STUDY REPORT ON REPORTING REQUIREMENTS ON BIOFUELS AND BIOLIQUIDS STEMMING FROM THE DIRECTIVE (EU) 2015/1513 by Wageningen Economic Research Netherlands Environmental Assessment Agency (PBL) Wageningen Environmental Research National Renewable Energy Centre (CENER) Authors: Geert Woltjer, Vassilis Daioglou, Berien Elbersen, Goizeder Barberena Ibañez, Edward Smeets, David Sánchez González, Javier Gil Barnó August 2017 Study Report on Reporting Requirements on Biofuels and Bioliquids Stemming from the Directive (EU) 2015/1513 The information and views set out in this report are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use that may be made of the information contained. This Report has been prepared for the European Commission under CONTRACT NUMBER ENER/C1/SER/2015-438/4/SI2.735083 Page 2 of 124 August, 2017 Study Report on Reporting Requirements on Biofuels and Bioliquids Stemming from the Directive (EU) 2015/1513 Table of Contents List of Abbreviations ............................................................................ 5 Executive Summary ............................................................................. 6 1. Introduction ................................................................................. 19 2. Scientific ILUC research review. Overview and Methodology ....... 22 3. Types of ILUC studies and objectives ........................................... 29 3.1.Review Studies ........................................................................ 29 3.2.Partial and General Equilibrium models (PE/CGE) ......................... 31 3.3.Integrated Assessment Models (IAM) .......................................... 33 3.4.Causal Descriptive models (CD) ................................................. 34 3.5.Hybrid-Life Cycle Assessments (LCA) .......................................... 34 3.6.Empirical approaches ................................................................ 35 4. ILUC research outside the EU and US ........................................... 37 5. GHG factors results and evidence in relation to all production pathways ......................................................................... 44 6. General principles of ILUC research ............................................. 54 6.1.Decomposition approach ........................................................... 54 6.2.Stepwise decomposition approach .............................................. 56 6.3.Additional details on the decomposition approach ........................ 59 7. Research results available on the ranges of uncertainty identified in ILUC estimations ............................................................ 62 7.1.Key assumptions ...................................................................... 63 7.2.Uncertainty Analysis ................................................................. 72 7.3.Possibilities to narrow down uncertainty ...................................... 75 8. Different approaches used and results on taking by- products into account ........................................................................ 76 Page 3 of 124 August, 2017 Study Report on Reporting Requirements on Biofuels and Bioliquids Stemming from the Directive (EU) 2015/1513 9. Research results on the possibility of factoring in the impact of EU policies in ILUC estimations. ......................................... 78 10. Availability of research on other indirect effects of the EU biofuel policy. .................................................................................... 81 11. Availability of ILUC research data on impacts of advanced biofuels produced from dedicated energy crops ................................ 83 12. Overview on availability of research on low ILUC-risk biofuels certification and main mitigation options ............................. 84 12.1.Low ILUC-risk biofuels ............................................................ 86 12.2.Feedstock grown on areas that do not compete with food production and that are not used for other purposes .......................... 88 12.3.Increasing the efficiency of agriculture, forestry and bioenergy production chains ........................................................... 90 12.4.Protecting areas with high carbon stock and/or high biodiversity values ......................................................................... 91 12.5.Low ILUC-risk biofuels certification systems ............................... 92 13. Research recommendations ......................................................... 95 14. Conclusions .................................................................................. 98 References ....................................................................................... 100 Appendix 1: Matrix details ............................................................... 110 Appendix 2: Summary Matrix ........................................................... 112 Page 4 of 124 August, 2017 Study Report on Reporting Requirements on Biofuels and Bioliquids Stemming from the Directive (EU) 2015/1513 List of Abbreviations ALCA Attributional Life Cycle Assessment CARB California Air Resources Board CET Constant Elasticity of Transformation CGE Computable General Equilibrium CLCA Consequential Life Cycle Assessment DDGS Dried Distillers Grains with Solubles, by-product of production of maize and wheat ethanol DLUC Direct Land Use Change EU European Union FAO Food and Agriculture Organization EPA United States Environmental Protection Agency EPFL Ecole Polytechnique Federale De Lausanne FAPRI Food and Agriculture Policy Research Institute FSU Former Soviet Union GDP Gross Domestic Product GHG Greenhouse Gas IAM Integrated Assessment Model ICONE Institute for International trade Negotiations (Brazil) IFPRI International Food Policy Research Institute IIASA International Institute for Applied Systems Analysis ILUC Indirect Land Use Change IMAGE Integrated Model to Assess the Global Environment IMAGE-LPJmL Lund-Potsdam-Jena model with Managed Land model included in the IMAGE model JRC Joint Research Centre LCA Life Cycle Assessment LCFS California Low Carbon Fuel Standard LEC Land Extension Coefficients LIIB Low Indirect Impact Biofuels LUC Land Use Change MPOC Malaysian Palm Oil Council OECD Organisation for Economic Co-operation and Development NREAP National Renewable Energy Action Plans (NREAPs) OSR Oilseed Rape PE Partial Equilibrium RED Renewable Energy Directive REDD Reducing Emissions from Deforestation and forest Degradation RSB Roundtable on Sustainable Biomass RFS Renewable Fuel Standard SOC Soil Organic Carbon SRC Short Rotation Coppice UNFCCC United National Framework Convention on Climate Change USA United States of America USDA United States Department of Agriculture WWF World Wildlife Fund Page 5 of 124 August, 2017 Study Report on Reporting Requirements on Biofuels and Bioliquids Stemming from the Directive (EU) 2015/1513 Executive Summary This report was commissioned to gather comprehensive information on, and to provide systematic analysis of the latest available scientific research and the latest available scientific evidence on indirect land use change (ILUC) greenhouse gas emissions associated with production of biofuels and bioliquids. The EU mandatory sustainability criteria for biofuels and bioliquids do not allow the raw material for biofuel production to be obtained from land with high carbon stock or high biodiversity value. However, this does not guarantee that as a consequence of biofuels production such land is not used for production of raw materials for other purposes. If land for biofuels is taken from cropland formerly used for other purposes, or by conversion of grassland in arable land for biofuel production, the former agricultural production on this land has to be grown somewhere else. And if there is no regulation that this must happen sustainably, conversion of land may happen, which is not allowed to be used under the EU sustainability criteria for biofuels. This conversion may take place in other countries than where the biofuel is produced. This is called indirect land use change (ILUC). According to Article 3 of the European Union’s Directive (EU) 2015/1513 of 9 September 2015, the European Commission has to provide information on, and analysis of the available and the best available scientific research results, scientific evidence regarding ILUC emissions associated to the production of biofuels, and in relation to all production pathways. Besides, according to Article 23 of the revised European Union’s Directive 2009/28/EC (RES Directive), the Commission also has to provide the latest available information with regard to key assumptions influencing the results from modelling ILUC GHG emissions, as well as an assessment of whether the range of uncertainty identified in the analysis underlying the estimations of ILUC emissions can be narrowed down, and if the possible impact of the EU policies, such as environment, climate and agricultural policies, can be factored in. An assessment of a possibility of setting out criteria for the identification and certification of low ILUC- risk biofuels that are produced in accordance with the EU sustainability criteria is also required. Page 6 of 124 August, 2017 Study Report on Reporting Requirements on Biofuels and Bioliquids