By Charlie Dunmore
BRUSSELS (Reuters) - The European Commission has watered down proposals to reduce the indirect climate impact of biofuels, but is sticking to a strict new limit on the amount of food crops that can be used to make fuel, draft legislation showed.
The late changes mean that fuel suppliers will not, as originally planned, be held accountable for the indirect emissions biofuels cause by displacing food production into new areas, resulting in forest clearance and peatland draining known in EU jargon as ILUC.
"The 5 percent limit is still in, but the ILUC factors are now purely for reporting purposes and not part of the sustainability accounting rules for biofuels," one EU source involved in the discussions said.
The plan to limit use of crop-based biofuels to 5 percent of total EU transport energy demand by 2020 represents a virtual halving of the bloc's current goal, which mandates a 10 percent share of renewables in transport by the end of the decade.
"The share of energy from biofuels produced from cereal and other starch rich crops, sugars and oil crops shall be no more than 5 percent... of the final consumption of energy in transport in 2020," said the draft legislation, seen by Reuters.
A Commission source, who also spoke on condition of anonymity, confirmed that the proposed indirect land use change (ILUC) emission factors for biofuels made from cereals, sugars and oilseeds would carry no legal weight.
As a result, fuel suppliers will be free to continue blending biodiesel made from rapeseed, palm oil and soybeans into their fuels and claiming credit for cutting emissions, despite EU scientific studies showing that overall emissions from biodiesel are higher than from fossil fuel.
Figures in the proposals show that ILUC emissions linked to biodiesel from oilseeds are more than four times higher than those for ethanol made from cereals or sugar.
BOOST FOR BIODIESEL
The changes are a victory for European biodiesel producers who said the Commission's original proposal would have wiped out their industry practically overnight, and who have complained that the scientific models underpinning ILUC calculations are too uncertain.
But the move could harm ethanol producers, who had been expected to increase their share of the EU biofuel market from 20 percent currently, at the expense of dominant biodiesel.
"I don't know what the Commission is thinking," said Rob Vierhout, secretary general of EU bioethanol lobby ePURE. "What will happen is people will walk away from Europe and invest their money somewhere else, because there is no future for the biofuel industry in Europe anymore."
Campaigners who blame biofuels for taking food out of people's mouths for little environmental benefit also criticized the much-delayed proposals.
"We've waited two years, and what we've ended up with is an ILUC proposal from the Commission without any ILUC in it," said Laura Sullivan, European Advocacy Coordinator for anti-poverty campaigners Action Aid.
"With this proposal, European citizens will have no guarantee that the biofuels they put in their cars are actually better for the climate," said Nusa Urbancic, fuels campaigner with green transport campaigners T&E.
The Commission will formally present its proposals on Wednesday, after which the rules must be jointly agreed by EU governments and lawmakers in a process that could take up to two years.
(Additional reporting by Barbara Lewis; editing by Rex Merrifield and James Jukwey)