Accusing EU’s Indirect Land Use Change Policy

On 8th February 2019, The European Commission (EC) has issued a Draft European Commission Delegated Regulation Supplementing Directive 2018/2001 on the Promotion of the use of energy from renewable sources (RED II) or in short, is called as Delegated Regulation of ILUC-REDII.

The draft policy is expected to be detrimental to the world’s palm oil producers resulting in Palm oil producing countries (CPOPC) including Indonesia express their rejection of the policy plan.

The key word for the EU policy plan is the linkage between biofuels and indirect land use changes (ILUC). In the document, it is stated that ILUC occurs when the biofuel production process causes food crops land to decrease (convert to biofuel plants), triggering the conversion of forests or high carbon stock land into farmland thus additional GHG emissions occur. This is different from the change in direct land use (DLUC), the change in land use was from land without specific purpose for growing food crops and then ultimately be used to grow crops for biofuel production.

Many are questioning ILUC biofuels emissions in the EU RED II policy and it has faced a lot of criticism from various experts as well as from world biofuel producers including palm oil producers. Besides being difficult to separate the impact of ILUC with DLUC, they assume it is only a made up story.

First, the contribution of land use change-land use change forestry (LUCLUCF including ILUC) in global emissions is very small at around 10 percent (Sandstrom, et.al 2018). The main contributors (60-70 percent) of global emissions are from fossil fuel emissions (IEA, 2016). So that the issue of emissions from ILUC only diverts the problem, made up and does not contribute to global emissions solutions.

Second, as mentioned by Prof. General Klepper (Kiel Institute for World Economic) that there are many variables involved in land use change (DLUC, ILUC) in each country including commodity prices, population growth, development and government policies. Is the conversion of convertible forest by the government into agricultural area due to oil palm? How to separate the occurrence of a land use change? Is it due to indirect expansion of biofuels or there might be other variables involved?

Third is the ILUC transnational phenomenon. Let’s say for example the increase in prices of rapeseed oil and sunflower oil in the EU is indeed due to demand for biofuel and non-biofuel, which has led to increased imports of palm oil and soybean oil from outside the EU, and it causes conversion of forests to soybean gardens or oil palm plantations outside the EU. This means that there are additional global emissions. Then here is the question, is it the fault of rapeseed plants, sunflowers or soybeans or oil palm?

Fourth, ILUC is a result of technological progress. For the EU that has already been full employment, the expansion of biofuel plants is almost impossible. Therefore the intensification of biofuel plants is a real solution of the day. Intensification of biofuel plants by using more fertilizer and mechanization (technological improvements) will also cause additional emissions (ILUC technology changes) which are even greater than the emissions of soybean gardens or oil palm plantations outside the EU. How about it?

There are many other things related to ILUC biofuel, which are actually not reducing global emissions, on the contrary increasing global emissions. Thus, incorporating ILUC factor of biofuels in the RED II EU is seen to be far-fetched and it becomes the reason for the EU to limit biofuel (unfair trade) from outside the EU. Moreover, in its implementation, the policy will apply new certification for biofuel (high risk, low risk) before entering or exiting the EU. This certification will probably add to even greater emissions than the additional ILUC emissions at issue. So, what kind of new game that is being designed by the EU?

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