Challenges and Recommendations for Improved Identification of Low ILUC-Risk Agricultural Biomass

Abstract

The “low indirect land use change risk” (“low ILUC-risk”) concept was developed to assess whether crop-based biofuels would compete with other land uses and cause the expansion of agricultural land. At the core of low ILUC-risk is an “additionality principle”, which requires that biofuel feedstock receive special treatment only if it is produced over and above the business-as-usual baseline. This paper examines and tests the European Commission’s methodology for calculating the baseline for yield improvement projects, by applying it to publicly available Eurostat data at national and NUTS2 scales. We assess from a statistical perspective how variation in regional yield trends would lead to differences in the long-term outcomes of low ILUC-risk certification; we conclude that, as currently designed, the methodology would over-state the amount of additional production in some cases and could hence incentivise the diversion of crops from other uses into the biofuel sector. We introduce the terms “tailwind additionality”, “headwind additionality”, and “additionality ratchet” to characterise the phenomena which contribute to this outcome. Our results lead us to recommendations which may enhance both the attractiveness and the robustness of the low ILUC-risk system.