14 Renewable energy: use of biofuels
in transport
| (34342)
15189/12
COM(12) 595
| Draft Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and amending Directive 2009/28/EC on the promotion of the use of energy from renewable sources
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| Legal base | Articles 114 and 192 TFEU; co-decision; QMV
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| Department | Transport
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| Basis of consideration
| Minister's letters of 7 May, 21 November and 3 December 2013
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| Previous Committee Report
| HC 86-xxi (2012-13) chapter 8 (28 November 2012)
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| Discussion in Council
| See para 14.10 below |
| Committee's assessment
| Politically important |
| Committee's decision
| Cleared |
Background
14.1 The encouragement of renewable energy is an
increasingly important part of the EU's attempts to reduce greenhouse
gas emissions, and the Renewable Energy Directive (2009/28/EC)
requires Member States to increase the amount of energy which
comes from renewable sources to 15% by 2020 (including a sub-target
of 10% for energy used in transport). That Directive is closely
linked to the Fuel Quality Directive (98/70/EC), which requires
suppliers of fuels/energy used in road transport and non-road
mobile machinery to reduce by 2020 the lifecycle greenhouse gas
(GHG) emissions of their fuel by 6%.
14.2 The Commission says that the requirements of
both Directives are likely to be met predominantly through the
blending of biofuels, and they each set out sustainability criteria
for both biofuels and bioliquids, which establish minimum lifecycle
GHG savings, and also aim to prevent biofuels from being cultivated
on land with high carbon stock or high biodiversity. However,
although the methodology required by the Directives for calculating
the GHG emissions from biofuel production include those from direct
land use change where grassland is used to cultivate the biofuel
feedstock, there is at present no provision for Indirect Land
Use Change (ILUC), when production of biofuels results in the
displacement of agricultural production on to previously uncultivated
land.
14.3 As we noted in our Report of 28 November 2012,
the current document aims to minimise the impact of ILUC by introducing:
· a 5% cap on the amount
of food crop derived biofuels which can contribute to the 10%
transport target in the Renewable Energy Directive;
· quadruple counting
for the contribution of certain advanced and other non-crop biofuels
to the target in the Directive;
· a minimum GHG saving
for new installations of 60% in both the Directives from July
2014; and
· a requirement for
the GHG emissions from ILUC to be reported in relation to both
Directives.
14.4 We also noted that the UK has repeatedly pressed
the Commission to come forward with action to address ILUC in
the two Directives, so as to ensure that all the GHG impacts of
biofuel use are taken into account when setting biofuels policy,
and its position has been that, in contrast to the approach in
this proposal, the most appropriate way to address ILUC is through
the introduction of 'ILUC factors' (GHG penalties applied to the
lifecycle analysis of a biofuels GHG performance), alongside incentives
for biofuels with lower ILUC risk. The Government was therefore
considering its response to the proposal, including its effectiveness
in achieving GHG emission reductions and in ensuring the sustainability
of biofuels supplied in the EU; the coherence of the two Directives,
and their respective targets for renewable energy; and the proposal's
overall impact on UK business and consumers and on economic growth.
14.5 We commented that, although this was a somewhat
technical subject, the treatment of the emissions related to indirect
land use change could have significant implications in terms of
assessing the environmental case for the use of biofuels, and,
for that reason, we were drawing it to the attention of the House.
However, we noted that the Government was still considering its
response, and we therefore decided to hold the document under
scrutiny, pending a further indication of its views.
Subsequent developments
14.6 Since then, we have received a number of updates
from successive Ministers. The first, on 7 May 2013, included
an essentially qualitative checklist of the impact on various
affected groups; re-stated the UK's preference for the use of
so-called 'ILUC factors'; and indicated that there had been a
wide range of views expressed at the orientation debates in the
Energy and Environment Councils in early 2013, with the majority
of Member States appearing to support a less robust approach to
that advocated by the UK. We were also told that the proposal
was being considered in a number of European Parliament committees.
14.7 We next received a letter of 21 November from
the present Minister of State at the Department for Transport
(Baroness Kramer) indicating that, although the UK continued to
favour an approach based on "ILUC factors", the Lithuanian
Presidency had, in the light of the further discussions within
the Council and the European Parliament, recently proposed:
· a 7% cap in the Renewable
Energy Directive on biofuels derived from food crops;
· an optional advanced
biofuel sub-target (with all listed feedstocks double counted,
but used cooking oil and tallow being excluded); and
· an extension of multiple
counting of advanced biofuels to include the overall target in
the Renewable Energy Directive, as well as the transport sub-target.
14.8 She added that the dossier was on the agenda
for the Energy Council on 12 December, when the Presidency hoped
to obtain a political agreement, and that it was also expected
to be discussed at the Environment Council the following day.
14.9 We have now received a further letter of 3 December
2013 from the Minister, which confirms that the Presidency will
be seeking political agreement on 12 December, along the lines
she had indicated. As regards the two main elements, she says
that the UK has argued that any cap on biofuels made from food
crops should be set at a low level (with 5% being appropriate),
and that 'ILUC factors' should be included when the emissions
savings of biofuels are accounted for. However, the majority
of Member States do not want a low cap (or any cap in some cases),
and, whilst she will continue to push for 5%, she thinks that
7% may represent the lowest figure it is possible to achieve,
with a risk that the alternative could mean no restriction at
all.
14.10 The Minister also says that the Government
supports the development of additional incentives for the most
sustainable biofuels made from wastes and residues, but was concerned
that the original proposal sought to do this in a way which would
have significantly increased costs to the UK across transport,
heat and power, in that it counted biofuels made from certain
feedstocks multiple times towards the 10% transport target in
the Renewable Energy Directive, but not the overall target, thus
requiring additional renewable electricity and heat to be supplied
to make up the gap in the latter case. She notes that, under
the latest proposed text from the Presidency, the most advanced
feedstocks will count twice towards both the transport and overall
targets, meaning that these biofuels can be supported cost-effectively.
14.11 The Minister adds that, although there have
been two more official level meetings, the Presidency has resisted
making any further significant changes, and she expects the package
currently on the table to be presented at Energy Council on the
12 December. She also says that, whilst this is not as ambitious
as she had hoped, it offers significant environmental and cost
benefits over the current situation, as well as the significant
cost increases which would have been imposed by the Commission's
original proposal. Consequently, she would, on balance, like
to be in a position to support the package when it is put before
Council.
Conclusion
14.12 We are grateful to the Minister for these
updates, and, in the light of the information she has provided,
we are content to clear this document.
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