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EU Announces Guidelines for Biofuel Sustainability Labeling

3p Contributor | Monday June 21st, 2010 | 0 Comments

By Mackinnon Lawrence

As part of the EU’s effort to improve the sustainability of biofuels used for transport in Europe, the European Commission (EC) adopted guidelines today to implement the European Union’s Renewable Energy Directive which forms part of its 2008 climate and energy package.

The package, which includes two communications and one decision, aims to ensure that biofuels produced and imported into the EU are done so without damaging the environment.

The move comes on the heels of heavy criticism from environmental groups who claim  that increased biofuel production would result in massive deforestation and have severe implications for food security, as energy crops replace other land uses (so-called ‘indirect land-use change’; see Biofuels on Hold Until More Studies Completed).

Background

In December 2008, EU leaders reached agreement on a new Renewable Energy Directive, which requires the 27 member countries of the EU to satisfy 10 percent of its transport fuel needs from renewable sources, including biofuels, hydrogen, and green electricity, by 2020 (see EurActiv LinksDossier).

The directive also established sustainability criteria for biofuels.  It obliges the bloc to ensure that biofuels offer at least 35 percent carbon emission savings compared to fossil fuels. The figure rises to 50 percent as of 2017 and 60 percent as of 2018 (EurActiv 05/12/08).

What does today’s announcement mean?

Only biofuels that meet the conditions set out in the package will count towards the targets that each of the EU’s 27 member states has to reach by 2020.

Under the 2009 Renewable Energy Directive, companies are eligible for national support such as tax relief.  No sanctions or bans on the use of biofuels that do not carry a sustainable label are foreseen.

The package’s key features:

  • The EU climate and energy package of 2008 fixes a legally binding, unilateral target of 20 percent greenhouse gas emissions reduction below 1990 levels by 2020.
  • It also requires the EU member states to achieve by 2020 a 20 percent reduction in energy use below 1990 levels by improving energy efficiency.
  • The package furthermore obliges EU member states to ensure a 20 percent share of renewable energy in the total energy consumption by 2020. Within this 20 percent for renewables, it sets a target of 10 percent for renewable fuels in the transport sector.

Sustainable biofuel certificate

As part of the EC’s guidelines, a “Recognized by the European Union” stamp will be added to the labels used by sustainability programs already managed by governments, civil society organizations, or industry bodies that meet EU criteria.

A Commission paper, which explains what industry, governments, or NGOs need to do to get a sustainable label for their biofuel use, provides an outline of standards for proposed schemes.

The EU executive hopes to have several schemes up and running by the December deadline for the EU-27 to comply with the new Renewables Directive, which requires greenhouse gas savings from biofuels to reach a minimum of 35 percent.  Schemes can be submitted for approval as of today (June 10, 2010).  Schemes will be subject to annual auditing and approved by the Commission for a five-year period, but can be “de-recognised at any moment” if they fail to deliver, according to a European Commission official.

A Brazilian sugarcane farmer, for example, must prove that his land was not converted from tropical forest to farmland since January 2008, and producers, traders and importers also need to prove a number of criteria related to farming, production, transport, and distribution.

But in the end, the burden of proof of sustainability will be on big companies that import biofuels like BP or Shell, Commission officials explained.

Sustainability criteria

EC officials have made clear that companies must not interpret existing EU rules to cut down forests or sow crops on partly drained peat lands for biofuels.  Even partly drained peat land still contains significant amounts of stored carbon, which can escape as carbon dioxide gas once the land is cultivated and contribute to climate change.

Accordingly, the EU executive’s document sets out which types of land should not be used to produce biofuels. These include natural forest, protected areas, wetlands, peatlands, and highly biodiverse areas.

The EU also explicitly demands that forest must not be converted into palm oil plantations and stipulates that biofuel from such production chains does not fulfil EU sustainability requirements.

The EU Delegation to Malaysia said in a statement Thursday:

The adopted package gives clear guidance to the Malaysian palm oil producers what they need to do to meet the EU’s sustainability criteria for biofuels, including palm-based biodiesel.  This will help investment decisions and marketing.  The Malaysian exports of biodiesel to the EU are still relatively small, but they are likely to grow during this decade as a result of the EU’s renewable energy policy.

The tighter rules on natural forests and peatlands could anger countries like Indonesia and Malaysia.  As major suppliers of palm, Malaysia and Indonesia have threatened to file a formal complaint with the WTO, arguing that the standards would exclude palm from worldwide markets (see Malaysia and Indonesia Gearing up for WTO Complaint Over Palm Oil Trade Barriers).

Officials said trade experts at the commission had established that the measures would be compatible with international trade rules, partly because they would apply equally to biofuels producers growing crops inside and outside the bloc.

Biofuels that produce 35 percent percent greenhouse gas emission reductions fulfill the EU sustainability criteria.  Meanwhile, biofuels produced by installations that were in operation on January 23, 2008 are exempted from complying with the greenhouse gas saving criterion until April 1, 2013.

Indirect land use change (ILUC)

The certification scheme and sustainability criteria do not take into account indirect land use change (ILUC).

An additional criteria for ILUC could be added to the sustainability schemes later on once the Commission has finished work on the matter, officials said.

They also stressed that recent EU studies show that biofuels are producing greenhouse gas emission savings, contrary to mainstream press reports.

NEXT  STEPS

  • By end 2010: Commission to publish report on indirect land use.
  • 5 Dec. 2010: Deadline for all EU countries to comply with new Renewables Directive. Greenhouse gas savings from biofuels to reach minimum 35%.

Image: Flickr/Wakx

Mackinnon Lawrence is an attorney with Cleantech Law Partners and edits & publishes BioMass Intel, a law and policy resource for the bioenergy sector.  He is also co-author of a recent aviation biofuels market report.


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