EU’s biofuels U-turn is final nail in coffin of Irish sugar

When it was enacted in 2009, the EU’s Renewable Energy Directive was seen as a progressive step towards meeting Europe’s climate change targets, writes Dick Roche.

EU’s biofuels U-turn is final nail in coffin of Irish sugar

The directive — which provided that by 2020 at least 10% of EU transport sector energy must come from renewable sources — opened the prospect of repeating in Europe the ‘quiet revolution’ in rural investment and jobs that that the US witnessed from its ethanol policy.

The ink on the Renewable Energy Directive was barely dry when, in 2012, the European Commission proposed in a drastic policy U-turn to cut the target from 10% to to 5% of transport energy.

Two notions drove these proposals: a belief that biofuel production caused major increases in world food prices and a theory that increased EU biofuel production would lead to untenable levels of global indirect land use change.

Both notions have since been debunked.

Since 2012 the World Bank, the OECD and the United Nations Food and the UN Agriculture Organisation (UN FAO) have all concluded that biofuel production is not a key driver of food prices. Indeed, in its 2013 report ‘Long Term Drivers of Food Prices’ the World Bank does not even rank biofuels as a player of any significance.

Earlier this year, the Commission confirmed that EU biofuel policy has not led to negative impacts on food prices. The primary cause of the price spikes was the price of oil. Concerns about indirect land use change were debunked in a study produced by respected international environmental consultants for the Commission, the ‘Globiom Study’. This concluded in particular that European-produced ethanol has low impact on land-use change.

The Commission’s reply was telling — faced with an ‘inconvenient truth’ it tried to bury the study. While the Commission’s proposals were amended as they moved through the EU legislative process the results of the policy reversal that they heralded were disastrous.

Investors fled EU biofuels, projects were abandoned, jobs were lost, rural communities were robbed of development opportunities, farm families were excluded from a valuable income stream, the opportunity to make Europe less dependent upon fossil fuel imports was also lost and it became that much more harder for the EU to meet its GHG targets, particularly in road transport.

Undeterred by the damage already done, the Commission has come up with another policy change. It now proposes to phase out conventional biofuels post- 2020.

These proposals have no basis in science or in logic. They are built upon the same debunked myths as the EU’s last policy U-turn. They ignore the Globiom Study, the best available science, and are backed by a heavily criticised half-baked impact assessment. [The Brussels-based Impact Assessment Institute has criticised the assessment’s “lack of transparency and unsubstantiated assumptions”].

The proposals will have devastating impacts. Over 200,000 people are employed in the EU by the biofuels industry.

The industry reckons at least half of these jobs will go if the Commission succeeds. The Commission has produced no convincing evidence to contradict that figure. Taken on top of the damage done of the last policy reversal, the proposals will end all European investment in conventional biofuels: investment in the sector in the Americas and Asia is booming.

One big Irish loser will be the campaign to revive Irish sugar production through the creation of joint sugar / bioethanol production facilities. Successive Irish governments have given verbal support to the campaign while pointing out that the revival must be driven by private investment — who will invest in sugar if the Commission’s demands that bioethanol is to be phased out becomes law? Farm incomes will be badly hit. EU tillage farmers generate over €6bn annually from the biofuel industry. The Commission has not shown how this could be replaced.

There is another problem: the EU imports 30-35 million tonnes of animal feed each year. Ireland is a major importer. Most of the imported material is GMO-based. Phasing out biofuel production will make Europe even more dependent on imported feed increasing vulnerability to global market movements.

Becoming more heavily dependent on GMO imports makes no sense for a quality food-producing country like Ireland. In 2015, the general secretary of UN FAO advised it was time for a ‘paradigm shift’ in the biofuels debate and called for a “move from the food versus fuel debate to a food and fuel debate”.

The Commission turned a deaf ear to this advice. In the coming weeks it will be interesting to see if those who represent Ireland in Brussels are more willing to listen.

Dick Roche is a former Minister for the Environment; he is now an advisor for Hungarian ethanol firm Pannonia, among his other activities

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