IT is still a counterintuitive idea to many, particularly here in the climactically challenged Philippines, but there is a growing body of informed opinion that pressing for the increased use of biofuels is the wrong response to combating climate change.
On April 28, the European Parliament approved changes to existing environmental laws in the EU that would impose upper limits on the use of biofuels – primarily ethanol to be blended with gasoline, and biodiesel for use in diesel and jet fuel – reversing a decade of increasing their mandated use.
The new regulations cap biofuel use as part of the transport energy mix at 7 percent, with individual EU countries having the option to reduce it further; prior to the change, the biofuel percentage was expected to rise to about 8.6 percent by 2020. The numbers, however, are not really important as actual biofuel use—which typically lags the mandate no matter where it is imposed—has been declining in Europe, and registers just 4.7 percent of energy resources now.
There are two reasons Europe is turning away from biofuels. The most obvious one is that biofuel crops compete with food crops for a finite amount of growing space. Europe, having been more or less fully developed for the past couple of centuries has no room to expand agriculture, and so the “don’t burn food for fuel” advocacy found an attentive audience.
What may have provided the final push for the EU to modify the biofuel target was a joint study released on March 24 by the EU’s Joint Research Center and the US-based International Food Policy Research Institute, which found that the emissions-reducing benefits of increasing biofuel use are largely overstated. Biofuels do definitely reduce greenhouse gas emissions from vehicles, but the increase in emissions from the process of producing biofuels reduces, and in some areas, can even completely cancel out those benefits. The measure, which is called indirect land use change (ILUC) emissions, varied from an increase of 3 percent and even as much as 62 percent, depending on the scenario (such as differences in crop yields, food consumption rates, commodities prices, and so on).
To be precise, the EU is not completely giving up on biofuels—to the consternation of some environmental groups like Friends of the Earth, which has tagged biofuels as a “false solution” to climate change—but simply setting a limit on their use. Beyond the 7 percent limit, or so the bright minds who advise EU parliamentarians have apparently determined, the returns from using biofuels diminish quickly.
Biofuels suddenly becoming unfashionable presents a quandary for Philippine policymakers. Of the reasonable alternatives the country could pursue in order to tackle its problem of ludicrously excessive vehicular emissions – the others include alternative fuels such as liquefied natural gas (LNG) or hydrogen, and hybrid or fully electric vehicles – biofuels are the most economical option.
In the Philippines, the mandated proportion of ethanol in gasoline was raised to its current 10 percent (E10, in technical shorthand) back in 2012; in 2020, it is supposed to be raised to 20 percent. For diesel fuel, the biodiesel proportion is currently set at 2 percent; the Department of Energy plans to raise that to 5 percent sometime this year. According to a report by the Global Agriculture Information Network (GAIN)—an office of the US Department of Agriculture—published last October, biodiesel production in the Philippines is adequate to meet the mandated targets, largely because there is greater variety in the sorts of feedstock that can be used to produce it.
Ethanol production, on the other hand, is problematic. The GAIN report points out that the country is nowhere near meeting the E10 standard on a national scale, and is falling behind in building new ethanol production capacity. The country currently can only produce about 17 percent of its ethanol needs, even in falling short of the E10 standard. To increase production to meet the programmed standards now and after 2020 while maintaining the current domestic production share, the report estimates that not only will capacity utilization in existing ethanol production facilities need to be increased by several times, at least 16 new plants (of 30 million liters’ annual capacity each) will have to be built in the next five years.
Because much of the Philippines’ ethanol production comes from sugarcane, output is also affected by sugar prices; mills switch production between ethanol and sugar depending on which has the higher price, particularly since on a cost-per-unit basis domestic ethanol is roughly 50 percent more expensive than imported ethanol (and provides correspondingly lower margins for the producer).
Even if prices were not an issue, there is still the matter of the competing needs for farmland between food and fuel production. If the Philippines were to boost ethanol production to any significant degree at all, it would have to import more food—the country simply does not have the useable land area, thanks to decades of poor planning, nor the technical prowess to produce enough of both at the same time.
The ethanol mandate in the Philippines is hopelessly optimistic, and as the recent European research suggests, may even be counterproductive, particularly in a country where the supply of electricity and water—two big inputs that generally drive up ILUC emissions even under the best of circumstances—can sometimes be extremely problematic. While the country needs all the help it can get in reducing emissions, and should follow the EU’s lead in not completely rejecting biofuels as a partial solution, it ought to reconsider whether the point of diminishing returns has been reached, or will be soon, and start looking for other answers.