Updated evidence on ‘high indirect land-use change risk’ biofuel feedstock

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Between 2020 and 2024 Cerulogy supported Guidehouse, GRAS and IIASA in updating the evidence base on the deforestation associated with biofuel feedstock crops, as  an input to the European Commission’s assessment of which biofuel crops pose a high indirect land-use change (ILUC) risk. The work includes new satellite data analysis demonstrating the continued linkage between some biofuel crops and deforestation – notably oil palm in Southeast Asia and soybeans in South America.

This technical analysis has informed a proposal by the Commission to update the EU’s list of high ILUC-risk feedstocks to include soybeans.

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Read the proposal and respond to the consultation

Diverted harvest: Environmental Risk from Growth in International Biofuel Demand

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In this report for Transport and Environment, we describe the biofuel policy frameworks and targets of the nine leading global producers and consumers: the USA, Brazil, the EU+UK, Indonesia, China, India, Argentina, Canada, and Thailand. The report links these countries’ biofuel feedstock demand to ecological risks, to the carbon opportunity cost of using extra land for agriculture, and to the greenhouse gas implications of relying on biofuels to displace fossil fuels.

We calculate that about 32 Mha of cropland is currently devoted to biofuel feedstock production after accounting for co-product allocation. The benefit of this, as conventionally calculated (i.e. ignoring ILUC), is a 233 MtCO2e/year emissions saving compared to an equivalent amount of fossil fuels. But returning this land to its natural state — and replenishing its above- and below-ground carbon — could provide a much larger carbon sink of 428 MtCO2e/year. While rewilding of agricultural land on this scale is not currently plausible, these numbers underscore the importance of thinking about land use in ways that aren’t readily captured by conventional lifecycle analysis.

Under present policy targets, biofuel consumption in the nine study countries is set to increase from 104 Mtoe in 2023 to 150 Mtoe in 2030. Given existing and future feedstock slates, and constraints on advanced and residual feedstock supply, we conclude that over 90% of this is likely to come from crops: that means an extra 20 Mha devoted to biofuels worldwide. Accounting for the range of crops grown in each country, we calculate that if ILUC is taken into account, biofuel policy in 2030 will increase emissions from transport fuels by 34 MtCO2e/year compared to 2023.

The EU+UK and Thailand are found to have adopted policies that are reducing biofuel-associated emissions down over time. The USA, India, and Indonesia, by contrast, are expected to expand use of high-ILUC palm and soybean oils, and so their biofuel policies are likely to be harming rather than benefitting the climate.

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Deforestation risk from Nordic alternative fuel policy

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A report for Rainforest Foundation Norway

This report examines the climate and environmental risks associated with biofuel policies in Sweden, Finland, and Norway. While these countries are often recognised as climate leaders, their support for certain biofuel feedstocks, including palm derivatives, used cooking oil, and animal fats, raises concerns about indirect land use change, deforestation, and peatland degradation. The findings suggest that without further safeguards, Nordic biofuel demand could drive deforestation and peat loss amounting to tens of thousands of hectares annually by 2030.

Finland consumes particularly high volumes of PFAD – palm fatty acid distillates – in its biofuel sector. PFAD is a valuable by-product of palm oil refining, and is linked to the expansion of oil palm plantations in Southeast Asia. Sweden and Norway have taken steps to exclude PFAD, but continue to rely heavily on residual oils, which come with their own environmental challenges. In all three countries, current policy frameworks do not fully account for indirect emissions or the global displacement effects of feedstock use.

This report provides country-specific recommendations to align Nordic biofuel policy with climate and biodiversity goals, including capping high-risk feedstocks, supporting the development of advanced alternatives, and accelerating transport electrification. The analysis underscores the importance of embedding strong environmental safeguards in biofuel policy to ensure that efforts to decarbonise transport do not undermine broader sustainability objectives.

Download the report from the Rainforest Foundation Norway website
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‘Low ILUC-Risk’ as a Sustainability Standard for Biofuels in the EU

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Indirect land use change (ILUC) can add significantly to biofuels’ carbon footprint, and the EU has implemented measures to limit ILUC arising from its energy policy. The paper argues that ‘low ILUC-risk’ certification could be positioned as a gold standard of biofuel sustainability, as it minimises biofuels’ impacts on food markets and on ILUC, and offers possible co-benefits through the adoption of more sustainable farming practices.

In the paper we develop policy-focussed recommendations for the low ILUC-risk framework — these are intended to boost its attractiveness and applicability to feedstock producers around the EU and beyond, and strengthen its environmental safeguards.

For instance, we discuss how the crediting methodology could manage seasonal variability in on-farm yields; the connection between low ILUC-risk and the EU Renewable Energy Directive’s ‘Annex IX’; provisions to facilitate the certification process; and more…

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Low ILUC pilots and guidance

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The final deliverables from Cerulogy’s work with Guidehouse on low ILUC-risk biofuels for the European Commission has now been published. The published documents include reports from five low ILUC-risk pilot audits, certification guidance and a discursive report.

Low ILUC-risk documents

 

High and low ILUC risk – technical assistance to the European Commission

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Since 2020, Cerulogy has been working for the European Commission Directorate General for Energy, as part of a consortium led by Guidehouse, on a re-assessment of which biofuel feedstocks should be identified as high indirect land use change risk under the EU’s Renewable Energy Directive and on the development of certification guidelines for low indirect land land use change risk biofuel projects.

Low ILUC-risk report
High ILUC-risk report
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BIKE biofuels

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BIKE is a multi-year project funded by the EU’s Horizon 2020 programme. Its aim is to assess the market potential of the EU’s low ILUC-risk concept – from practical, regulatory, and economic standpoints. The BIKE consortium includes expertise from academia, industry, international agencies, and the private sector.

Cerulogy has a leadership role in BIKE’s policy-oriented work package. Members of this work package have produced thirteen briefing notes in collaboration with the rest of the consortium, which examine different aspects of EU biofuels-related policy. These cover issues such as the integration of biofuels policy with agro-ecological safeguards, funding provisions for novel farming techniques, the emerging framework surrounding land-based carbon removals, and the use of terminology in the EU’s Renewable Energy Directive.

The briefing notes are all available from the BIKE website.

Go to BIKE website
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Challenges and Recommendations for Improved Identification of Low ILUC-Risk Agricultural Biomass

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The “low indirect land use change risk” (“low ILUC-risk”) concept was developed to assess whether a given batch of crop-based biofuels competes with other land uses and is likely to stimulate the expansion of agricultural land. At the core of low ILUC-risk is an “additionality principle” that aims to ensure that special policy treatment is only given to biofuel feedstocks that are produced over and above the business-as-usual baseline.
This paper developed as part of the BIKE project tests the European Commission’s methodology for calculating the baseline by applying it to publicly available Eurostat data at national and NUTS2 scales. Statistical and regional variation in yield trends leads to differences in the long-term outcomes of the methodology, which could end up incentivising the diversion of crops into the biofuel sector.
We introduce the terms “tailwind additionality”, “headwind additionality”, and “additionality ratchet” to characterise the phenomena which contribute to this outcome. These form a basis for technical recommendations to improve the methodology and, we hope, enhance both the attractiveness and the robustness of the low ILUC-risk framework.
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Considerations for addressing indirect land use change in Danish biofuel regulation

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This report for the Danish Energy Agency presents an overview and review of indirect land use change modelling, and provides a discussion of options for Denmark to adjust its biofuel policy to take further account of indirect land use change emissions.

Download report from Energistyrelsen website

Soy, land use change and ILUC-risk

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In its assessment of which biofuel feedstocks should be considered ‘high ILUC-risk’, the European Commission found that soy oil was associated with second highest deforestation risk of the biofuel feedstocks considered, but that the level of deforestation identified fell below the threshold for high ILUC-risk designation. This study for Transport and Environment reviews the relationship between soy and deforestation, with a focus on South America.

Download report (external link)