Friday, 8 February 2008

Proposed European ban to affect crops worldwide

Proposed European ban to affect crops worldwide
Posted on February 6th, 2008 Posted in Greenwire: COPENHAGEN —

A proposed European Commission ban on biofuels deemed environmentally unfit is likely to have a global impact on a type of renewable energy once touted as key to weaning economies from oil and curbing emissions of heat-trapping greenhouse gases.

The proposal — which could affect how palm oil biofuel is produced in Southeast Asia or how corn ethanol is made in the United States — was unveiled last month as part of the European Union’s ambitious plan to fight climate change. The plan forces member states to cut carbon emissions by 20 percent while making sure biofuels make up at least 10 percent of transportation fuels by 2020.

To meet renewable energy targets and be eligible for subsidies, biofuels used in Europe must emit at least 35 percent less carbon dioxide compared to oil and must not be produced in areas currently covered by forests, nature preserves, wetlands or highly biodiverse grasslands.
Biofuels that fail to meet the standards won’t be allowed on the European market.

Those that do will be rewarded with a premium, with binding targets meant to offer certainty to investors who will know they can sell environmentally sustainable biofuels at a higher price. Producers will have to prove to member states that they meet the standards, and their claims will be independently audited. The commission also pledged to designate sustainability requirements for biomass by the end of 2010.

“While biofuels are the only viable alternative transport fuel for the foreseeable future, at least until hydrogen becomes competitive, their growth requires criteria to be set for the environmental sustainability of biofuels,” Jose Manuel Barroso, president of the European Commission, said last month in a speech at Lehman Brothers in London. “I think our focus should be firmly on only sustainable biofuels, that is to say only those which produce a substantial CO2 saving compared to the oil that would be consumed instead.

“I feel confident that the outcome will provide the most comprehensive and sustainable system anywhere in the world for the certification of biofuels and for domestic and imported biofuels alike,” he added. “We will continue to promote the rapid development of second generation biofuels. This is critical to attaining public confidence that the environmental benefits of using biofuels outweigh any possible disadvantages.”

Europe has encouraged the production of biofuels since 2003, when the European Parliament set a biofuels target of 5.75 percent of all transportation fuel on the market by the end of 2010, with 2 percent to be reached by 2005.

But this interim target hasn’t been achieved, with biofuels counting for 1 percent of transport fuel in 2005. The European Commission has concluded the 2010 target will also be missed, with biofuels reaching 4.2 percent of transport fuels by then.

‘A very complicated situation’
Biofuels cost more than other forms of renewable energy, and the commission expressed worries that without a separate minimum target the fuel won’t be developed. Despite mounting complaints about the technology’s true environmental effects, the commission argued that more biofuels use and increased vehicle efficiency are the only ways to make a significant impact on greenhouse-gas emissions in transportation. Moreover, biofuels can also put a dent in the transport sector’s dependence on oil, whose security of supply is a growing headache for net importer Europe.

But enthusiasm for the technology has been cooling off in many quarters. The week before the commission announced its proposed biofuels rules, Britain’s national academy of sciences, the Royal Society, warned that efforts to encourage biofuels production must deliver significant reductions in greenhouse emissions to be worthwhile.

Proponents of biofuels say they are carbon-neutral, because plants absorb CO2 as they grow, canceling out the emissions released by the consumption of the resulting fuel. But this doesn’t account for emissions produced when processing the crops into fuels or the emissions produced by fertilizers used in agriculture — factors that can vary greatly from one biofuel to another.
“Biofuels appear to be carbon-neutral, renewable and capable of being cultivated in many different environments.

The full picture, however, is much more complex as different biofuels have widely differing environmental, social and economic impacts,” the Royal Society said, warning that widespread deployment of biofuels will have major implications for land use and unintended consequences that may override expected benefits.

The report says that focusing only on supply targets for biofuels offers no direct incentive to invest in systems that would actually deliver low greenhouse gas biofuels and wider environmental, social and economic benefits.

“There’s a tremendous opportunity for biofuels. But we’ve really got to work more on rewarding the production and use of fuels that take into account potential damage to the environment and the creation of greenhouse gasses,” said John Pickett from Rothamsted Research, the chairman of the working group that produced the academy’s report.

“It’s very important when we consider biofuels that we look from the beginning of their production right until they go into the vehicle what the impacts are of the various processes involved. It’s a very complicated situation.”

Last September, a study by Paul Crutzen, a winner of the Nobel Prize in chemistry, said farm fertilizer was responsible for three to five times more greenhouse gas emissions than previously thought because it releases nitrous oxide. The study said fuels derived from rapeseed could produce up to 70 percent more greenhouse gases than regular diesel, those derived from sugar cane produced between 50 percent and 90 percent of greenhouse gases from gasoline, while those from corn range between 90 percent and 150 percent.

Then there is the effect of biofuels on food prices. As biofuels are produced from the starch, sugar and oil from crops such as wheat, corn, sugar cane, palm oil and rapeseed, any major switch to biofuels from such crops would create a direct competition with their use for food and animal feed and lead to price increases.

The week before the commission’s report, the environmental audit committee in Britain’s House of Commons called for a moratorium on biofuel targets, saying it was worried about the effect of changing land use and that biofuels may emit more greenhouse gases than fossil fuels.

“Warnings about the negative social, environmental and climate impact that this technology could have are getting louder,” said Tony Juniper, director of the advocacy group Friends of the Earth. “And some biofuels cause more climate damage than the fuels they replace. We must not rush ahead with biofuels until we can be sure that they don’t create more problems than they solve.”

Effects on production abroad
Even as some biofuel producers complained that the new European requirements amounted to protectionist trade barriers, the commission said its intention was not to limit biofuel production only to Europe. “It is both likely and desirable that these [biofuels] needs will in fact be met through a combination of domestic E.U. production and imports from third countries,” the commission wrote in its report.

The draft E.U. rules are expected to have the biggest effect on growers of palm oil in Malaysia and Indonesia.

Indonesia produced 700,000 metric tons of biodiesel using palm oil last year, and output is expected to nearly double this year. It has also been the site of recent large street protests against an increase in food prices triggered by biofuel production, as soybean oil prices skyrocketed to record highs in January as a result of U.S. soybean farmers choosing to grow more profitable corn to supply the biofuel industry.

Some European countries have already taken measures to ensure biofuels are more environmentally friendly. The Netherlands, worried about the destruction of peatforests for palm oil cultivation, stopped subsidies for palm-based biofuel until global producers meet its environmental requirements.

It said it may take two years for the world’s biggest palm-oil producers to comply if they don’t want to miss out on Dutch “green energy” subsidies that will rise from €10 million this year to €336 million by 2014. Germany and non-E.U. member Switzerland are also planning legislation to allow only biofuels certified as environmentally sustainable to count toward their own annual renewable energy targets or subsidies.

To calculate if a biofuel meets the 35 percent requirement for saving greenhouse-gas emissions, the European Commission published a list of default values for common biofuels production pathways.

The commission assigned a default greenhouse emission saving of 49 percent to corn ethanol — the main feedstock for U.S. biofuels — but only if it is produced with natural gas as process fuel in a combined heat and power plant. More than 1 million metric tons of biodiesel were exported from the United States to Europe last year, a more than 10-fold increase from 2006, as U.S. production nearly doubled in that timeframe.

Rapeseed biodiesel got a default saving of 36 percent, while palm oil biodiesel without a specified process got 16 percent. If the process does not result in methane emissions at the oil mill, palm oil biodiesel gets a default saving of 51 percent in the commission’s table.