The idea of replacing petroleum products with alternative fuels produced from agriculture dates back to the 1973 and 1979 oil crises. But apart from the development of bioethanol from cane sugar in Brazil, the idea had not come to fruition because it was not economically viable. It was the frenzy for some kind of sustainable development in the mid-2000s, combined with a perfect storm of realities, that led to the emergence of a political interest in biofuels.
A rapid enthusiasm
In fact, it was the point at which the Kyoto agreement on climate change had to be implemented and the price of oil was rising sharply. Under pressure from the environmental movement, Mrs Merkel wanted to demonstrate some “green” credentials, and asked the European Commission to draw up a “roadmap” with a view to imposing certain renewable energies by means of financial subsidies. At the same time, France was looking for a “legal” way to subsidise its agriculture. With the same goal in mind, George W. Bush – despite being known as a supporter of the oil industry – even decided to subsidise American farmers to produce this synthetic fuel. Finally, the oil companies also wanted to be seen to be mindful of the environment; a commitment that, in any event, would not be paid for out of their own pockets, but by consumers of petroleum products. With rare speed and unanimity, the strategy was implemented.
The technology to produce synthetic fuels already exists; in short, “all” it takes for consumers to be prepared to pay the extra cost is to make them believe that it will improve the environment and change the geopolitics of the world by eliminating dependence on “Middle Eastern countries”. The European Council meeting in Göteborg on 15 and 16 June 2001 agreed on a Community strategy for sustainable development, which consisted of a series of measures including the development of biofuels. Biofuel production was becoming a reality that would change the world of energy! As a first step, Directive 2003/30/EC was limited to an indicative target, suggesting that Member States ensure that a minimum 2% of biofuels were sold on their national markets by 31 December 2005. Even before the various impacts of this directive could be assessed, the European Council of March 2007 invited the Commission to propose a comprehensive directive on the use of all renewable energy sources including all biofuels that fulfilled the criteria for sustainability. It was decided to make the consumption of biofuels mandatory in a directive negotiated by Nicolas Sarkozy during the French Presidency of the Council of the European Union in the second half of 2008. Directive 2009/28 set the share of renewable energies in the total EU final energy demand at 20% and the minimum share of energy from renewable sources for transport energy consumption at 10% in each Member State by 2020.
The not so “green” fuel.
The only people who opposed this decision were the environmentalists. They considered that in the beautiful fruit basket of renewable energies, the biofuels were the rotten apples because the impact on CO2 emissions would not be as positive as it was being made out to be. The negotiations were tough, so the directive provided, for example, that, to be eligible, biofuels would have to reduce CO2 emissions compared to petroleum products by at least 35% at the time of implementation of the directive, and 50% and 60% respectively for production facilities to be built in 2017 and 2018. The facts proved the ecologists right, because it was soon realized that the environmental benefits of biofuels were not as expected. The main reason for this is the destruction of land with rich biological diversity, known in the jargon as “Indirect Land Use Change” or ILUC. Now, the directive claimed that these finite resources, whose value for all humanity is recognised in several international texts, should be preserved, even going so far as to say that consumers would find it morally unacceptable that the increased use of biofuels would have the effect of destroying land rich in biological diversity.
So sustainability criteria were defined, particularly for primary forest, according to the definition used by the UN Food and Agriculture Organization (FAO). The 2009 European text stated that “If land with high stocks of carbon in its soil or vegetation is converted for the cultivation of raw materials for biofuels or bioliquids, some of the stored carbon will generally be released into the atmosphere, leading to the formation of carbon dioxide. The resulting negative greenhouse gas impact can offset the positive greenhouse gas impact of the biofuels or bioliquids” The Directive also stated “Having regard, furthermore, to the highly biodiverse nature of certain grasslands, both temperate and tropical, including highly biodiverse savannahs, steppes, scrublands and prairies, biofuels made from raw materials originating in such lands should not qualify for the incentives provided for by this Directive.”
A strategy becomes a ﬁasco?
Of course, in the end, it was the subsidies that were at stake. Since the production of biofuels makes no economic sense, their consumption was justified by the integration of external costs, which no one is able to calculate, generated by pollution resulting from the use of petroleum products. The Directive provided that Member States may – “must”, in fact, because otherwise no one would do it – define “aid schemes”, i.e. grant subsidies to European biofuel distributors and producers. The environmentalists won their case. As a first step, the Directive was slightly amended (Directive 2015/1513), replacing the minimum of 10% by a maximum of 7% of “first generation” biofuels in final energy consumption for transport. In order to promote the use of second-generation biofuels, it proposed a non-binding indicative sub-target of 0.5% advanced biofuels by 2020. But more recently, in 2018, a new directive was adopted (not yet published in the Official Journal at the time of writing) noting the decline in enthusiasm for these solutions which do not have environmental benefits. Biofuels and second-generation biogas should account for at least 0.2% of the share of biofuels used by 2022, 1% by 2025 and 3.5% by 2030.
More importantly, biofuels, bioliquids and biomass fuels used in the transport sector, produced from human and animal food crops, can only represent one percentage point more than the consumption of these same fuels in 2020 with a maximum threshold of 7%. Member States that have already made significant commitments to biofuel production will therefore be able to produce another 1% more, while remaining below 7%. But the most obvious message is that there is no longer a minimum requirement for fuels produced from food products. Not only are biofuels bad for the environment and not just because of CO2 emissions, but the price of oil has meanwhile been realigned by factors totally unrelated to this deceptive scenario[i]. While never stated openly, the obligation to produce biofuels from food crops is a real fiasco. When politicians say that their decisions should be technologically neutral, they would be well advised to follow their own suggestions. In the energy domain, the effects of political decisions may only reveal their results years later, almost always with unfortunate consequences for the economy and even for geopolitics.
[i] On this subject, read the author’s latest book, “The Changing World of Energy and the Geopolitical Challenges” (see furfari. wordpress.com)
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