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Factsheets on the sustainability of biofuels

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Biofuels are surrounded by sustainability concerns, which negatively impact their market prospects, especially in the EU. Rumour has it, that more than 50 million hectares of land were grabbed to …

Biofuels are surrounded by sustainability concerns, which negatively impact their market prospects, especially in the EU. Rumour has it, that more than 50 million hectares of land were grabbed to produce crops for biofuels, that biofuels endanger food security in developing countries, and that biofuels do not save the climate. But, biofuels are not simply bad or good. This presentation informs on key impacts, in an attempt to split facts from fiction, and to draw lessons for policy makers and developers. It was held by Dr. Carlo Hamelinck, Managing Consultant Bioenergy at Ecofys, during a webinar on 27 May 2014.

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  • 1. Fact checks for the biofuels sustainability debate Ecofys Webinar Dr. Carlo Hamelinck c.hamelinck@ecofys.com 27 May 2014
  • 2. © ECOFYS | | Key lessons from this presentation > Biofuels are necessary > The potential is huge > The sustainability is complex > But it can be managed > Policy decisions should be based on facts, not perceptions > Biofuels are an important opportunity for developing countries 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com2
  • 3. © ECOFYS | | Why bioenergy? > Renewable and sustainable – Regrows – Reduces greenhouse gas emissions > Versatile – Can provide base and peak load electricity – Complementary to other renewable energy sources – Many different energy products: power, heat, fuels > Cost effective – Can be cheaper than other renewable energy sources – Builds on existing infrastructure – Connects to existing business > Secures energy supply – Can use waste streams – Locally and globally available, sometimes abundant > Employment – Opportunities along supply chain 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com3
  • 4. © ECOFYS | | Global biofuel mandates / targets 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com4
  • 5. © ECOFYS | | Even larger role towards 2050 (in a truly sustainable world) 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com [Ecofys / WWF 2011] 5
  • 6. © ECOFYS | | EC projection on renewable energy > 2010: 85 Mtoe (9 Mtoe electricity, 62 Mtoe heat, 14 Mtoe biofuels) > 2020: 140 Mtoe (20 Mtoe electricity, 90 Mtoe heat, 30 Mtoe biofuels) [EC 2012] 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com6
  • 7. © ECOFYS | | EU Renewable Energy Directive 10% = All Renewable Energy in all forms of transport Petrol, diesel, biofuels, electricity In road and rail transport In all transport > 10% target in 2020 “renewable energy in transport” > Electricity in road vehicles counts 2.5 times > Biofuels have to comply with sustainability criteria > Biofuels from waste, etc… counts twice 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com7
  • 8. © ECOFYS | | EU Fuel Quality Directive > Mandatory 6% reduction of greenhouse gas emissions from all energy used in transport for 2020 compared with 2010 – First 2% by December 2015 – Another 2% by December 2017 – Last 2% by 2020 > By far most emissions result from final combustion – Final emissions from fossil fuels are stoichiometric – Difficult to improve exploration, transport and refining > Emissions could be reduced by using biofuels – 6% reduction for the total pool, using fuels that perform 60% better then average, requires 10% of those fuels – FQD and RED harmonised sustainability requirements > This part of FQD is not yet implemented by MS – Lack of instructions from EC 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com8
  • 9. © ECOFYS | | EU Fuel Quality Directive 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com [Ecofys 2014] 9
  • 10. © ECOFYS | | Renewable energy in transport Overview all EU Member States 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com [Ecofys 2014] 10
  • 11. © ECOFYS | | International biofuels trade (in kt) 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com11
  • 12. © ECOFYS | | International biofuels trade (in kt) 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com12
  • 13. © ECOFYS | |2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com13 Biofuels have received much criticism > July 2006 Shell: “biofuels from food crops are morally inappropriate” > April 2008 UN Special Rapporteur on the Right to Food: “Biofuels are a crime against humanity” > April 2008 World Bank President: “While many worry about filling their gas tanks, many others around the world are struggling to fill their stomachs. And it's getting more and more difficult every day.” > April 2008 UN Secretary General Ban Ki-moon: “We need to be concerned about the possibility of taking land or replacing arable land because of these biofuels […] While I am very much conscious and aware of these problems, at the same time you need to constantly look at having creative sources of energy, including biofuels. Therefore, at this time, just criticising biofuel may not be a good solution. I would urge we need to address these issues in a comprehensive manner.” > April 2014 IPCC: increased cultivation of biofuel crops may “exacerbate the already serious water scarcity” and may have “negative impacts on the lives of poor people” [© misterhuyun/freeimages.com]
  • 14. © ECOFYS | | Sustainability of biofuels: many topics > Greenhouse gas emission reduction – Direct emissions – Emissions from Indirect Land Use Change : ILUC > Land use – Biodiversity – Water footprint – Local environmental impacts to soil, water & air > Socio-economic aspects > Food security > Land grabbing > Employment & labour aspects > … 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com14
  • 15. © ECOFYS | | Principles of greenhouse gas calculations in the EU renewable energy directive > Three key elements > Typical and default factors > Standard rules for accounting > Fossil comparator > RED methodology is a political concept, necessary to distinct between various supply chains in a pragmatic manner – but not suitable to draw conclusions on the real greenhouse gas impact from all biofuels together 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com15
  • 16. © ECOFYS | | Comparison biofuels and fossil fuels GHG balance 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com16 [Ecofys 2014]
  • 17. © ECOFYS | | Dealing with co-products: Classic LCA options > Substitution: – Fact: Co-products from a biofuel chain avoid the production of those products elsewhere in the society – Principle: Causality – Approach: Credit by subtracting burden of avoided system > Allocation: – Fact: The most valuable products can be held responsible for the largest environmental burden in a chain – Principle: Economic driver for the action – Approach: Distribution of burden over two or more products > Both methods are very realistic approaches to reality > Both methods inherently yield different results 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com17
  • 18. © ECOFYS | | Typical and default factors > EC Directives use typical factors calculated by JRC – Partially based on old data, probably conservative – Actual calculations are not public – Biograce mimics the calculations (Biograce tool is officially approved by EC) > Default values – Processing part 40% worse than typical value – Companies have to use default values – or calculate own values 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com [Biograce 2014] 18
  • 19. © ECOFYS | | Fossil comparator > RED directive: 83.8 gCO2eq/MJ – Average value for gasoline and diesel in EU > EC in ILUC impact study assumes 90.3 gCO2eq/MJ in 2020 > California LCFS programme assumes 94.7 en 95.9 g CO2eq/MJ – Diesel and gasoline respectively > Actually, biofuels replace the marginal fossil fuel… > And the comparator should be the marginal value – Shale oil, deep sea oil, arctic oil, tar sand oil, synthetic diesel from coal, can have up to 2 times more emissions 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com19
  • 20. © ECOFYS | | ILUC Principle of indirect land use change > Demand for biofuels feedstock and the associated land requirements can have direct and indirect effects of land use change > Direct: LUC – A forest is converted into a plantation > Indirect: ILUC – Biomass is sourced from an existing plantation – The market feels a shortage (prices increase, demand reduces) – Someone else develops a new plantation with risks for carbon stock and biodiversity > ILUC is much debated in field of biofuels: – EC proposed RED amendment 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com20
  • 21. © ECOFYS | | ILUC Principle of indirect land use change > Displacement of previous land use (e.g. timber wood) is compensated by conversion of land into plantation elsewhere > Note that indirect land use change is direct land use change caused by another sector of the economy (e.g. pulp or timber sector) > Where the ILUC takes place is uncertain and is out of control of the bioenergy sector Forest Forest Existing Plantations B B’ A Direct land- use change Indirect land- use change B’’ Grassland ? ? [Ecofys 2012] 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com21 [Ecofys 2012]
  • 22. © ECOFYS | | Adding ILUC factors to default factors [Lahl and Pieprzyk 2012] 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com22
  • 23. © ECOFYS | | Be careful with the ILUC concept > Political concept – Policy makers want to understand the broader consequences of their decisions – Compare world with and without biofuels – Marginal LUC probably causes high carbon emission – ILUC is actually LUC from another sector – Real direct causes are not solved > Sets precedent to evaluate other policy for indirect effects – EU reduction in agricultural acreage also causes ILUC – Nature conservation in one area also causes ILUC elsewhere 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com23
  • 24. © ECOFYS | | Low Indirect Impact Biofuels (LIIB) • Use of fallow or degraded lands • Yield increase above trendline • Use of residues with limited current uses • Sustainable intensification of land use • Aquatic biomass production • Methodology for cost-effective certification • Of low/no ILUC biofuels • For use in policy and certification schemes • Tested (Brazil, Indonesia, Mozambique, S-Africa) • Currently tested in the European Union • Developed by WWF, Ecofys, RSB Low ILUC approachesLIIB is > Examples: – Oil palm on unused land in Indonesia – Integration of cattle farming with sugar cane production in Brazil 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com24
  • 25. © ECOFYS | | In perspective: global agricultural land > Global agricultural land: 5 billion hectare in total Livestock (70% of agricultural land) Livestock feed (22%) Food (5%) Materials (2%) Feedstock for biofuels (1%) 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com [Shell 2012, Argos 2013] [Photography © Ecofys, maiapi/freeimages.com, sulfurix/freeimages.com, robertz65/freeimages.com] sulfurix/freeimages.com 25
  • 26. © ECOFYS | | Food security > Concern: – Biofuels use food/feed crops as feedstock – Additional demand  The poor face lower supplies and higher prices > Hunger in context – 2010 crop production was enough to feed 12 billion people and the world can produce more – Hunger and poverty continuously decrease – Hunger is caused primarily by ● Suboptimal yields, wastes, absence of (organised) markets, inefficient infrastructure, lack of investments, conflicts, … – Not by a reduced supply from developed countries > The price of food crops mainly depends on the oil price 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com26
  • 27. © ECOFYS | | Global price of products (normalised) and global biofuels volume (normalised) 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com27
  • 28. © ECOFYS | | Global price of products (normalised) 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com28
  • 29. © ECOFYS | | Jatropha, the miracle crop! > It is not edible – (does it not use land that could be used for edible crops?) > It grows on arid land – (well, it survives maybe for a while without water, but it does not produce under such conditions!) > It helps the small farmer – (Yes it is very labour intensive, therefore it can only be economically viable if the people stay poor!) > Lesson: beware of hypes! 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com29 [Photos by Hamelinck]
  • 30. © ECOFYS | | Land grabs for biofuel > Concern – Some biofuels projects in developing countries involve land grabs, broken promises or other strong concerns > ActionAid [2012] – “Globally, it is estimated that biofuels have been involved in at least 50 million hectares being grabbed from rural communities, and participated significantly in the 2008 food crisis” > Our evaluation: – Same database (ILC Land Matrix, version Mars 2013) – Top 50 deals – (1) Checked whether deals are true – (2) Checked relation with biofuels (all entries) – (3) Checked level of concern – (4) Factored plausible connection to EU market 30 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com
  • 31. © ECOFYS | | Land grabbing: our evaluation > Maximally, 180 – 260 kha of land may be grabbed that can be connected to the aluring EU biofuels market – Probably much less – Direct link between EU market and land grabs much smaller 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com31 [Ecofys 2013]
  • 32. © ECOFYS | | Sustainable biomass sourcing Strategies for enterprises: robust today – fit for the future #1: Identify sustainability risks Depends on specific supply chain details Four key aspects give insight in general risk: • Biomass type • Country of origin • Contract volume • Supplier #2: Decide on trade-offs Certainty vs. efforts and costs • Choose an existing scheme • Or develop your own • Ensure compliance with future regulation #3: Match verification with contracting How much certainty needed before contract? • Fall-back options to adequate certification • Contracting aspects • Stepwise implementation with suppliers • Pricing, conditions and specifications #4: Get involved upstream To safeguard your future supply • Develop new plantations • With low indirect impacts 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com32
  • 33. © ECOFYS | | Sierra Leone: Sugar cane ethanol > Addax Bioenergy started cane ethanol production May 2014 – 10,000 hectares + outgrowers – 85 million litres ethanol for international market – 15 MW electricity for national grid (20% of Sierra Leone’s demand) – Workforce 2,750 people > Additional Farmer Development Programme (FDP): – 2400 hectares of rice fields for 53 communities – Addax Bioenergy has trained >2400 local farmers (65% women) 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com [Photos: courtesy of Sandström / Addax] 33
  • 34. © ECOFYS | |34 Tanzania: analysis of drivers and concerns > Drivers relate to positive impacts that are desired and that should be increased or optimised  Why do you want biofuels?  What do you want to achieve? > Concerns relate to negative impacts that are not desired and that should be avoided, minimised, compensated, or simply forbidden  What do you want to avoid?  Some concerns allow no compromise, some can be ‘negotiated > Optimise the national benefits – this requires a holistic approach Dr. Carlo Hamelinck - c.hamelinck@ecofys.com2014 05 27 [Photos by Hamelinck]
  • 35. © ECOFYS | | Tanzania: elements of biofuels policy framework > Governance : – Include stakeholders in national biofuels board – Improved attention to land acquisition process – Monitor projects and learn from it! – Capacity building all levels – especially communities > Careful development – Not too fast, not too large, not too long – First careful selection viable projects – then intensive guidance > Improve agricultural system – Access to know-how (schools, extension workers) – Access to means (machinery, agro chemicals) – Access to markets (logistics, co-operatives, auctions) 35 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com2014 05 27
  • 36. © ECOFYS | | Conclusion > Biofuels are needed in the future sustainable energy supply > Biofuels are important opportunity for developing countries > The sustainability of biofuels is complex – Many issues – No one-size-fits-all answers > Many concerns are true > Many concerns are exaggerated > Many concerns can be avoided > Mandatory sustainability requirements and certification helps > As most concerns are at the feedstock location – Most important solutions are also there! 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com36
  • 37. © ECOFYS | | More information Ecofys Carlo Hamelinck Managing Consultant Biofuels c.hamelinck@ecofys.com + 31 6 5201 5169 > More information and further reading in the IMPACT magazine “sustainable bioenergy”! 2014 05 27 Dr. Carlo Hamelinck - c.hamelinck@ecofys.com37 www.ecofys.com

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