The latest draft delegated act of the sustainable finance regulation goes part of the way to fixing what went wrong with the original text, but it still needs to be more inclusive when it comes to proven sustainable renewable energy solutions, writes the EU Biofuels Chain.

The EU Biofuels Chain includes the following associations: CEFS (sugar manufacturers); CEPM (the maize chain); C.I.B.E. (sugar beet growers); COCERAL (trade in cereals, oilseeds, pulses, olive oil, oils and fats); Copa and Cogeca (farmers and agri-cooperatives); EBB (European Biodiesel Board); EOA (European Oilseed Alliance); ePURE (European renewable ethanol association); and FEDIOL (vegetable oil and protein meal industry).

The EU has important ambitions for promoting investment and innovation in sustainable technology and renewable energy to move towards carbon neutrality, but it often sends mixed signals that risk making its actions counterproductive.

The recent policy twists and turns in various revisions of the draft delegated act on sustainable finance – the so-called taxonomy – offer a vivid example.

Even as it faces the challenge of drastically increasing the share of renewable energy in transport to meet EU Green Deal objectives, the EU is considering discouraging investments in technology that can make a huge immediate impact.

This is especially true when it comes to biofuels, which have been the most important and effective contributor to decarbonizing EU road transport, but which consistently get underpromoted by policymakers.

The latest draft delegated act circulated to member states on 24 March, is an improvement in some respects over the version submitted to public consultation, but the new text raises more questions than it answers.

The good, the bad & the ugly

Let us look at the good, the not-so-good, and the downright bad:

Good: The manufacture of biogas and biofuels for use in transport would no longer be considered as transitional, as it clearly belongs to the activities referred to in the Regulation relating to increasing clean or climate-neutral mobility and producing clean and efficient fuels.

Not-so-good: The draft delegated act rightly states that food and feed crops could be used in the production of biochemicals and bioplastics. However, differentiating between the types of feedstock eligible for biofuels and biochemicals would ignore the reality of the functioning of biorefineries, which work with multiple inputs and outputs.

Moreover, the new text includes the addition of a specific target of GHG emissions reduction of -27% compared to fossil fuel feedstock but does not explain the rationale behind this figure.

Bad: Those same food and feed crops could not be used to make biofuels if this draft is adopted, despite the obvious and growing need for sustainable biofuels to meet decarbonisation targets. This contradicts the hard-won sustainability criteria established in RED II, which defines and supports sustainable biofuels – including crop-based ones, which account for over 64% of biofuels use in the EU and 58% of the renewable energy in transport alone.

The draft delegated act offers no justification for disregarding the RED II sustainability criteria, and even ignores the findings of the 2020 Commission’s Renewable Energy Progress Report, which confirmed that these biofuels have significantly contributed to CO₂ emissions reduction in the transport sector in 2018 without causing adverse environmental impacts or higher food prices.

A more consistent approach

In other words, the EU has already well defined what should be considered as sustainable biofuels, and rendered the old “food vs fuel” debate irrelevant. Instead of making another unwarranted attack on crop-based biofuels, the Commission should remove the reference to “food and feed crops” from the text, and allow all sustainable biofuels to enable the transition to carbon neutrality.

The Commission itself assumes that an even higher renewable energy share of 24% in transport is required to ensure that the transport sector contributes sufficiently to the 55% GHG saving target of the Green Deal. Therefore, considering that transport has the lowest share of renewable energy use, all sustainable transport fuels eligible under the RED II should be also eligible in the EU taxonomy.