Another of the EU's pet climate change projects goes down the drain

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For a change, there is some great news from the European Union: Another of the EU's flagship climate change/global warming projects - biodiesels - is going down the drain:

The continuity of the European biodiesel industry appears threatened as this summer's food vs. fuel debate has injected fresh life into long-pending EU proposals on how to prevent the indirect displacement of forest by crops grown for fuel ('indirect land-use change' or ILUC). Studies have shown that production of biofuels can lead to a net rise in CO2 emissions if ILUC effects are taken into account. Debate has raged in Brussels over whether and how these effects should be handled in new biofuels legislation. In October, proposals originally due in early 2010 are finally likely to see the light of day. A leaked draft suggests they are full of surprises - but one thing is evident: they spell big trouble for the European biodiesel sector.

Like almost everything else done by the EU, also the new biodiesel regulations will be complicated and require a host of bureacrats to administer them, although in this case the outcome - the end of the useless European biodiesel industry - will be a positive one:

Conventional biofuel production would be capped through a second mechanism as well: ILUC factors, or emission penalties to account for ILUC. The Commission proposes them not per feedstock, as NGOs wanted, but per crop category: 55grams of CO2-equivalent per megajoule (gCO2/MJ) for oil crops, 13gCO2/MJ for sugars and 12gCO2/MJ for cereals and other starch rich crops. These figures would be added on to the emissions balance sheet of biofuels and result in a new weighting of their climate friendliness – and thereby their usefulness to fuel suppliers who face a 6% emission reduction target under the fuel quality directive. Basically, the proposed penalties would be catastrophic for the biodiesel industry, which relies on oil-based crops. Fuel suppliers looking to meet their 6% target will not buy biodiesel when ILUC is taken into account. 

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But there is one thing they agree on: the proposals as they stand spell the end of the European biodiesel industry as we know it. The lethal blow comes from the ILUC factors – they make it impossible for fuel suppliers to use conventional biodiesel and comply with the 6% target in the fuel quality directive. The European Biodiesel Board (EBB), which represents producers who make about three-quarters of all EU biofuels today, says the proposals, if implemented, would “definitively cause the death of the whole EU biodiesel industrial sector.” 

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