The use of fossil fuels for energy and transportation is a major cause of climate change. Biofuels are being used as a replacement, as one of the solutions to abate climate change. The EU and the US must be commended for leading the world in using biofuels for transportation. Both have clearly specified policies, with the Renewable Fuel Standard established in 2005 by the US and the Renewable Energy Directive (RED) set up in 2009 by the EU. Currently, the RED is undergoing revision as RED II.

The cultivation of crops for food, animal feed and biofuels needs land. This leads to land-use change, which can be classified as Direct Land-use Change (DLUC) and Indirect land-use Change (ILUC). Both result in either a gain or a loss of carbon stock and greenhouse gas (GHG) emissions, which have effects on climate change and must be accounted for.

At present, biofuels are mainly derived from vegetable oils which are traditionally used for food and animal feed. Some examples are rapeseed, palm oil and soybean oil. When these sources are channelled toward producing biofuels, a shortage for food or animal feed is created. A series of complex crop substitution and land displacement takes place, resulting in ILUC.

According to the RED, ILUC occurs when cropland is used for biofuels feedstock production, thereby forcing food, feed and materials to be produced on new cropland elsewhere. It may happen near or far away from the place of origin. This is unlike DLUC, when new cropland is created for production of biofuels feedstock. It can be observed and can be accounted for in Life Cycle Assessment.

The problem with ILUC is that it cannot be similarly directly observed and measured, thus leading to great uncertainty over whether a particular land-use change is absolutely and without doubt an effect caused by biofuels demand. As such, econometric models are used to measure the ILUC effects. The Global Trade Analysis Project Model is used in the US, while the Computational General Equilibrium Model and Global Biosphere Management Model are used in the EU. Feedstock with high ILUC emission values will not be accepted as sustainable feedstock in the EU and US. Such reasoning sounds logical and proper.

The difficulty in implementing this rule is that ILUC emission values have been found to be extremely variable. MPOC confirmed this by conducting a study on rapeseed and palm oil biofuels using information in two recent European Commission Reports – Woltjer et al. (2017); ‘Study Report on Reporting Requirements on Biofuels and Bioliquids Stemming from the Directive (EU) 2015/1513’ and Overmars et al. (2015); ‘Estimates of Indirect Land-Use Change from Biofuels based on Historical Data’.

Based on data in Woltjer et al. (2017), ILUC values were found to be extremely variable, even within each biofuel type. ILUC emissions for rapeseed biofuels had a range from -115 to 241 g CO2/MJ, while that for palm oil varied from 20 to >400 g CO2/MJ. The average ILUC emission of rapeseed biofuels feedstock was lower than palm oil, with 65 and 83 g CO2/MJ respectively. When only studies with paired comparisons of rapeseed and palm oil were selected, rapeseed and palm oil biofuels had almost similar ILUC emissions of 87.6 and 89.6 g CO2/MJ respectively.

The results obtained from Overmars et al. (2015) showed a different picture. EU rapeseed biofuels feedstock had a higher ILUC emission than Malaysian palm oil, with values of 10.2 and 9.4 g CO2/MJ. Thus, all the three possibilities of whether rapeseed biofuels feedstock has a lower, similar or higher ILUC emission than palm oil biofuels feedstock are available. Such gross inaccuracies show that ILUC cannot be used to determine biofuels feedstock sustainability.

It has been a decade or more since the concept of ILUC was mooted. Neither the EU nor the US has come up with the threshold value to distinguish between low and high ILUC biofuels feedstock. It further shows the weakness of using ILUC for this purpose.

While the US seems to have relented on pursuing the concept of ILUC, the EU is still hot on the issue. It is urged that the EU reflects deeply on this matter. MPOC strongly feels that it is time for the ILUC concept to be put to rest. Its implementation, based on inaccurate results, will not only affect trade but will also wrongly penalise farmers who grow crops for biofuels.

Datuk Dr Kalyana Sundram,
CEO, MPOC


 

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