EU consults on bioenergy sustainability policy after 2020

Recent developments

In 2009, the EU established a set of sustainability criteria for biofuels (used in transport) and bioliquids (used for electricity and heating). The European Commission (“EC”) makes it clear that only biofuels and bioliquids that comply with the criteria can receive government support or count towards national renewable energy targets.

In 2015, the EC introduced a set of sustainability rules for biofuels by virtue of Directive 2015/1513 (amending the Renewable Energy Directive 2009/28/EC (RED) and the Fuel Quality Directive 2009/30/ EC (FQD)). The transposition deadline for the sustainability rules is 10 September 2017. The sustainability rules include the following restrictions:

• The maximum allowable percentage of biofuels arising from food crops that can be counted towards Member States’ 2020 renewable energy targets is 7 %;
• Biofuels that do not encourage an additional demand on land are to be looked upon more favourably in the context of incentives towards the renewable energy targets (for instance algae, biomass from municipal or industrial waste, straw, sewage sludge and used cooking oil (so-called second generation biofuels));
• Biofuels and bioliquids produced from installations which started producing biofuels on or after the 6th October 2015 must achieve a greenhouse gas (“GHG”) emissions saving of at least 60% compared as against the fossil fuel comparator[1]. For installations that started producing biofuels before the 6th October 2015 the percentage saving must be at least 35%. This 35% target must be met before December 2017 and after December 2017 the minimum saving increases to 50%.

Key drivers of bioenergy

We would suggest that the need to update and enhance the bioenergy sustainability policy is driven by three important developments in international and European policy making, namely, (1) the 2030 Climate and Energy Framework; (2) the new EU Circular Economy Package; and (3) the new global agreement on climate change reached in Paris on 12th December 2015. The policy is designed to work alongside the EC’s forestry strategy (released September 2013), the Common Agricultural Policy 2014-2020 and GHG accounting rules for land use, land use change and forestry

(1) 2030 climate and energy framework

In its Communication COM/2014/015 dated 22 January 2014 entitled “A policy framework for climate and energy in the period from 2020 to 2030” the EC set the following key targets to be achieved by the EU by 2030:

• a 40% cut in overall EU GHG emissions compared to 1990 levels
• at least a 27% share of renewable energy consumption
• at least 27% energy savings compared with the business-as-usual scenario

In the same Communication on the 2020 to 2030 policy framework the EC also made it clear that improved biomass policy forms part of the framework and the achievement of the 2030 renewables targets: ‘an improved biomass policy will also be necessary to maximise the resource-efficient use of biomass in order to deliver robust and verifiable greenhouse gas savings and to allow for fair competition between the various uses of biomass resources in the construction sector, paper and pulp industries and biochemical and energy production. This should also encompass the sustainable use of land, the sustainable management of forests in line with the EU’s forest strategy and address indirect land-use effects as with biofuels’.

(2) EC’s Circular Economy Package

The new Circular Economy package published on 2 December 2016 (see our recent lawnow) is another important consideration. The EC acknowledges that energy from waste via thermal incineration does not sit comfortably with the principles of the Circular Economy but nonetheless incineration with energy recovery is preferable to landfill. Therefore the EC has promised to look further into this:

"When waste cannot be prevented or recycled, recovering its energy content is in most cases preferable to landfilling it, in both environmental and economic terms. ‘Waste to energy’ can therefore play a role and create synergies with EU energy and climate policy, but guided by the principles of the EU waste hierarchy. The [European] Commission will examine how this role can be optimised, without compromising the achievement of higher reuse and recycling rates, and how the corresponding energy potential can best be exploited. To that end, the [European] Commission will adopt a 'waste to energy' initiative in the framework of the Energy Union”. (EC Communication “Closing the Loop – An EU Action Plan for the Circular Economy” COM/2015/0614 final, Page 10)

(3) The climate change agreement

The climate change agreement reached in Paris on 12 December 2015 (the “Agreement”) was a significant political and diplomatic achievement by 195 countries. The Agreement’s overall objective to put the world on track to avoid dangerous climate change by limiting global warming to well below 2°C. The agreement is due to enter into force in 2020 (see our recent lawnow). Clearly bioenergy may be an important tool in combatting climate change but by the same token the agreement warns of the need to avoid harm to agriculture and forestry in addressing climate change, and thus this is something that the bioenergy sector will need to bear in mind.

Consultation

It is within the aforementioned international and European setting that the EC now looks to develop a more robust bioenergy sustainability policy.

The consultation seeks views on the following aspects:

1. Which role should bioenergy continue to play in the renewable energy mix: “dominant” role, “important” role or nor role at all in view of the EU’s 2030 climate and energy objectives.
2. Whether certain types of bioenergy should be promoted or discouraged (e.g. biofuels from food crops; biofuels from energy crops; biofuels and biogases from waste)
3. Consultees are asked to rate the importance of bioenergy in terms of its benefits and opportunities. Amongst the key benefits listed are Europe’s energy security, grid balancing including through storage of biomass; reduction of GHG emissions; environmental benefits (including biodiversity), resource efficiency and waste management, R&D boost in bio-based industries, competitiveness of European industry, growth and jobs including in rural areas and sustainable development in developing countries.
4. Consultees are asked also to rate the risks that have been identified by certain scientific studies in relation to bioenergy production and use such as change in carbon stock due to deforestation and other direct land-use change in the EU and non-EU countries, indirect land-use change impacts, GHG emissions from supply chain (cultivation processing and transport), GHG emissions from combustion of biomass (‘biogenic emissions’), impacts on air quality, impacts on water and soil, impacts on biodiversity, varying degrees of efficiency of biomass conversion to energy, competition between different uses of biomass (energy, food, industrial uses) due to limited availability of land and feedstocks and/or subsidies for specific uses amongst others.
5. EC also seeks views on the effectiveness of the existing EU sustainability scheme for biofuels and bioliquids and effectiveness in addressing solid and gaseous biomass sustainability issues.

[1] The GHG emissions from fossil fuels (referred to as the ‘fossil fuel comparator’) are to be the most recent actual average emissions from petrol and diesel consumed in the EU, as reported under the FQD, or a default value of 83.8gCO2eq/MJ24 if no such data are available. Part C of Annex V of the RED and Annex IV of the FQD set out how GHG savings from biofuels should be calculated.