Mathematical Tricks, Backdoor Policies

By Robert Vierhout | November 05, 2012

After almost three years of study, debate, hours of meetings, many reports, public and nonpublic consultations, the European Commission has released its legislative proposal on how to address the indirect land use change effects of the European biofuels policy.

Everyone was expecting the introduction of an indirect land-use (ILUC) factor into the law, but strangely enough this didn’t happen: the ILUC factor has been put in the fridge. The Commission, out of the blue, said more study is needed and will submit yet another report, this time by the end of 2017.

That doesn’t mean that what has been put on the table is good. The use of biofuel from food/feed crops is limited to 5 percent—the current level. After 2020, it’s game over. Instead of instant death, it is now death by stages.

This season’s lower crop yields must have come as a godsend for the European Commission. No more worries whether the ILUC science is right or wrong. Blame biofuels for the increase in commodity prices and limit its production. Less biofuel means more land for growing crops for food. ILUC problem solved.

Capping the use of first-generation biofuels is not only simplistic, it is also naïve and irresponsible policymaking. Does the Commission really believe that such an approach will reduce the hunger problem in the world? In the EU, we use 9 million tons of grains for fuel ethanol production from about 1.5 million hectares of land. With today’s global grain production of 2.2 billion tons, this is next to nothing (0.004 percent). But Europe, by abandoning its biofuel policy is going to make the difference in feeding the world! That in the future we will need to find 3 million more tons of animal feed outside EU is just a minor detail, as is using more fossil fuel.

The oversimplification doesn’t stop there.

The 10 percent target for 2020 has not changed, and to fill the gap created by limiting first generation to 5 percent, the following accounting trick is being proposed: On top of double counting some biofuels from preferred feedstocks, we should quadruple count biofuels from 14 raw materials such as algae, crude glycerine, straw, manure, husks, cobs, etc.

So, imagine. You have a cow you feed cereals and make biofuels from the manure—modern technology brought back to its essentials. Every liter of manure biofuel will count four times. Three virtual liters of biofuel means the equivalent amount of additional fossil fuel. So, there is no additional greenhouse gas emission savings, no increase in energy security, no diversification of energy sources. The oil companies love this approach to promote advanced biofuels—or this clever way of promoting more fossil fuels through the back door. 

Investments going down the drain is not a mathematical trick, it is reality. For ethanol alone, the investments already reach 9 billion euros, supporting 100,000 jobs. The proposal is shockingly bad for the European biofuels industry. It is a slap in the face of those committed entrepreneurs and investors who have spent time and money creating a new promising industrial sector and who drove it to the highest environmental sustainability standard you can imagine. What should have become a precursor of the much praised and heralded bio-economy will fade away, as will the bio-economy.

Instead of incentivizing better biofuels and recognizing the benefits of high-protein coproducts, the Commission has surrendered to the imaginary concerns and unproven scenarios of NGOs. Instead of boosting the economy, recognizing the contribution of biofuel to increased agricultural yields and more sustainable agriculture, the Commission is sending another sector to the grave. The economic crisis seems to have paralyzed the forces that counterbalance excessive environmentalism. Surely, with this kind of erroneous industrial policy, we will not save Europe’s industrial competitiveness. 

We will not yield that easily.

The EU bioethanol industry will do everything in its power in the next year to obtain support from the more sensible and responsible decision makers to safeguard investments, jobs and an industry with enormous potential for moving towards a bio-economy. Consistency in policy is vital to maintain a stable investment climate. By changing the rules of the game even before half-time, the Commission is giving the wrong signal to investors: be aware, we can change the rules any time. Don’t put any trust in us.

Author: Robert Vierhout
Secretary-general, ePURE
[email protected]