Glen Hodgson, a Director with Hill + Knowlton Strategies based in Brussels and Stockholm, writes about new legislation which will affect the market for biofuels in Europe and therefore create opportunities as well as threats for operators, producers and users.
What is the issue?
The European Commission proposed in October 2012 new legislation on the indirect land use change (ILUC) effect of biofuels intended to minimise the climate impact of their production. In this context, the proposed rules may lead to new classifications and subsidy streams for sources of biofuels. If adopted in its current form by the European Parliament and the EU Council, this will limit the amount of food crop-based biofuels and bioliquids that can be counted towards the EU’s 10% target for renewable energy in the transport sector by 2020 to a 5% level. This is clearly of concern for the whole industry.
The European Commission also proposes double- and quadruple-counting the contribution of some low-ILUC biofuels towards the EU’s 20% emissions reduction target for 2020, one of the aspects of the proposal which had proved controversial within the Commission prior to its publication. In general, land-using second-generation biofuels are intended to be double-counted, while non-land-using second-generation biofuels are to be quadruple-counted due to their low-ILUC factor.
Timing and next steps
The proposal has been adopted, but work in the European Parliament and Council of Ministers has not yet begun. There is therefore a great deal of scope in shaping opinions at the national and Brussels levels to protect business interests. This also opens the possibility of setting up a biofuels debate platform which would support and complement future lobbying towards the European Parliament and the EU Council around the ILUC legislative proposal. This could establish a dedicated online channel through which to directly engage targeted decision-makers, influencers and media as a transparent means to advance policy objectives and educate on key concerns. Furthermore, such a dynamic platform would also rapidly address misinformation and showcase relevant videos, while supporting targeted offline engagement and outreach activities. Clearly, the time is right and there is a need to re-energize the debate and make it more visible ahead of this year’s first-reading negotiations in the Parliament and Council.