Into the Fray

Is Europe’s biofuel production good or bad for the environment?

Close up of gas pump with car and people in background

Combustible: Biofuels are the subject of intense debate in Europe. © 2012 E. Gaillard/Reuters

Biofuels have been a hot topic for well over a decade, but a recent series of reports prepared for the European Commission by an IFPRI researcher has turned up the heat on the biofuel policy debate by calling into question the overall impact of biofuel production on greenhouse gas emissions.

In 2009 the European Union (EU) adopted a Renewable Energy Directive that requires member states to use renewable energy sources for 10 percent of their transport fuel needs by 2020. The dominant share of this fuel will come from first-generation biofuels, based on food crops such as rapeseed. At the Commission’s request, IFPRI Senior Research Fellow David Laborde assessed the directive’s impact on land use and greenhouse gas emissions.

Laborde’s initial report in 2010 showed that the current EU mandate on biofuels would have limited positive effects on the environment and only moderate effects on food prices. But the part that generated the most attention claimed that the mandate would lead to changes in land use—that is, farmers would switch land into biofuel production, including previously unfarmed land—that could reduce the environmental gains of increased biofuel consumption. In a 2011 follow-up report, Laborde called for the EU to either limit the overall scope of its biofuel mandate or increase the required savings in greenhouse gas emissions for all biofuel crops to compensate for the emissions related to changes in land use.

Reining In Ambitious Mandates

In late 2011 the European Biodiesel Board, an association of biodiesel producers, expressed its displeasure in a press release: “It is consequently deplorable that the European Commission is currently grounding its assessment of the potential yet strongly debatable impact of [indirect land use changes] on biofuels’ greenhouse gas emissions on the US–based IFPRI study.” (For the record, IFPRI is an international organization.)

According to Laborde, his study used an advanced computational general equilibrium model to simulate economic scenarios and determine the most likely effects of different energy policies, including the current EU mandate on biofuels. “The main finding of the report is that we need to have a biofuel mandate that is not too ambitious,” he says. “If you start to increase demand for biofuels beyond a certain point, negative effects will dominate. Why? Because you will use more and more land to produce biofuel, and it will increase emissions coming from deforestation.”

Another important conclusion of his research, says Laborde, is that not all biofuels have the same environmental effects. “Using sugar to make biofuel is a good idea,” he says. “Using wheat to make biofuel is not too good an idea. And using soybeans to make biodiesel is very bad.” Laborde’s reports found that biodiesel production in the EU generates more negative environmental results than ethanol production.

Debate Continues

As a result of the IFPRI reports and other recent studies on biofuels, the European Commission revised its proposal in late 2012 to include estimates of indirect land use changes in reporting the overall environmental effects of increased biofuel consumption. It also proposed placing a limit of 5 percent on the mandate for first-generation biofuel use. According to Laborde, the revised policies represent a step in the right direction. The end goal of any policy mandate, he argues, should be to increase energy savings, which will lead to greater use of more efficient forms of biofuel and more efficient processing technologies.

The proposal has now moved to the European Parliament. Researchers and policymakers alike are paying eager attention to the ongoing discussions, given that EU policies will have lasting effects not only on global markets, but also on policy frameworks for many other countries.

For more information on this topic:

October 2011 report on European biofuel policies

Presentations on David Laborde’s research

Bioenergy research at IFPRI

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