The European Commission serves up real limits on palm biofuel

It may not be the “palm ban” the media was talking about last year, but the European Commission’s revised delegated act, released on March 13, 2019, has teeth. This measure will significantly reduce, but not eliminate, the amount of palm oil used in biofuel in the European Union (EU).

When the EU extended the Renewable Energy Directive (RED II) with a new 2030 target for biofuels and other renewable energy in transport last year, it included language capping and phasing out the contribution of high indirect land-use change (ILUC) risk biofuels towards that target. The RED II spelled out an exception for low ILUC risk biofuels that avoid impacts on agricultural commodity markets by producing feedstock on unused land or from yield increases. As my colleague blogged in December, the RED II description of low ILUC risk biofuels doesn’t necessarily reduce ILUC. Since biofuel feedstocks, especially palm oil, increase yields and expand onto unused land as a matter of course, supporting the use of that feedstock in biofuel will almost certainly displace it from its otherwise destined use in food, livestock feed, and soap…. causing ILUC.

The RED II left it up to the Commission to resolve the details regarding how to categorize feedstocks as high ILUC risk and how to determine when low ILUC risk feedstocks could get around the cap and phase out. The Commission’s first draft of its delegated act didn’t get the job done. While it clearly designated palm oil as a high ILUC risk feedstock, it allowed business-as-usual palm expansion onto unused land to qualify as low ILUC risk without any safeguards. That is one big loophole: we’ve previously estimated it could allow up to 5 million tonnes palm oil to contribute to the renewable energy targets in RED II in 2030, more than currently is used in EU biofuel, without any action taken to reduce the massive greenhouse gas emissions from palm oil ILUC. In addition, the Commission’s draft delegated act would have allowed palm oil producers to overestimate (and over-credit) the amount of feedstock produced from yield increase projects.

The Commission has now corrected those mistakes. After a period of public consultation, it revised the delegated act to tighten up these two loopholes. Producers seeking low ILUC risk certification for palm oil grown on unused land will now have to complete an additionality assessment showing that palm oil wouldn’t have expanded onto that land in a business-as-usual scenario. In other words, this palm oil won’t qualify unless producers can demonstrate it wouldn’t have been profitable without the added value from RED II support. The wording change the Commission made to achieve this result is exactly the same that we recommended in our public comments submission. We took this idea of an additionality test from the Clean Development Mechanism. It’s not perfect, but it’s a meaningful safeguard. The Commission also corrected the math on calculating yield increases, again in line with our public comments. Between these two changes, the amount of high ILUC palm oil that will make its way into European cars and trucks, and the associated environmental damage, should be substantially reduced.

However, it’s not over yet. The European Parliament must vote to approve the delegated act before it can be adopted. After that, the Commission plans to issue an implementing act with further details on how exactly low ILUC risk biofuel feedstock can be certified. The delegated act also calls for a Commission review in 2021, with a chance to amend the regulation at that time. But for now, it looks like Europe is making a significant move to reign in ILUC from the worst food-based biofuels.

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