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Sustainability and cautious approach are key to future of biofuels says Gallagher Review

Transport Secretary, Ruth Kelly, and Environment Secretary, Hilary Benn, today set out a new approach to biofuels based on recommendations from the Gallagher review, including that the introduction of biofuels in the UK should be slowed down to take into account emerging scientific evidence about their sustainability.

The review, commissioned by Ruth Kelly in February, looked at the wider social and environmental impacts, particularly the indirect impacts of different forms of biofuel production, in order to inform the development of both the UK and EU’s policies.

The key findings of the review, published today, are that:

• Government should “amend but not abandon its biofuel policy”;

• Biofuels can play a role in tackling climate change and “there is a future for a sustainable biofuels industry”;

• By 2020 “biofuels have the potential to deliver annual global greenhouse gas savings of approximately 338 – 371 million tonnes of carbon dioxide”

• However, there is a strong need for further evidence and monitoring to determine the sustainability and wider impacts of biofuels;

• There is a risk that the uncontrolled expansion and use of biofuels could drive unsustainable land use change. In turn this might lead to net increases in greenhouse gas emissions and potentially contribute to rising food prices;

• Current Renewable Transport Fuel Obligation levels are right but we should be cautious about how fast further increases are brought in;

• A moratorium on biofuels should be rejected – “a moratorium will reduce the ability of the biofuels industry to invest in new technologies or transform the sourcing of its feedstock to the more sustainable supplies necessary to create a truly sustainable industry. It will make it significantly more difficult for the potential of biofuels to be realised”;

• At the EU level a 10%, by energy content, renewable transport fuel target is not presently justified by the scientific evidence, but could be possible if a number of important conditions are fulfilled, eg. sufficient controls on land-use change being enforced globally as part of a new climate agreement, and new evidence providing further confidence that the target can be met sustainably.

As a result of these findings the Government will:

• Consult on slowing down the rate of increase in the Renewable Transport Fuel Obligation so that the level of biofuels will increase to 5% by 2013/14, rather than 2010/11.

• Continue to support the EU target of 10% renewable transport fuels by 2020, but argue that the target is conditional on the evidence showing that it is being delivered sustainably and without significant impacts on food prices.

• Press for the 10% target to be kept under regular review in the light of the emerging evidence.

• Press that the sustainability criteria for biofuels, currently being negotiated, should address indirect, as well as direct, effects on land use.

• Beyond Europe, work to establish international standards and controls, which reflect the international nature of the biofuels industry.

Ruth Kelly said: “This Government has always been clear that biofuels can only make a useful contribution to mitigating climate change if they are sustainably produced. I agree with Professor Gallagher that we should take a precautionary approach over the next few years, until we are clearer about their wider effects on the environment. Our policy should be based on the best possible science and as the evidence evolves, so too should our policy evolve with it.”

Hilary Benn said: “It is clearer than ever that we need to break our dependence on oil. To tackle climate change we will need to develop new, cleaner fuels – but that doesn’t mean pushing forward indiscriminately on biofuels that may do more harm than good.

“We need to proceed more cautiously than previously thought, but we should not give up on the potential for some biofuels to help us tackle climate change now and in the future. This isn’t just about our own targets here in the UK – we will be pressing hard in Europe to ensure that any future EU biofuels targets are also conditional on strong sustainability criteria which include the indirect impacts of producing them.

“Any EU target must also be subject to review by 2013/14, so that all emerging evidence can be considered, ensuring that all policies in this new and fast moving field are based on the best available science.”

The Gallagher review has considered recent evidence on the indirect or “displacement” impacts of biofuel production, both within the EU and internationally. It has looked at the extent to which the demand for biofuels – as opposed to other pressures – is likely to put pressure on available land resources in the period to 2020.

It has also considered the likely impact of biofuel policies on international food commodity prices in the period to 2020.

It has made recommendations as to how all of the above should be built into future calculations of the net greenhouse gas impacts of biofuel policies and future biofuel targets.

The UK’s RTFO came into effect on 15 April 2008. It requires road transport fuel suppliers to ensure that 2.5% (by volume) of their total fuel sales is made up of biofuels. The level of the obligation is due to rise to 3.75% in April 2009 and 5% in April 2010.

The EU’s 2003 Biofuels Directive requires Member States to set biofuel targets for 2010, and suggests that these targets should be in the region of 5.75% (by energy content), equivalent to around 7.5% by volume (because biofuels contain less energy per litre than fossil fuels).

The European Commission’s draft Renewable Energy Directive includes a proposed mandatory 10% (by energy content) by 2020 renewable transport fuel target, equivalent to around 13% by volume. This is under negotiation in Brussels as part of a wider 2020 renewable energy package, with agreement due to be reached by the end of 2008. It follows the agreement by EU Heads of Government in March 2007 that 10% of transport fuels should come from renewable sources by 2020, provided that a number of conditions were met (including around the sustainability of biofuels).

For a copy of the Gallagher’s review visit: