MEPs vote for palm oil ban, caps on crop-based biofuels

EU lawmakers have backed proposals to ban palm oil based biofuels from being used as part of the bloc’s renewable energy targets after 2021, and voted for a cap on additional capacity in crop-based biofuels.

In a January 17 vote in the EU Parliament plenary, MEPs backed the main compromise amendments brokered last week by the three main political groupings in the EU legislature.

However, ministers from each country, as well as officials from the European Commission, will need to agree before the bill becomes law.

The amendment to proposals on biofuels in the recast of the EU’s Renewable Energy Directive tries to strike a balance between the demands of the EU biofuels industry on one hand, and on the other address the environmental impact of crop-based biofuels.

Bioethanol lobby group ePURE said the vote to phase out palm oil and allow some crop-based biofuels “is a welcome recognition that the EU needs all the sustainable tools it can get in the fight against climate change”.

Their counterparts in the European Biodiesel Board (EBB) failed to reference the vote on palm oil, which environmental groups said reflected the nature of the EBB’s membership, which includes Italy’s Eni and France’s Total who use palm oil as a feedstock in hydrotreated vegetable oil (HVO).

Hinder

Both ePURE and the EBB expressed concerns that proposals to cap crop-based biofuel use at 2017 levels in each member state could hinder the ability of the sector to make an enhanced contribution to a 2030 target on renewable energy use.

The European Parliament this week said that should be 35% of overall energy consumption.

“This approach does not support the EU agriculture & protein sectors nor respond to COP21 climate ambitions. Going forward into trialogues, maintaining the 7% share for crop-based biofuels and including them in the incorporation obligation is therefore vital,” said Rafaello Garofalo, secretary general of the EBB in joint statement with the EBB, Fediol and the European Oilseed Alliance.

They added that the Parliament’s vote to approve a 12% renewables binding target for biofuels “is also a step in the right direction”, but noted that it was less than the 14% target agreed by the European Council in December.

If ‘trialogue’ discussions between Europe's three institutions decide to uphold the Parliament’s view that palm oil should be excluded from biofuels policies, biodiesel producers will need to find alternative feedstocks from 2021.

This would prompt huge extra demand for used cooking oil and residues, but producers of these have struggled so far to increase supply to meet the 2020 targets.

In addition, falling sales of diesel cars in the EU is a seemingly unstoppable trend that will require producers of biofuels for petrol cars to increase their share of what is required to meet overall biofuels targets.

All this at the same time that feedstocks of bioethanol from crop-based sources could be capped. 

“[EU legislation] needs a strong commitment to ramping up advanced biofuels,” ePURE said this week.

Agrarian economies

EU member states with large agrarian sectors are likely to push in trialogue for a high threshold for crop-based biofuel use.

Many of the amendments tabled in advance of this week’s vote that were supportive of first generation biofuels had the support of MEPs from countries such as France, Hungary and Poland.  

NGO observers of the EU’s biofuels policy said it is difficult to predict the extent to which the trialogue discussions will uphold the vote in this week’s plenary.

But they expressed confidence that the final legislation will exclude palm oil – blamed for being a major cause of climate change ­– despite threats of economic reprisals from producer countries Malaysia and Indonesia.

The import of palm oil for energy use is thought to have few supporters at EU Council level and the EU has already taken aim at imports of biodiesel from Indonesia, which uses palm oil as its main feedstock, through the imposition of duties from 2013.

The EU will on Monday formally withdraw its appeal to an EU court decision to annul those duties, according to EU sources.

The EU institutions during trialogue negotiations on RED II will likely distance a ban on palm oil from trade issues, pointing out an exclusion of feedstocks will be based on environmental issues alone.  

‘Crop Apartheid’

Malaysia, which along with Indonesia accounts for 85% of global palm oil production, this week accused the EU of pursuing “crop apartheid” that would impoverish hundreds of thousands of small farmers.

The price of Malaysian palm oil futures fell 1.6% between Tuesday and Thursday, which traders said reflected the EU vote. 

Figures compiled in 2015 suggested that 45% of the additives in the EU’s consumption of biodiesel are drawn from palm oil, while the EBB reckons it is more like 15%.

But the picture is less clear cut for imports of feedstocks such as soy methyl ester, which NGOs say are also major contributors to climate change. In turn, lobby groups say these commodities are much less emitting than standard diesel.

Some amendments to RED II legislation related to biofuels proposed to use life cycle emissions factors that would exclude palm oil methyl ester but allow additives derived from soy.

Energy Efficiency

While most of the attention from the European biofuels industry this week was directed at

RED II, a vote by EU lawmakers on another piece of major legislation could have consequences for combustion-engined cars and demand for bioethanol and diesel after 2021.

A large majority of MEPs voted to include the transport sector in the EU’s Energy Efficiency Directive (EED), which requires sectors to make year-on-year savings in energy use.

Carlos Calvo Ambel, a campaigner with NGO Transport & Environment, told Energy Census that if the final legislation includes transport as directed by MEPs, member states would have to take robust measures that could impact demand for fuel.

“Based on what MEPs voted for on Wednesday related to the EED, member states would have to take national measures that go beyond existing EU legislation, which could include investment in mass transit systems, scrappage schemes for old cars, a modal shift on freight,” he said.

“However, it is likely that the many member states will try and weaken these proposals during trialogue. Parliament must stay strong,” he added.