As the proposed ILUC [indirect land-use change] directive moves toward second reading in the European Parliament, there is much discussion in Brussels about the need for the EU to promote wood-based liquid biofuels. The premise itself seems solid – when using sustainably managed biomass from certified forests, advanced biofuels can reduce greenhouse gas emissions when compared to fossil fuels. In theory, use of biomass for such purposes could contribute to fight climate change and to energy security, and underpin Europe’s move to a true bio-economy. The critical question from a policy perspective, however, is how can we ensure the sustainability of wood-based biofuels?
The renewable energy directive sets out Europe’s initial efforts at establishing sustainability criteria to ensure that incentives are properly founded. As biofuel developments encroach upon the security of food and feedstock supply, however, we now recognise that not all biofuels are equal. The controversial ILUC proposal seeks to ensure that food and feedstocks are protected and that incentives for biofuels promote only those feedstocks that are sustainably produced.
Forest biomass is already the most important source of renewable energy in Europe, accounting for approximately 50% of its renewables consumption. With higher 2030 targets, pressures on forests can only be expected to increase. It is therefore particularly important that we use our forests and biomass resources wisely. This means confirming that the emission reductions claimed by biofuel producers are accurate and that they fully reflect the supply chain effects of potential policies on existing users and on fossil fuel use. It also means having a proper understanding of the sourcing and availability of biomass feedstocks and the competition among industries for such valuable resources.
Annex IX of the ILUC proposal sets out waste and residue feedstocks that would be subject to multiple counting. There has been significant lobbying from the biofuels industry to treat all wood and woody biomass as the same feedstock and to incentivise its use for biofuels. But forests produce the feedstocks for many industries in Europe that sustain jobs and growth without subsidies. The EU forest strategy is correct in giving priority to value added uses prior to final use as a fuel. Accordingly, we must be precise in the kinds of wood and woody biomass from our forests that we incentive for biofuel use. The term “sustainable” must entail a holistic view, including reduced emissions, long-term supply, and co-existence with established industries.
The biofuel industry’s efforts to include 'tall oil' in Annex IX do not meet these sustainability criteria. In the first instance, tall oil is not a “residue” as claimed by some who wish to incentivise its fuel use. While it derives from the wood-pulping process, it is a 'co-product' because it requires further processing, including capital investment in different equipment, to produce. Because it depends on the pulp making process, it is by definition a constrained resource; worldwide we are already seeing the effects of higher prices due to supply constraints. Moreover, tall oil is the critical feedstock for the pine chemicals industry used in multiple applications essential to our daily lives. If tall oil was diverted for biofuel use, today’s products based on tall oil would have to be sourced from fossil fuel or vegetable oil substitutes that, on a net basis, would increase emissions. This is in fact the definition of a harmful subsidy.
The second reading debate on ILUC will certainly feature much discussion on the cap on first-generation fuels and the sub-target for advanced biofuels. While these issues are important, there are other issues of principle which are of equal importance to Europe and its future bio-economy, such as following a fact based and scientific approach and promoting biomass commercial uses with higher value chains first before we incentivise final use for fuels. It is critical that the feedstocks that are ultimately listed in Annex IX do not simply reflect materials for possible biofuel use, but rather actually represent “sustainable” feedstocks for a future EU bio-economy for the long term and without market distortion.
(*) Tangui Van der Elst is director for government affairs for MeadWestvaco (MWV), which is a global packaging company that also provides specialty chemicals to the automotive, infrastructure and energy exploration industries.