal fails to recognize what the EU farmers and biofuels industries have achieved to date. It will jeopardize investments, jobs in rural areas and prevent development of advanced biofuels. We strongly urge the European Parliament and the Council to incorporate changes to rectify these problems and look forward to working with them to that end.