Brussels, April 2010

A new report undertaken by the International Food Policy Research Institute (IFPRI) on behalf of DG Trade of the European Commission (EC), show positive environmental effects from the use of European biofuel production and the adverse economic consequences of large imports from Brazil - not only on the European industry - but largely on the biofuel industries of developing countries. The study - one of four to be submitted to the European Commission - analyzes the impact of possible changes in EU biofuels trade policies on global agricultural production and the environmental performance of the EU biofuel policy. In particular, it assesses the Indirect Land Use Change effects (ILUC) of several first-generation biofuels feedstock.

A careful analysis of the reports shows that all biofuel use scenarios provide net greenhouse gas savings after taking ILUC into account.  The report also concludes that the effect of EU biofuel policies on food prices will remain very limited.

However, some of the assumptions made in the report are incorrect and minimize the positive impact of biofuels on ILUC (see below: comments on the model used in the IFPRI report). The report also shows that more research is required in a number of areas before studies on ILUC can be used as basis for additional regulation.

Furthermore, the report clearly demonstrates that under a Free Trade Scenario, the European biofuel production would decrease by 48% by 2020 compared to 2008, seriously damaging the domestic industry together with adverse consequences on European energy security. In addition, under this scenario, Brazilian ethanol imports into Europe would be up by 724% while imports from Central America and Caribbean region would be down by 83%, seriously harming the economies of several developing countries.

From this – and other recent - report it can be safely concluded that Europe’s 10% renewable transport fuel target by 2020 can largely be achieved using domestically grown conventional biofuels – without negative ILUC impact.

“The conclusions of this reports show that – contrary to what was reported in some media – using bioethanol grown in Europe is better not only for the environment but also for the economy - in Europe and in developing countries. We can safely say that the current European Union biofuel policy is sound” Said eBIO’s Rob Vierhout. “With better assumptions and improved data, the results for biofuels would have been even more positive. As a matter of fact, recent work do show – and further confirm – positive ILUC effects from biofuels”, he added.

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