EU Fails to Learn Lessons From Past RED Failings

Errors in EU’s GHG calculations identified by German researchers in 2011 & 2012 have never been corrected in Brussels

Much of the current debate around the Renewable Energy Directive (RED) treatment of palm oil is focused on trade: the fact that the proposed ban on palm oil infringes WTO rules; that RED may lead to a wider trade war; and that existing business contracts may even be at risk.

Aside from the international ramifications, it is worth revisiting the science behind the RED – and in particular the science relating to palm oil. This is the third iteration of the RED: and it is instructive to examine errors from those earlier EU Directives, that have not been corrected.

Palm Oil producers have consistently argued that the greenhouse gas (GHG) savings of Palm Oil were undervalued in the EU’s calculations. This undervaluing negatively impacts Palm Oil’s position within the EU marketplace, compared to competitor oils.

How are these values determined?

The RED judges the environmental benefits or harms of different biofuel feedstocks through calculating ‘typical values’ and ‘default values’, which represent the EU’s opinion on the level of GHG savings that each feedstock contributes.

Therefore, the current RED’s default value of 25% (illustrated in the table below) for Palm Oil indicates that the EU would apply the assumption that Palm Oil saves 25% of GHG emissions, compared to fossil fuels. It is interesting to highlight that the values for rapeseed oil are amplified, and significantly inflated compared to those of Palm Oil. This has been the case throughout all iterations of the RED, which is both strange and worrying.

Why is it strange and worrying? Because the EU’s calculations were proved wrong as far back as 2011-2012.

Two studies published by scientists at the University of Jena, in Germany, in 2011 and 2012 identified major flaws and significant errors in the RED calculation of oilseed GHG savings. Drs Gernot Pehnelt, and Christoph Vietze’s independent analysis Recalculating Default Values for Palm Oil concluded that the EU has consistently under-valued the GHG savings of Palm Oil, and over-valued the GHG savings of rapeseed. They  concluded that a more accurate default value for Palm Oil is between 37.3% and 45.5% – far exceeding the 19% default value given to Palm Oil under the original RED and also exceeding the 25% default value given to Palm Oil under the current RED revision.

The table below sets out the most simple method of summarising the papers’ findings.

 

  Initial RED default value RED Revision Default Value University of Jena Report GHG Savings Calculation
Palm Oil biodiesel without methane capture 19% 25% 37.3% – 45.5%
Palm Oil biodiesel with methane capture 56% 51% 76.4%
Rapeseed biodiesel 38% 47% 28.0% – 42.1%
Sunflower biodiesel 51% 52% n/a
Soybean biodiesel 31% 50% n/a

What does this mean in practice?

First, these initial errors in the EU’s calculations added up to an unfair discrimination against Palm Oil within the RED Directive. The German study concluded that the EU’s Joint Research Centre (JRC) calculations were biased in favour of EU-grown rapeseed and against imported palm oil. The authors wrote a damning assessment:

“Unfortunately, the conclusions of this analysis demonstrate that the methodology employed by the JRC lacks credibility, and subsequent efforts to gain further clarity from the JRC were not successful. As a result, the authors of this report support the efforts by environmental NGOs to gain further clarity on the European Commission’s and EU’s calculations and deliberations on the assessment of biofuels, and institute greater transparency in the process.”

 “Based on the standard calculation scheme proposed by the Renewable Energy Directive (EU 2009) … we cannot reproduce the default values for palm oil biodiesel given in the annex of the RED. In contrast, our results indicate default values for the GHG emission savings potential of palm oil biodiesel not only far above the 19 percent default value but also beyond the 35 percent threshold. Our results confirm the findings by other studies and challenge the official default values published in RED. These findings … give cause for serious concern within the EU community regarding the viability of the system to effectively deliver the GHG emissions savings that are required in the legislation.”

 Second, a separate detailed examination Uncertainties about the GHG Emissions Savings of Rapeseed Biodiesel, focused on the rapeseed values given by the JRC, found that they had been over-stated – thereby doubling the bias in the RED text.

The authors explain:

“In most of the scenarios, rapeseed biodiesel does reach the GHG emissions saving values according to RED. Neither the RED typical value for rapeseed oil (45%) nor even the lower default value (38%) can be approved by our analysis.

 “Furthermore, the most of our scenarios indicate that rapeseed biodiesel does not reach the 35% threshold required by the EU Directive for being considered as sustainable biofuel. In our standard scenario, we calculate a GHG emissions saving value of not even 30% which is not only well below the GHG emissions saving values (default and typical) that can be found in RED but also far below the 35% threshold.

 “To summarize, we are not able to reproduce the GHG emissions saving values published in the annex of RED. Therefore, the GHG emissions saving values of rapeseed biodiesel stated by the EU are more than questionable. Given these striking differences as well as the lack of transparency in the EU’s calculations, we assume that the EU seems to prefer ‘politically’ achieved typical and default values regarding rapeseed biodiesel over scientifically proven ones”

The cumulative impact of the scientific analyses on different feedstocks illustrate that the scientific process is flawed at best (highly biased at worst), and that political decision-making to favour EU oilseeds is driving RED.

Most importantly for the current RED debate, it is clear that these errors and biases have not been addressed or corrected in the 7 years since they were first discovered and established; meaning that the same discrimination against Palm Oil continues today.

The clear suspicion is that such a major error is not simply an oversight but rather a deliberate attempt to undermine foreign oilseeds entering the EU market. If it was a genuine mistake back in 2011 then surely the EU Commission would have corrected by now? They have not done so: the errors have become a permanent, underlying part of the RED. The only sensible conclusion is that Brussels is comfortable – perhaps even happy – with the distorted calculations and is therefore never planning to correct them.

While the University of Jena academics focused on the scientific methods and calculations behind the RED, other experts have addressed the political causes of discrimination against imported oilseeds.

Brussels think-tank the European Centre for International Political Economy (ECIPE) analysed the RED as a potential trade barrier in 2012. In The Rising Trend of Green Protectionism, author Fredrik Erixon wrote:

“The only way to raise barriers to foreign competitors is to engineer non-tariff barriers. Unsurprisingly, this is exactly what the RED may do. It is, in trade policy parlance, a technical regulation that has laid the ground for closing off the EU market for the two main [imported] competitors to biodiesel made of [EU-grown] rapeseed: soybean oil and palm oil. The Renewable Energy Directive adds a new type of policy to Europe’s box of trade restrictive measures in biofuels: a production and process methodology standard.

 “Regulating sustainability in the biofuels sector is no doubt a legitimate policy. But the design of RED does it in a way that will be ineffective and clash with important rules of world trade”

Again, this inbuilt bias has not been corrected – and the same harmful approach can be viewed clearly in the current RED proposal.

Clearly, this all has a negative impact on Palm Oil producers – and on 650,000 small farmers in Malaysia who rely on the crop. However, the persistent errors and discriminatory calculations against Palm Oil over the years – left uncorrected – have led to where we find ourselves today. Facing a potential total ban on Palm Oil biofuels inside the EU.

Such a ban would harm consumers (driving up prices); harm the environment (more land would be cleared for other oils to replace Palm Oil); and it would harm the entire objective of the RED (harming the ability of Member States to achieve their GHG reduction targets)

Science-based policymaking should be at the heart of any renewable energy policy, anywhere in the world – and a critical element to the scientific method is understanding past errors and correcting them for the future. The EU has failed to do this, and continues to cling to the flawed, dis-proven methods of the past. As long as this persists, no-one in Brussels can seriously claim to be an ‘honest broker’ when it comes to Palm Oil biofuels.