EU’s new environmental policy on biofuels impacts both the environment and the European citizen

Joint press conference last February by Maroš Šefčovič, Vice-President of the EC, and Miguel Arias Cañete, Member of the EC, on the strategy of the EC to achieve a resilient Energy Union with a forward-looking climate change policy (EC Audiovisual Services, 25/02/2015)

Joint press conference last February by Maroš Šefčovič, Vice-President of the EC, and Miguel Arias Cañete, Member of the EC, on the strategy of the EC to achieve a resilient Energy Union with a forward-looking climate change policy (EC Audiovisual Services, 25/02/2015)

The proposal of the European Commission (EC) back in 2012 regarding the reduction of traditional biofuels as renewable energy sources to 7% of final energy consumption in transport by 2020 seems to have serious chances of being adopted by the European Parliament (EP) since the environment committee was in favor of this proposal during yesterday’s meeting.

The reason that this percentage is about to be set at 7% and not 10%, which was initially the cap for biofuels, is because the first-generation ones have been causing indirect serious damages to the environment and are not contributing to it as it was once though they would. This change (if implemented) will influence Europe’s approach on the decrease of the greenhouse gas (GHG) emissions by 2030 as well as its environmental policy and targets set to tackle this long-lasting issue.

The biofuels’ industry will certainly be affected by this. The companies and the people working on this field will face the consequences of the new policy reform that the EP will set to all EU member states. It is difficult to prejudge the economic outcomes but it seems that a reduction of conventional biofuels will influence the economies that rely on it and its people who will face unemployment or reduction of their working hours.

Traditional biofuels

The problem in the equation Biofuels have been increasing in the last decade dramatically due to the need for alternative renewable energy sources. The conventional or traditional or first-generation biofuels are made from commodities such as corn, sugar cane and vegetable oil. These biofuels are produced by growing the aforementioned commodities in a portion of land that was formerly used to grow other crops.

This is one of the reasons that farmlands are reduced which leads to deforestation in order to find more free land that will be used to grow food crops. This is known as indirect land use change (ILUC) and is responsible for the increase of GHG emissions and shows that these biofuels are not the right ones to resolve the issue of environmental pollution.

Investing in advanced biofuels

Consequently the EC is raising the issue that first-generation biofuels do not have the benefits that were expected and must be reduced to 7% by 2020 and even further later on in order to be able to lower the GHG emissions in the Old Continent. The alternative solution that is proposed is the increase of second and third generation biofuels that are made by waste and algae respectively.

If Europe invests on these biofuels then the desired decrease of the GHG emissions could follow. However, this advanced field is not as explored as the traditional one and lots of steps must be done and targets must be set in order to achieve tangible environmental outcomes. The latter means that the next policy reform must contain severe measures on national EU level which is making things very difficult since it is very hard to implement such rules to each and every country separately.

Furthermore, as Robert Wright , secretary General of the European Renewable Ethanol Association stated yesterday:  “The absence of binding targets for advanced biofuels and renewable energy (ethanol) use in petrol, both key measures to differentiate better biofuels, and both supported previously by the European Parliament on several occasions, undermines the core objectives of this reform. The non-inclusion of these items represents a missed opportunity to amend this legislation in a meaningful way that is consistent with the aims of the Commission’s original proposal.  While today’s vote is a first step to providing some policy certainty to the industry, the result does not sufficiently incentivize the use of biofuels with better GHG performance. The draft legislation is also inconsistent with the EU’s commitment to promote innovation and investment and protect sustainable jobs and economic growth.”

Will Europe meet the predetermined targets?

It is too optimistic at this point to believe that Europe will meet the targets set for the reduction of the GHG emissions by 2030. On the one hand, it is great that the EC is learning from the mistakes of the past and tries to correct them by reducing the cap of the traditional biofuels while at the same time focusing on expanding the advanced ones. On the other hand, most of these biofuels are at an experimental stage and cannot be produced in large quantities, which measn that cannot be the short-term solution to the battle against the GHS emissions.

Unemployment and shrinking of traditional biofuels industry

It is clear that the European institutions are willing to reduce and vanish from the map the first-generation biofuels. Nevertheless, that will cause huge economic impact to this industry and the economies that depend on it. First, many people will eventually lose their job or forced to look for a job outside Europe where such biofuels still exist.

This could be a shock not only for Europe that will lose its human capital but also for the EU citizens who will be face unemployment. Thus, the next meeting at the European Parliament is a catalyst for the agreement of the EC’s text on the reduction of the biofuels cap to 7%. A solution of a calmer transition for the national economies and EU citizens that rely on this form of renewable energy sources needs to be addressed at this gathering.

This plenary session will be held on 27-30 April in Strasbourg and the EP will then finally decide not only on the fate of the environmental future of Europe but also on the fate of hundreds of thousands of jobs.

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