GCB Bioenergy paper: European biofuel policy will fail to deliver unless ‘iLUC factors’ are added

A new ICCT study, in the journal ‘Global Change Biology: Bioenergy’, shows that without modification the existing EU biofuels mandate is likely to fail in its goal of reducing CO2 emissions from transport, and could increase emissions. The paper, “A model-based quantitative assessment of the carbon benefits of introducing iLUC factors in the European Renewable Energy Directive”, undertakes ‘Monte Carlo analysis’ to investigate the possible outcomes of including iLUC factors in the RED. It concludes that based on the available evidence we can rationally expect iLUC factors to be an effective policy intervention.

The paper recognises that there are uncertainties in the analysis of indirect land use change but argues that it is still possible to identify the “best available scientific evidence” (as demanded by the Renewable Energy Directive), and that this evidence can inform policy. Assessing IFPRI’s MIRAGE model by looking at how it handles six key factors that drive land use change (co-products; reduced food consumption; yield changes; crop switching; responsiveness of area to price; and land use change emissions factors), it is concluded that the work by Laborde (2011) is consistent with best practice in general equilibrium modelling. The study then uses these iLUC factors as inputs to a simple model of the European biofuel market, and calculates the carbon savings that would be delivered by a given fuel mix. The uncertainty in the numbers is included by modelling 1000 scenarios for the possible ‘real’ carbon emissions from iLUC based on uncertainty distributions around the IFPRI estimates. 

Without iLUC factors, the expected carbon saving (the average over all thousand trials) from expanding the use of crop-based biofuels was only 4% compared to fossil fuel, and the study found a 30% chance that the policy would actually increase rather than reduce European emissions (see Figure 1). The study finds that, “Biodiesel from non-waste vegetable oil is likely to have a worse carbon footprint than fossil diesel.”

Including iLUC factors improves the picture markedly, giving increasing the expected carbon saving from 4 per cent to 54 per cent.

The findings come amid renewed discussion of iLUC in Europe, and a leaked draft proposal to include iLUC factors in European legislation, and have been reported by a number of media outlets. The initial report on the leaked proposal from Reuters is available here:

http://www.reuters.com/article/2012/09/10/us-eu-biofuels-idUSBRE8890SJ20120910

and a few of the other articles reporting on our study are listed below:

Guardian: http://www.guardian.co.uk/environment/2012/sep/21/biodiesel-industry-eu-policy-changes

Green Car Congress: http://www.greencarcongress.com/2012/09/malins-20120918.html

environmentalresearchweb blog: http://environmentalresearchweb.org/blog/2012/10/biofuel-policies-navigate-betw.html

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