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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Full steam ahead?

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Environmental impacts of expanding the supply of maritime biofuels for the International Maritime Organisation targets

The UN’s International Maritime Organisation (IMO) is in the process of evaluating proposals for binding targets aimed at decarbonising international shipping. Whatever the ultimate form of this regulation, there will likely be significant implications for the production of biofuels for shipping. Until now, these have played only a minor role in the maritime fuel mix, and there is a risk that the IMO will repeat the mistakes of past fuel policies in other sectors.

This report for Transport and Environment examines and models potential environmental consequences of such a shift, and concludes with policy recommendations for mitigating the worst impacts of biofuel feedstock consumption as well as for reducing future overall demand for maritime fuel.

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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.

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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.

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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.

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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.

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