The environmental and social effects of increased production of agrofuels – liquid fuels produced from agricultural products – are much debated. Proponents consider it the answer to both rising oil prices and the negative climatic consequences of fossil fuels, but they are opposed by those who warn for the threats that agrofuels pose to food security, biodiversity and poverty reduction.
Although biofuels can be produced from various types of biomass using different techniques, at the moment virtually all commercially produced biofuels are agrofuels, i.e., produced from crops grown on agricultural lands.
Since the beginning of the 21st century, production of agrofuels from food crops such as sugar cane, corn, wheat, sugar beet and oil palm, has increased enormously, largely driven by policies and subsidies to stimulate biofuel use. Many national governments, hoping to become less dependent on the import of expensive fossil fuels, developed policies that directly or indirectly provide incentives to companies and banks to invest in biofuel production and processing plants.
Some economists believe that the increased production of agrofuels marks the beginning of an agricultural renaissance, with farmers earning higher incomes thanks to increased demand for agricultural crops for energy production. Expectations are high as regards the prospects of using ‘marginal’ land for energy crops. Other scholars believe that the adoption of policies to stimulate biofuel production has kick-started a new scramble for land that will push aside food production, food producers and eco-systems. They expect that private investors will prefer to invest in energy farming on fertile lands – rather than so-called marginal lands – in order to reach break-even points as soon as possible.
Discussions concerning the pros and cons of agrofuel production have long remained limited to a simplistic debate in which they were either presented as cure or curse. Recently consensus has been growing over the fact that increasing demand for agrofuels is leading to increased pressure on the land, with potential negative consequences for people and the environment. However, the extent to which these effects can and should be controlled through quality standards is topic of ongoing debate. Any discussion concerning agrofuels is bound to be charged because it brings together a range of political and business interests in areas as diverse as energy security, the oil industry, agricultural policy, the food industry, poverty and development, climate change, biodiversity and the automobile industry. These discussions are only meaningful when they are based on unbiased information and a proper understanding of the actual effects of agrofuel production.
The Renewable Energy Directive (RED) and blending targets
The Renewable Energy Directive (RED) of the European Union promotes the blending of biofuels with fossil fuels in the transport sector. The primary aim of the directive is to reduce greenhouse gas (GHG) emissions to combat climate change. According to the RED, the overall target for renewable energy (which includes biomass, biogas, wind, solar, hydro and geothermal energy) across the European Union is 20% in 2020, and the directive presents binding targets for each member state. Within this national target, each member state is obliged to realise at least 10% renewable energy in the transportation sector. As the 10% target for renewable energy in the transport sector is likely to be met primarily through the use of biofuels, we tend to speak of a 10% ‘European blending target’.
Obligatory blending targets may be in place at the level of individual member states. The Netherlands is one of the few European countries with legally defined blending targets for the transport sector already in place (Besluit biobrandstoffen voor het wegverkeer 2007). Due to unresolved uncertainties about sustainability and growing criticism of negative impacts of first generation biofuels, on 10 October 2008 the Council of Ministers agreed to reduce the biofuels targets for 2009 and 2010 from 5.75% to 4%.
The RED sets binding sustainability criteria for biofuels. Market parties themselves will have to prove, through independent audits, that their biofuels meet the criteria. Only if the binding sustainability criteria are met will the biofuel count towards the renewable energy target.