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An important question when estimating the indirect land use change emissions from biodiesel feedstocks is whether vegetable oils replace each other in the market, so that increased demand for one may result in increased production of another. In this paper, it is shown that the evidence from trade and agricultural production data strongly suggests that demand for rapeseed biodiesel in the EU will have driven expansion of palm oil production in Indonesia and Malaysia, as predicted in IFPRI's iLUC modeling with MIRAGE (Laborde, 2011).
This study shows that without modification the existing EU biofuels mandate is unlikely to deliver significant carbon benefits. If, however, iLUC factors are included in the policy in future, the policy would be likely to achieve the targeted 50% carbon reductions.
Amendments to Europe’s FQD and RED will address indirect land use change and limit support for food-based biofuels.