A calculated risk

Europe’s commitment to increasing the share of transport biofuels more than five-fold by 2020 is a hot issue. Typical of the new environmental agenda, it is often hard to disentangle where green issues stop and others, such as trade, poverty or farm policy, start.
The European commission is due to propose legislation towards the end of this year setting concrete proposals for the rules of the game. In the run-up, a fierce debate is pitting diverse sets of stakeholders and some very different agendas. Many of these were on show at a major conference on biofuels organised by the commission in early July.
The EU executive is setting out deliberately to strike a balance between competing interests and priorities. It acknowledges the need for some assurance that biofuels will be produced sustainably – a proposal for a sustainability certification system is due in September. It also accepts that, while there is considerable potential to increase European biofuels production, imports from developing countries will also have to rise.
European farmers will benefit through new subsidies, but with limits recognising that biofuels promotion is essentially an environmental objective. Carbon profiles will have to be taken into account, driven not least by a draft directive that would require a 10 per cent reduction in life-cycle carbon emissions of transport fuels by 2020 (see pp 18-19).
In any case, a biofuels promotion policy that failed to deliver significant greenhouse gas emission cuts would be a nonsense.
Meanwhile, research into second-generation biofuels based on cellulosic waste and the like, rather than crop-growing, is seen as a priority if more biofuels is not to also mean higher world food prices, which could especially hit the global poor.
A striking feature arising from all of this is that while these questions are becoming clearer, the answers are not. Clearly there will be a balance between domestic production and imports from countries such as Brazil, which has a huge comparative advantage in bioethanol production. But it is far from clear what this balance will be or what would be politically acceptable to different EU countries or major interest groups.
The environmental sustainability of biofuels is going to be another major battleground. After a slow start, European environmental groups are stepping up campaigns for strict standards. A clash between quality and volume seems almost inevitable.
It also remains unclear whether – even if research into second-generation biofuels progresses well – serious competition for bioresources between biofuels and other users such as food and paper manufacturers will in fact be avoided.
Some see biotechnology as having a large part to play in developing crops and processing techniques that can deliver biofuels more efficiently in future. But will the European public – overwhelmingly hostile to GMOs still – wear it?
All this means that the EU’s biofuel policy remains at this stage essentially a gamble. Every effort is being made to square the many circles, but there is no guarantee of success. Nor, it has to be pointed out, does Europe have a serious ‘plan B’ in its back pocket if its drive for biofuels runs into the sand.
The European commission and the member states are taking a calculated risk in pursuing biofuels, but it is important to recognise the scale of this risk. Europe’s 2020 greenhouse gas target could be among the first casualties if it does not win this bet.

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