A model‐based quantitative assessment of the carbon benefits of introducing iLUC factors in the European Renewable Energy Directive

Abstract

AbstractThe European Commission has a mandate from the EU's Renewable Energy and Fuel Quality Directives to propose a methodology, consistent with the best available science, to address indirect land use change (iLUC). One proposed solution to the iLUC problem is the application of iLUC factors in European fuels policy – it is widely expected that should the EU adopt such iLUC factors, they would be based on iLUC modelling using the International Food Policy Research Institute's (IFPRI) MIRAGE model. Taking the iLUC factors from IFPRI MIRAGE as our central estimate, we use Monte Carlo analysis on a simple model of potential biofuel pathways for Europe to assess the likely average carbon saving from three possible European biofuel policy scenarios: no action on iLUC; raised GHG thresholds for direct emissions savings; and the introduction of iLUC factors. We find that without iLUC factors (or some other effective iLUC minimization approach) European biofuel mandates are unlikely to deliver significant GHG emissions benefits in 2020, and have a substantial probability of increasing net GHG emissions. In contrast, the implementation of iLUC factors is likely to significantly increase the carbon savings from EU biofuel policy. With iLUC factors, it is likely that most permitted pathways would conform to the Renewable Energy Directive requirement for a minimum 50% GHG reduction compared to fossil fuels.