Biofuel crops under threat from European policy changes

Plans to phase out crop-based biofuels are expected to be published by the European Commission on 7 December.

This will form part of the commission’s plan for its new Renewable Energy Directive (RED) to run from 2020 to 2030 and from a UK perspective will mainly hit wheat, oilseed rape and sugar beet, known as first-generation biofuels.

A gradual phase-out is expected, with the regime instead favouring so-called advanced fuels, which use second-generation feedstocks, most commonly wastes and residues, rather than other crops which require land.

While there is some opportunity for agricultural wastes and residues, the most widely used feedstock in this group in the UK is used cooking oil, said NFU combinable crops adviser Tori Morgan.

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Consultation

However, first-generation biofuel crops in the UK could suffer a blow well before the EU’s new policy is in place.

A Department for Transport consultation is expected this autumn, cutting limits on how much of these crops can be used in road fuel from next year.

The EU RED allows for up to 10% of EU road fuels to come from renewable sources, of which 70% can be from biofuels.

UK road transport fuel is allowed to contain up to 5% biofuel.

However, the government has indicated it could reduce the rate as low as 2% as early as 2017.

Renewable sources

This is despite pressure from biofuel producers for the government to adopt so-called E10, whereby 10% of road fuel must come from renewable sources by 2020.   

The NFU is strongly opposed to the phase-out expected under the EU RED proposals, as well as to the likely path the UK government will take, fearing investment in the sector will suffer and UK growers will have reduced marketing options.

Whether the UK is in or out of Europe, both of these proposals are likely to affect the market for wheat, oilseed rape and sugar beet.

“First-generation crop-based biofuels represent a scalable and cost effective way to decarbonise the transport sector while delivering clear benefits for agriculture and the wider economy,” said Miss Morgan.

Biofuels is an important market for arable crops.

The UK’s two main bioethanol plants can use more than 2m tonnes of wheat a year at full capacity and when using only wheat.

About 19% of the 2015 UK oilseed rape crop was exported, with Germany’s biodiesel sector the main customer.

“The biofuel market provides a stabilising influence on farm incomes,” said Miss Morgan.

“The animal feed produced as a co-product is a vital source of protein helping the UK (and EU) narrow its protein deficit – we have a protein deficit of about 70%.”

Opposition

Farmer and agricultural co-op body Copa-Cogeca strongly opposes the commission’s plans to phase out conventional biofuels post-2020, saying that a long-term and stable EU policy was needed to meet EU climate goals, decarbonise the transport sector and ensure food security.

Crop feedstocks needed a long-term and stable, EU policy, said Copa-Cogeca president Thomas Magnusson.

“But in order to fulfil their potential, they need long term EU policy also if the EU wants to attract capital to the advanced biofuels sector.”

“We consequently urge the EU to ensure conventional biofuels are not phased out post-2020 in the upcoming reform of the EU renewable energy directive due out by the end of the year.

“If developed responsibly, sustainable biofuel production is a key element for global food production.”