Biofuel support is not free—there is a cost to fuel consumers and, as we have been reminded by renewed increases in food prices, biofuel policy also pushes up the global price of food. Addressing climate change is vitally important, and adding iLUC factors to EU biofuel policy will make sure that it delivers real benefits to justify these costs. We can’t know for sure what the exact land use impacts of biofuel expansion will be—but this study shows that we can be confident that introducing iLUC factors will make the policies more effective and will greatly reduce the risks of doing more harm than good.

—Chris Malins

The new study, published as an open access paper in the current issue of the journal Global Change Biology: Bioenergy comes amid heated international debate about the contribution of biofuels to rising food prices. (Oxfam has been particularly outspoken about this in a recently published report.) In addition, the European Commission is moving to tackle the impact of biofuels policy on land and food resources; Energy and Climate Commissioners are set to propose a 5% cap on crop-based biofuels.

Feedstock needed for expanded biofuel production that is either not taken from other end users or generated through yield increase must be produced by expanding the area of agricultural cultivation, Malins notes. This requires land use change.

• Direct land use change (dLUC) occurs whenever an identifiable parcel of land that was not previously used to grow a given biofuel feedstock crop is reassigned for the cultivation of that crop, with feedstock grown on this land supplied to a specific biofuel processing facility. An example of this is clearing a forest area to grow sugarcane for ethanol.

• Indirect land use change (iLUC), in contrast, refers to the set of land use changes that would not have happened without a marginal increase in feedstock demand. The categorization of dLUC requires knowledge about which cultivated areas are supplying which feedstock processing facilities, and depending on circumstance anywhere from 0–100% of the feedstock for a given bio- fuel mandate could be associated with dLUC. The answer to this question could be observed, but would not be readily susceptible to modeling. On the other hand, some quantity of iLUC will be an inevitable con- sequence of expanded biofuel demand. iLUC is not readily susceptible to measurement, but the likely outcomes can be modelled; however, it is widely acknowledged that there is substantial uncertainty around iLUC emissions.

While iLUC is already included in US legislation (the Federal Renewable Fuel Standard and California Low Carbon Fuel Standard), there is no regulatory framework to address iLUC in Europe. There, both the Renewable Energy Directive and the Fuel Quality Directive call upon the European Commission to “develop a concrete methodology to minimize greenhouse gas emissions caused by indirect land use changes.” They further call upon the Commission to “analyse, on the basis of best available scientific evidence, in particular, the inclusion of a factor for indirect land use changes in the calculation of greenhouse gas emissions, and the need to incentivize sustainable biofuels which minimize the impact of land use change and improve biofuel sustainability with respect to indirect land use change.”

The European Commission has proposed for consultation four different approaches to the iLUC problem, Malins notes: monitor the situation, but do nothing yet; reduce the maximum threshold for the direct emissions caused by biofuels production; apply additional sustainability criteria to some or all biofuels; or accounting for iLUC in the greenhouse gas (GHG) assessment of biofuels.

It is widely expected that should the EU adopt the approach of applying iLUC factors in biofuels policy, those factors would be based on iLUC modeling using the International Food Policy Research Institute’s (IFPRI) MIRAGE model.

In his study, Dr. Malins took the iLUC factors from IFPRI MIRAGE as his central estimate, and used Monte Carlo analysis on a simple model of potential biofuel pathways for Europe to assess the likely average carbon saving from three possible European biofuel policy scenarios: no iLUC factor, with a 50% carbon saving threshold; no iLUC factor, with the carbon savings threshold raised to 65%; and iLUC factors with a carbon savings threshold of 50%. For each policy scenario, he ran 1,000 trials.

• No iLUC, 50% threshold. With no iLUC factor (at 50% threshold), all feedstocks listed in the Renewable Energy Directive represent viable compliance pathways. Emissions are increased compared to the fossil fuel comparator in 39% of trials. The mean carbon saving across all 1000 trials for the policy as a whole is 4%, with a median carbon saving of 8%, reflecting the long right hand tail on the distribution for possible iLUC emissions. The standard deviation in the modelled carbon savings was 26%.

  However, the reportable carbon savings for the policy in this case would be 55%—i.e., it would be expected that the success of the policy would be overstated by more than 50 percentage points (reporting savings 13 times higher than the real policy savings) if the carbon emissions were reported with no accounting for indirect land use change. In this policy scenario, the use of biodiesel would increase emissions compared to using fossil diesel.

• No iLUC, 65% threshold. With no iLUC factor and a minimum carbon saving threshold raised to 65%, all pathways are considered possible, but for corn, sugar beet and all biodiesel feedstock better-than-typical direct emissions performance would be required.

  With the raised threshold, emissions are increased in 22% of trials. The average carbon saving is improved to 19%, with a median carbon saving of 21%. The standard deviation is 26%. The reportable carbon savings would be 66%, so with a 65% carbon savings threshold it would be expected that the carbon benefits of the policy would be overstated by 48 percentage points.

  Malins suggested that raising the carbon savings threshold would make ethanol more appealing as a fuel compared to biodiesel, as it is likely to be easier to achieve the threshold savings for ethanol pathways.

• iLUC, 50% threshold. Introducing an iLUC factor “profoundly” changes the mix of feedstock available to meet the mandate, Malins found. No biodiesel feedstocks are expected to meet the threshold—71% of compliance in this scenario is through sugar-based ethanol, with the rest from grain ethanol.

  With iLUC introduced, there are no trials in which overall emissions are increased by biofuel policy. The mean carbon saving for the policy is approximately equal to the median carbon saving, 54%. In contrast to the scenario with no iLUC factors, the reportable savings are expected to match the real savings—the reportable savings value would also be 54%.

  The carbon saving per megajoule of fuel is expected to be 13 times higher in a policy including iLUC factors than in one with no iLUC factors. The standard deviation in the carbon savings from the policy is 8%, compared to 26% without iLUC factors, suggesting that iLUC factors would provide a marked reduction in the uncertainty around the effect of the policy.

In this modeling there is a 94% chance that introducing iLUC factors would improve the carbon saving per unit of energy achieved by EU biofuels policy by at least 20 percentage points, with an expected benefit of 49 percentage points, i.e. iLUC factors would be expected to be a very effective policy intervention. Adding iLUC factors would also minimize the risk of negative climate effects from European biofuels policy. This result would be highly desirable under the precautionary principle.

By restricting the supply of biofuels that have poor GHG performance, iLUC factors would also incentivize the faster introduction of innovative technologies that would allow the production of biofuels from feedstock with minimal iLUC impacts, such as residual cellulosic material or algae. In contrast, raising the minimum carbon savings threshold would be likely to provide some limited carbon benefits, but would not prevent a substantial likelihood that EU biofuel use could increase net biofuel emissions, nor address the expected disconnect between reportable and actualized carbon emissions.

—Malins (2012)

Resources

• Malins, C. (2012), A model-based quantitative assessment of the carbon benefits of introducing iLUC factors in the European Renewable Energy Directive. GCB Bioenergy. doi: 10.1111/j.1757-1707.2012.01207.x

• The Hunger Grains. Oxfam briefing paper 161.