Trade and markets
 

Detail

Area
European Union
Commodity Group
Biofuels
Commodity
Biofuels
Date
01/06/2018
Policy Category
Renewable energy
Policy Instrument
Bioenergy policy
Description
Reached a provisional, informal agreement regarding the bloc\'s renewable energy policy after 2020, comprising: i) binding overall and transportation-specific targets for renewable energy use; ii) capping the amount of crop-based biofuels in transport to 2020 levels, with a maximun of 7 percent; iii) freezing the use of biofuels that bring about strong indirect land use changes (ILUC) at 2019 levels, with a mandatory phase-out by 2030; iv) introducing binding targets for advanced biofuels; and (v) mandating the presence of waste-based biofuels.
Notes
In mid-June, the EU’s Parliament, Council and Commission reached a provisional, informal agreement regarding the bloc\'s renewable energy policy after 2020. The package, which is part of a broader policy aimed at reducing the bloc’s GHG emission levels comprises: i) binding overall and sector-specific targets for renewable energy use; ii) caps on the amount of crop-based (or ‘first generation’) biofuels in transport at 2020 levels, with a maximum of 7 percent; iii) ambitious and binding targets for ‘advanced’ biofuels; iv) significant, mandatory presence of waste-based biofuels, such as used cooking oil and animal fats; and v) a freeze on the use of biofuels that bring about strong indirect land use changes (ILUC) at 2019 levels, with a mandatory phase-out by end-2030. With regard to the latter point, the European Commission has been assigned the responsibility to develop – by February 2019 – a precise methodology to define the ‘green credentials’ of individual biofuels, so as to distinguish high-risk ILUC biofuels produced on high carbon-stock land from others produced with lower risk of causing adverse effects. While it remains to be seen how individual biofuel feedstock will be affected under the new classification, Malaysia and Indonesia stated that they would consider retaliatory measures in case palm oil-based fuel fell under the ‘high-ILUC/low sustainability’ category, adding that they consider the EU’s envisaged measures are discriminatory. Meanwhile, the two palm oil producers intensified their efforts to identify new markets for their biofuel exports. Furthermore, representatives from the EU biofuel industry questioned the rationale for restricting the contribution of those first generation biofuels that can be produced in a sustainable manner. The text of the new EU directive still has to be formally approved by the European Parliament and the Council, following which the bloc’s member states would have 18 months to transpose the directive into national law.