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Britain urges ‘cautious approach’ on biofuels

Britain urges ‘cautious approach’ on biofuels

Britain urges ‘cautious approach’ on biofuels
July 7, 2008

Britain and the E.U. should exercise caution in pushing for wider use of biofuels, warns a new study commissioned by the U.K. government.

The report — dubbed the “Gallagher review” [PDF] for Ed Gallagher, the chair of the government’s Renewable Fuels Agency who conducted the study — examined the social and environmental impacts of biofuel production. It concluded that while governments should not abandon biofuels as an energy source, the introduction of biofuels “should be slowed down to take into account emerging scientific evidence about their sustainability.”

“We have concluded that there is a future for a sustainable biofuels industry but that feedstock production must avoid agricultural land that would otherwise be used for food production,” stated the review. “The introduction of biofuels should be significantly slowed until adequate controls to address displacement effects are implemented and are demonstrated to be effective. A slowdown will also reduce the impact of biofuels on food commodity prices, notably oil seeds, which have a detrimental effect upon the poorest people.”

Proposed trajectory of EU policy

The review comes less than a week after The Guardian reported on a World Bank working paper that attributed 75 percent of the 140 percent rise in global food prices since 2002 to the biofuel boom.

Still the new study is optimistic that a sustainable biofuels industry could help meet future energy demands while reducing global greenhouse gas emissions by 338 – 371 million metric tons of carbon dioxide by 2020.

“It is clearer than ever that we need to break our dependence on oil. To tackle climate change we will need to develop new, cleaner fuels — but that doesn’t mean pushing forward indiscriminately on biofuels that may do more harm than good,” said Environment Secretary Hilary Benn. “We need to proceed more cautiously than previously thought, but we should not give up on the potential for some biofuels to help us tackle climate change now and in the future. This isn’t just about our own targets here in the UK – we will be pressing hard in Europe to ensure that any future EU biofuels targets are also conditional on strong sustainability criteria which include the indirect impacts of producing them.”

‘No’ to a moratorium, but take ‘cautionary approach’ to biofuel targets

Estimated GHG savings of current biofuels

The Gallagher review says that a moratorium on biofuels should be rejected: “A moratorium will reduce the ability of the biofuels industry to invest in new technologies or transform the sourcing of its feedstock to the more sustainable supplies necessary to create a truly sustainable industry. It will make it significantly more difficult for the potential of biofuels to be realised.”

The report says that Britain’s current Renewable Transport Fuel Obligation target of 5 percent should be extended to 2013-2014 from the current 2010-2011 horizon and argues that an E.U. target level of 10 percent may be achievable by 2020 if it can be shown that fuel is “being delivered sustainably and without significant impacts on food prices.”

The review recommends the establishment of sustainability criteria for biofuels to address indirect, as well as direct, effects on land use including deforestation. Environmentalists have linked agricultural expansion for biofuel feedstocks (oil palm, sugar cane, soybeans) to forest clearing in the Amazon and Southeast Asia.

“We cannot afford to abandon biofuels as part of a low carbon transport future,” wrote Gallagher. “Equally, we cannot continue producing biofuels which are ultimately more environmentally and socially damaging than the fossil fuels they seek to replace.”

Gallagher review (PDF)

Summary of conclusions and recommendations (excerpted from the report)

1. Biofuels can only contribute GHG savings from transport if significant emissions from land-use change are avoided and appropriate production technologies are employed.

  • The Government should amend but not abandon its biofuel policy in recognition of the indirect effects to ensure its biofuels policy delivers net GHG benefits. Specifically:
  • At EU-level, targets within the Renewable Energy Directive and Fuel Quality Directive should recognize the need to avoid both direct and indirect landuse change that leads to significant loss of carbon stocks;
  • Biofuels support mechanisms should exclude feedstock grown on land where carbon losses arising from its cultivation lead to a payback of longer than 10 years by the biofuel produced
  • This could be achieved by conducting site specific assessments of anticipated payback times. These should be performed before any idle land that is permanent pasture is converted for biofuel production;
  • Biofuels support mechanisms should specifically exclude feedstock grown on land designated as of high conservation value;
  • Further work should be conducted concerning:
    • Indirect effects of EU policy;
    • Carbon losses associated with land change, especially for pastures;
    • The net benefits of growing biofuel feedstock on idle land;
    • The nitrogen cycle.

    2. Demand for food, animal feed and bioenergy is rising and creating additional pressure on land. Estimates of future demand and the amount and suitability of land potentially available are highly uncertain. The balance of evidence indicates there is sufficient land available to satisfy demand to 2020, but this needs to be confirmed before global supply of bioenergy increases significantly. Current policies do not ensure that additional production moves exclusively to suitable areas. Attempts to direct agricultural expansion to particular areas face significant implementation and enforcement challenges.

  • Biofuels policies need to require the utilization of feedstock that does not cause a net additional pressure on current agricultural land. This includes use of appropriately defined idle agricultural land, marginal lands, wastes and residues and intensification of current production.
  • Further work is needed to develop definitions for idle and marginal lands. Assessment tools must also be developed and procedures implemented to confirm the suitability of specific locations before any land change occurs. This should take into account:
    • The land’s existing use;
    • The land’s productive potential;
    • The net carbon impact of using the land for biofuels;
    • The land’s existing environmental value; and
    • Social implications of its use for biofuels.
  • Only a proportion of available idle land should be used for bioenergy production to manage the risk of indirect land-use change;
  • The EU should reassess the amount of appropriate ‘idle’ land available within the EU to 2020, taking into account forecasts on increased demand for food and animal feed. 3. Advanced technologies have significant potential, but may only produce biofuels with higher GHG savings if feedstock production avoids use of existing agricultural land that leads to indirect land-use change. This can be achieved using feedstock grown on marginal land or that does not use land, such as wastes and residues (although this may compete with other uses of these materials). Advanced technologies are immature, currently expensive and require specific incentives to achieve significant market penetration before 2020.
  • There should be a specific obligation on transport fuel suppliers to supply biofuels achieving a high level of GHG saving (possibly greater than 75%) from:
    • Appropriate wastes and residues;
    • Feedstock grown on marginal land; and
    • Other technologies and feedstocks that avoid indirect land change (for example algae).
  • The EU needs to determine how increasing targets for heat, power and renewable transport fuels compete for wastes and residues and how this competition should be managed;
  • Further work should be undertaken to assess how a specific obligation, and constraints on feedstock, will affect the development of the market for advanced biofuels. This should be used to refine a target range for 2020;
  • Current evidence indicates an achievable target range for 2020 to be of the order of 1-2% by energy of road transport fuels;
  • The European Commission should propose a technology-neutral approach within the EU Renewable Energy Directive to incentives for advanced technologies, focusing on feedstock type and type of land on which it has been produced. 4. Current lifecycle analyses of GHG-effects fail to take account of indirect land-use change and avoided land use from co-products. As a consequence:
  • GHG-based targets may result in a greater land requirement, and land-use change, than a volume or energy-based target; and
  • Second generation biofuels using feedstock grown on existing agricultural land may cause greater net land-use change than first generation biofuels that also produce co-products that avoid land use. Quantification of GHG emissions from indirect land-use change requires subjective assumptions and contains considerable uncertainty. The role of co-products in avoiding land-use change requires further examination.
  • Basing incentives and targets for biofuels on their GHG savings remains the optimum policy approach but should only proceed once the implications of indirect effects and avoided land use from co-products have been fully explored and adequately incorporated into calculation methodologies.
  • Urgent further work is needed to enable incentives and targets for biofuels to be based upon lifecycle greenhouse gas emissions that include:
    • Indirect land-use change;
    • Avoided land use from co-products;
    • Effects of competition for limited wastes and residues; and
    • Potential additional carbon sequestration from utilizing marginal land.
  • The European Commission should specifically consider the findings with respect to avoided land use from co-products as part of the on-going design of the Fuel Quality Directive and the mandatory threshold for GHG savings proposed in the Renewable Energy Directive. 5. Lower targets for biofuels and shifting production to idle and marginal land will reduce pressure for land-use change. Stronger policies are needed to slow rates of deforestation particularly in South America, Africa and parts of South-East Asia.
  • Mechanisms for crediting foregone land-use change need to be incorporated into the next global climate agreement to discourage countries from deforesting areas of land;
  • Carbon and sustainability certification used for biofuels should be extended to all agricultural activities over time;
  • Significant increases in the use of land for bioenergy, and biofuels specifically, should only be contemplated once effective controls are implemented at a global level. This is to avoid indirect land-use change causing significant GHG emissions or destruction of high value conservation areas; and
  • Sustainability standards should also be extended beyond biofuels to all agricultural production. 6. Increasing demand for biofuels contributes to rising prices for some commodities, notably for oil seeds. In the longer term this has a net small but detrimental effect on the poor that may be significant in specific locations. Shorter-term effects are likely to be significantly greater. Lower biofuel targets and directing production onto idle land reduces these negative impacts. There is some potential for the poor to benefit from biofuel production in some areas where the land is available and where the necessary infrastructural investment is forthcoming. This might be accelerated by policy directing sustainable production on to suitable idle and marginal land.
  • Biofuels targets and policies should be constructed to ensure long-term impacts on food prices do not significantly disadvantage the poor. For example, this could be achieved by focusing production away from existing agricultural land except where this is made possible by intensification;
  • International, short-term, targeted assistance should be provided to reduce the effects of the current spike in food commodity prices on the poorest;
  • Social criteria, including land rights, should be incorporated within biofuels sustainability requirements; and
  • Targeted support to develop biofuel feedstock production should be directed to Southern Africa, Latin America and parts of South-East Asia where the existence of underused arable land offers considerable potential for biofuels to realize economic benefits. 7. Mechanisms do not yet exist to accurately measure, or to avoid, the effects of indirect land-use change from biofuels. Consequently, the net GHG emissions from current biofuel targets cannot be assessed with certainty, and there is a risk that any biofuel target could lead to a net increase in GHG emissions. The assessments underpinning the EU 2020 10% target and RTFO did not adequately address indirect landuse change. A framework to prevent biofuels causing land-use change has been proposed but is challenging and will take time to develop. The practical details, implementation and enforcement regime, need to be defined and will determine the overall effectiveness of the approach. In the meantime the rate of introduction of biofuels should be slowed.
  • The current RTFO target for 2008/09 should be retained but the RTFO Order amended to require a lower rate of increase of 0.5% pa rising to a maximum of 5% by volume by 2013;
  • The C&S reporting should be revised to include idle and marginal land and increasing targets set for companies for the proportion of feedstock that demonstrably does not cause indirect land-use change. These targets should be made mandatory (along with other sustainability criteria) as soon as possible;
  • Mandatory sustainability criteria within the EU Renewable Energy Directive should be strengthened and consistently implemented for biofuels for transport and heat and power. This should include requirements for biofuel feedstock to avoid indirect land-use change;
  • To complement and coincide with the 2011/12 EU review of member states’ progress on biofuels targets, it is recommended that progress on sustainability is reviewed in 2011/12;
  • Until biofuels are demonstrably sustainable, including addressing indirect land-use change, the European Commission should not allow Member States to supply more than 5.75% (by energy) of biofuels; and allow more cautious Member States to supply biofuels to 4% (by energy);
  • Progress to higher targets for current technologies should only be implemented beyond 2014 if biofuels are demonstrably sustainable, including avoiding indirect land-use change;
  • A second obligation to produce feedstock from appropriate wastes, residues and production on marginal land should commence in 2015. A target of 1-2% by 2020 is proposed but should be subject to further detailed consideration along with the buy-out price;
  • A lower EU 2020 target is proposed in recognition of the risk of indirect landuse change and absence of adequate control measures. A target range of 5-8% (including 1-2% from advanced technologies) is suggested with the higher target triggered only if milestones in 2013/14 are met. Higher targets, up to 10% (by energy) might be possible if sufficient controls are enforced globally on land-use change and new evidence provides further confidence that the effects upon food prices are manageable. An accelerated rate of biofuel introduction should not be introduced before around 2016;
  • Biofuel targets should not be mandates but obligations with an appropriate “buy-out” price set; and
  • The Fuel Quality Directive should not imply a higher level of biofuels than suggested for the Renewable Energy Directive. 8. Large areas of uncertainty remain in the overall impacts and benefits of biofuels. International action is needed to improve data, models and controls to understand and to manage effects.
  • There should be an urgent meeting of international experts to consider the findings of the study along with other recently published research and take forward the suggestions for further work given here. This workshop should focus upon the areas of uncertainty highlighted by the review;
  • The Government should seek to take forward, or encourage others to initiate, the further work indicated in the table in chapter 9.

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