Biofuels have been heavily promoted in the European Union as the most straightforward way to reduce greenhouse-gas emissions from transport.
Other ways of doing it are a more distant prospect. Electric cars are making a push, but are still some way from taking off, as are other innovative technologies. Biofuels, meanwhile, are perfectly compatible with combustion engines used today and are–more or less–readily available.
They are considered greener than gasoline and diesel based on fossil fuels because their carbon dioxide emissions –just the same as regular fuels when burned in an engine–are offset by the plants that are grown to produce them.
Here’s the problem: An increased use of biofuels encourages farmers to grow biofuel crops. But that potentially incentivizes farmers also to cut down forests and move into peat lands, both of which absorb high levels of carbon dioxide. Even if these lands aren’t claimed directly to grow crops for biofuels, biofuel crops could displace food crops that would then be forced to move there. This process is called ILUC and the end-result would be to actually increase CO2 emissions, rather than reduce them.
However, curbing CO2 are not be the only reason why biofuels could be important to Europe. There is another: energy security.
As a biofuels conference in Rotterdam last week made clear, prices of biofuels, while at the moment generally higher than those of oil-based competitors, are not closely linked to the volatile and highly unpredictable price of oil.
“The starting point for biofuels is not ILUC, it is our energy future,” said Philip New, the head of BP’s biofuel business, speaking at the conference. “We risk missing the priceless opportunity to develop a global energy resource which can contribute to security,” he explained.
BP, of course, has strong interest in the business, as it has invested billions of dollars in developing biofuels, mainly in South America. But Mr. New was pointing to an issue that other speakers at the conference also emphasized.
The U.S. Navy has, for example, been investing big money on the use of biofuels, mainly as a way to stabilize fuel costs and improve energy security.
Energy security is another top priority for the EU. The bloc is heavily dependent on oil and natural gas imports and its dependence will likely grow further. Biofuels could therefore be a way to ease that dependence on foreign countries, which is one of Europe’s top priorities.
That is part of the reason why within in the European Commission – the executive body of the EU – the energy department is still strongly supporting a target that the 27 countries have set to boost the use of biofuels by 2020, while the climate department is much more skeptical.
The outcome of this tough internal debate will likely be some sort of deal between the two contenders that will somewhat account for the ILUC risks, but not as much as environmentalists would like. The result may clear in the next few months–though further delays before the ouctome emerges cannot be ruled out.