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Thursday, 05 September 2013

Controversy on ILUC relevancy, ahead of Parliament vote

The impact of EU biofuels on the increase in the global food prices in the recent years has been insignificant, Dr. Harald von Witzke, Professor and Chair for International Agricultural Trade and Development at the Humboldt University of Berlin, Germany said at a conference of EU-Biofuel Policy hosted by the Representation of Bavaria to the European Union (EU) on 5 September in Brussels.
Moreover, he added that the indirect land use change (ILUC) should not be accounted for in the EU policy, given that it is a relatively young area of research, which has been not sufficiently developed. “If you attach ILUC factors to bioenergy, you should attach it to everything. To organic farming, because it is land intensive […] as well as to greening because it takes land from other forms of productive agriculture,” von Witzke said.

Indirect land use change (ILUC) factors designate the effect which appears because traditional (or first generation) biofuels are produced using feedstock which could otherwise be used for food and feed. Given that in this case the demand for food still exists and has to be fulfilled, land use change appears (by changing e.g. forest into agricultural land), which implies that a substantial amount of CO2 emissions are released into the atmosphere.
On 11 July, the European Parliament Environmental Commission proposed to account ILUC factors in the European energy policy, in order to encourage more sustainable bioefuels – that do not compete directly with food and feed crops, such as wastes and agricultural residues .

A study released on 5 September by the energy consultancy Ecofys seems to confirm the statements of Dr. von Witzke. It highlights that the impact of EU  biofuels demand until 2010 only increased world grain  prices by about 1-­‐2%. It also predicts that without any cap on cropbased, cropbasedbiofuel production may lead to another 1% increase through 2020;
In the study, Ecofys concludes that the role of biofuels remains very small. “Systemic factors, like reduced reserves, food waste, speculation, transportation issues, storage costs and problems, and hoarding play a much larger role in local food prices. These factors can be solved and should get much more attention”, the report reads.

Present at the 5 September event, an European Commission official (Joachim Balke, member of cabinet of the EU-commissioner for Energy) assured that the European Commission does not include ILUC factors as a criteria for considering subsidies for the bioefuels sector, but he suggested that they should be considered internally, in every country.

This discussion anticipates the final vote on bioefuels in the European Parliament plenary meeting, expected to take place next Wednesday (11 September) in Strasbourg. The vote on has been postponed from Monday to Wednesday, due to the complexity of the matter, Albert Dess, Spokesman of the Agricultural Committee in the European Parliament said at the conference.
The 11 September vote is on the initial European Commission policy proposal to introduce a 10% minimum quota for renewable energy sources in the transport fuel used, and to reduce by 65% the C02 emissions by 2020 in the EU. On 11 July, the European Parliament environmental committee voted that biofuels, produced from food and energy crops, must not exceed 5.5% of total energy consumption for transport purposes by 2020. The committee also proposed for  ILUC factors to be considered when subsidies are granted in support for achieving the minimum quota.  
This stand-point differs from that of the Industry and Agricultural committees, which have proposed a 6,5%, respectively a 10% quota for traditional fuels.
The industry sector, strongly represented at the event, believes that a 5,5% cap and the consideration of ILUC factors would represent a sign of insecurity for the investors, and would bring distress for the sector.

If no agreement is reached on the biofuels issue on 11 September, the Parliament is to take the proposal to a second reading. Afterwards, the trialogue between the institutions (Parliament – Commission - Council) will begin.

Source: CTA Brussels