Scratching the surface of the biofuel sustainability debate

Géraldine Kutas — posted 09/09/2016

The publication of the Communication on low emission mobility by the European Commission in late July and the announcement of the upcoming new Renewable Energy Directive put biofuels, once again, in the front stage.

And this inevitably made it irresistible for stakeholders to push forward as many reports, blogs and opinions as possible to convey their arguments with the Commission. Many of these publications have a common point: to criticize the whole conventional biofuels world. This is not the first time I express my regrets and frustration with this black and white approach. As I have repeated over and over, not all biofuels are created equal and each of them should be evaluated based on its true environmental impact.

The fact is that none of the recent publications addressed founded criticism to sugarcane ethanol, which despite being a conventional biofuels has among the highest emissions saving performances. Even Laszlo Varro, chief economist of the International Energy Agency (IEA), who recently strongly criticized biofuels alleging “ugly questions about sustainability” said that “if I had to write a list with the world’s best designed schemes for investment in renewables, countries such as Mexico and Brazil would be there”. With 45% of energy coming from renewables, Brazil has one of the world’s cleanest energy mix and sugarcane is the #1 source of renewable energy. Sugarcane is mainly used to produce ethanol that reduces emission by 90% on average, in addition to bioelectricity. For me, the words of Mr. Varro are a clear proof that some conventional biofuels are better than others!

Now, the question is: how is the Commission going to distinguish among conventional biofuels on the basis of their individual environmental performances? This is a difficult political decision to make. However, in practice, this is what the scientific evidences tell us: there are sustainable conventional biofuels even when you scratch the surface!

The European communication on low-emission mobility: a missed opportunity?

Géraldine Kutas — posted 20/07/2016

Today the European Commission published a Communication on low-emission mobility which lays down its vision and strategy for transport over the next few decades. While we acknowledges the Commission’s clear support signal towards advanced biofuels – as they certainly represent one way forward to decarbonize transport – we are also deeply concerned about the gradual phase out of first-generation biofuels.  As the Indirect Land Use Change (ILUC) Directive last year, this approach discriminates against all first-generation biofuels regardless of their actual GHG emission reductions. Such a U-turn only creates legislative instability and confusion for investors and does not help the EU in achieving its ambitious climate targets.

By refusing to take into consideration the concrete positive impacts of ethanol produced from sugarcane, the proposal effectively turns a blind eye to one of the cleanest alternatives on the market today.

Unlike other first-generation biofuels, sugarcane ethanol is one of the best performers in terms of GHG emissions reduction, even when indirect land-use change is considered. Moreover, Brazilian sugarcane ethanol does not face the alleged food vs. energy dilemma since, according to recent studies, including by the International Food Policy Research Institute (IFPRI, 2016), it has a negligible impact on food prices. Other countries are also looking at reducing their emissions from transports. Brazil, for instance, has replaced 45% of its gasoline consumption with sugarcane ethanol and the United States classified this specific biofuel as an advanced alternative.

By progressively eliminating first-generation biofuels, the Commission does not solve the problem of emissions from the 94% of energy in transport which will still be coming from liquid fuels in 2030.

We hope that the assessment of the impact of a gradual phasing-out of first-generation biofuels takes into account the investment already made by the industry. The development of advanced biofuels would depend on a healthy conventional biofuel industry, which is going to face great instability and economic losses in the years to come due to the regulatory shift generated by the ILUC Directive first and this strategy now.

The discriminatory approach towards first generation biofuels makes this Communication on low-emission mobility a missed opportunity.

Now, we look forward to the opportunity to maintain a fruitful and constructive dialogue with the Commission in the upcoming phase towards the new Renewable Directive and a new policy for sustainable bioenergy and biofuels for the period post-2020

Brazilian Sugarcane Biofuel Producers Urge Increased EPA Support for Advanced Renewable Fuels

Elizabeth Farina — posted 11/06/2016

The Brazilian Sugarcane Industry Association (known by the acronym “UNICA”) today commented on proposed 2017 renewable fuel standards by the Environmental Protection Agency (EPA). The association also issued the following statement, which should be attributed to UNICA’s President, Elizabeth Farina.

“Brazilian sugarcane producers are proud of the modest but important role they play supplying the United States with clean, low-carbon renewable fuel.  Over the past four years, nearly 1.2 billion gallons of sugarcane ethanol imported from Brazil flowed into American vehicles.  During this time, sugarcane ethanol comprised only 2% of all renewable fuels consumed by Americans, but has provided one-tenth of the entire U.S. advanced biofuel supply.”

“Our official comments make clear that with the right market conditions, Brazil has the capacity to supply the U.S. with significantly greater quantities of advanced biofuel than the 200 million gallons assumed by EPA’s 2017 proposal.”

“EPA has the ability to stimulate the market for advanced biofuel.  We urge the Agency to keep as close to the statutory volume requirements as possible and take measures to encourage the production and import of low-carbon renewable fuels, rather than discouraging these fuels by lowering their demand.”

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The Brazilian Sugarcane Industry Association is the leading trade association for the sugarcane industry in Brazil, representing nearly 60 percent of the country’s sugarcane production and processing.  More information on sugarcane ethanol and its role as an advanced biofuel is available at www.sugarcane.org/rfs.

Sugarcane at the crossroad of agriculture, energy, transport and innovation

Géraldine Kutas — posted 21/03/2016

This week UNICA’s President Elizabeth Farina was supposed to attend the Apex-Brazil conference on the EU-Brazil partnership, in the presence of Brazilian Ambassador to the EU Vera Machado.

Of course, the event was cancelled as a consequence of the tragic events in Brussels on Tuesday 22 March. Elizabeth would have shared important messages on sugarcane which represent such a strategic sector for Brazil, as it delivers many products and opportunities, mainly from sugar and ethanol.

On sugar, some of you may already know that a little over ten years ago when the EU and Brazil were negotiating the Mercosur agreement, sugar was excluded from it because the EU sugar market was deemed to be too fragile for competition. Since then, it has gone through a series of reforms – the last of which will take place next year – that will effectively make it mature for competition from abroad. A number of countries have already been granted duty-free sugar export quotas to Europe. It’s time Brazil is given the same treatment through the EU-Mercosur agreement.

On ethanol, we have extensively debated about its sustainability. Let’s talk now about the role it could play if only it was traded freely in Europe. Unfortunately, what currently happens is that ethanol is considered an agricultural product, contrary to what happens for biodiesel which is considered a chemical product, and this means a higher tariff at 19 euro/hectoliter in the EU. This custom classification is effectively preventing Brazil to export to Europe. By removing this tariff barrier, more Brazilian sugarcane ethanol could be traded with Europe. This does not mean that it would replace European production, but only complement it.

In addition, those who think this would only benefit Brazil are missing the point. It’s about much more than just exports really. Firstly, this would benefit European companies as well. Approximately 20% of the sugarcane processing in Brazil is actually done by European groups. For those operating in Europe in the bio-chemical and bio-plastic industry, it would mean access to an affordable and low-carbon feedstock in the shape of sugarcane ethanol.

With minimum 71% GHG emission reduction according to default values in the Renewable Energy Directive, and 55% if ILUC is factored in, its GHG performance is simply unmatched among first generation biofuels. Higher blends in conventional fuels would be a simple step. Add to this the diversification of supply sources, the competition to lower costs, the alleviation of pressure on cereals commodity markets… If this is not a low-hanging fruit to help the EU decarbonize its transport sector, I don’t know what it is!

If the EU wants to decarbonize its transport system, it must address the paradox of trading oil freely while imposing high import taxes on Brazilian sugarcane ethanol. The Mercosur agreement is a good opportunity to do this; let’s not waste it.

Climate change mitigation versus agricultural protectionism: the EU impasse?

Géraldine Kutas — posted 12/03/2016

What would you think if I told you that I want to have a leading role in climate change policy but that I restrict the access of renewable solutions to my market?

“You’re totally inconsistent” would be the natural answer. But this is exactly what the European Commission just did.

The EU has ambitious climate targets. The Commission is currently engaged in drafting its new renewable energy directive and is discussing its strategy post-2020 to decarbonize transport. The same institution, based on the conclusions of the so-called GLOBIOM study, acknowledges that sugarcane ethanol is the conventional biofuels with the highest greenhouse gas savings. Brazil is also producing second-generation ethanol based on sugarcane wastes and residues.  Therefore, it would make sense for the EU to import sugarcane ethanol.

Wrong answer. Domestic vested interests prevailed over the EU public interest and the Commission decided to remove ethanol from the trade offer that was exchanged with Mercosur yesterday! Consequently, the EU will continue to import oil freely and to promote the consumption of inefficient biodiesel.

Read our position paper and you will get a sense of how disappointed and, to some extent, how frustrated I am.

The EU-Mercosur agreement would provide a unique opportunity to strengthen our collaboration in the sugar and ethanol sector – a sector in which a number of European companies (Shell, Tereos, BP, Louis Dreyfus among others) have already heavily invested in Brazil.

The sustainability and competitiveness of Brazilian sugar and ethanol would be a perfect complement to the EU production, increasing consumers’ welfare, boosting innovation in the bioeconomy while helping to preserve the environment.

It’s time to change the way we look at trade negotiations. They don’t take place in isolation of other policies. The Commission will have a second chance to include sizeable TRQs for sugar and ethanol in the next round of negotiations. Let’s hope it won’t be a missed opportunity!