Biofuels – Love them or loathe them

The UK has assumed a leadership position in Europe which enjoys the active support of the biofuels i

Love them or loathe them, it is certain that you can’t keep biofuels out of the headlines. Last year the financial pages hyped biofuels as the next big green investment opportunity.

This year the column inches paint an emotive picture of biofuels as the root of many evils currently afflicting the planet - rainforest destruction, starvation, poverty. It is probably safe to assume that neither picture is accurate.

But given that biofuels will almost certainly be part of our low-carbon energy future there is a genuine need for greater transparency and understanding, both with regards to the scale of benefits that biofuels can bring, but also over the risks that they carry.

When considering the scale of the impact, it is worth observing the normal modus operandi of the detractors of all forms of renewable energy, which is to pick on a single technology or process, present it as a ‘universal’ solution and then to ridicule this proposition.

Remember the images of a countryside swathed in wind turbines, as Bernard Ingham protested that wind ‘is not an answer to global warming’? Now we are told that there is simply not enough land to meet global demand for both fuels and food, but it is still not apparent who presented this as a serious proposal.

Given the scale of the challenge that we face, one might have hoped that the debate over climate change would have grown up, and those with a serious interest in securing stabilisation of CO2 concentrations at 550ppm would have accepted the reality that only a diverse combination of measures – each with their own advantages, limitations and risks – can together deliver progress.

There is no magic bullet.

Biofuels have a part to play, and in reality it is modest - the EU has limited its ambition for biofuels to 10% of the transport fuels market by 2020. The UK government estimates that its Renewable Transport Fuels Obligation will be saving 1 Mtonnes of carbon annually by 2010; by no means the complete solution to the crisis of burgeoning transport emissions.

But this limited scope is no reason in itself not to pursue the opportunity: it is the sum of a series of actions, each pursued vigorously and effectively that will mitigate climate change. Dismissing a solution because it alone fails to deliver salvation, plays directly into the hands of those with a vested interest in doing no more than preserving the status quo.

So what of the well-publicized risks? It is true, there are risks inherent in a biofuels supply. As indeed there are in many of the steps that we must take in the path to tackling climate change, and at times society faces difficult decisions. But the suggestion that these are not being recognized and managed, whilst it might make good campaign fodder, is far off the mark.

The EU’s 10% biofuels target is itself rooted in the research of the European Environment Agency, which found that European agriculture could meet - sustainably -17% of our primary energy needs. The report carried the caveat that specific steps must be taken to develop these resources with proper environmental safeguards. The UK is doing just that. To support this, the Government has established an ambitious programme of carbon reporting for biofuels that has as its end goal an incentive framework that rewards biofuels not on volumes supplied, but on the basis of verified carbon savings.

In taking these steps the UK has assumed a leadership position in Europe which enjoys the active support of the biofuels industry. Indeed, the industry has gone a step further, proposing an ambitious timetable for the move to carbon-based incentives.

This is simply a case of good risk management for business. Any environmental policy that ignores sustainability, or any carbon abatement policy that cannot demonstrate its capacity to deliver carbon savings, is itself unsustainable and presents unacceptable risk to investors. The timetable provides a clear way forward, whilst accepting that we cannot regulate on the basis of carbon until we have the data to make accurate and informed decisions.

In the real world this takes time, but will result in a better system that is built on the solid foundation of reliable data, not an artifice that presents the illusion of progress but delivers no real safeguards. The UK biofuels supply chain is working towards implementing a system that is robust, credible and enduring, rather than dashing to deliver a quick fix that would inevitably unravel.

And there may be a bigger prize from this approach. A leadership position is only of value if others follow, and while the UK may be pursuing biofuels for carbon abatement goals, the motivation elsewhere in Europe today can be decidedly different. The only prospect for more widespread adoption of the UK approach will be if the Commission and other Member States are persuaded that it is a reliable, workable and effective tool for securing carbon savings. Biofuels’ detractors have far more to gain from supporting the UK policy than attacking it.