The GHG balance of biofuels taking into account land use change

Lange M (2011). The GHG balance of biofuels taking into account land use change, Energy Policy, 39, 5, 2373-2385

Abstract

The contribution of biofuels to the saving of greenhouse gas (GHG) emissions has recently been questioned because of emissions resulting from land use change (LUC) for bioenergy feedstock production. We investigate how the inclusion of the carbon effect of LUC into the carbon accounting framework, as scheduled by the European Commission, impacts on land use choices for an expanding biofuel feedstock production.

We first illustrate the change in the carbon balances of various biofuels, using methodology and data from the IPCC Guidelines for National Greenhouse Gas Inventories. It becomes apparent that the conversion of natural land, apart from grassy savannahs, impedes meeting the EU's 35% minimum emissions reduction target for biofuels. We show that the current accounting method mainly promotes biofuel feedstock production on former cropland, thus increasing the competition between food and fuel production on the currently available cropland area.

We further discuss whether it is profitable to use degraded land for commercial bioenergy production as requested by the European Commission to avoid undesirable LUC and conclude that the current regulation provides little incentive to use such land. The exclusive consideration of LUC for bioenergy production minimizes direct LUC at the expense of increasing indirect LUC.

Conclusions

We analyzed the EC’s current sustainability regulations for biofuels with respect to LUC. The Renewable Energy Directive (RES-D) aims to control direct LUC by entirely excluding peatland, natural forest and other high–biodiverse land from the conversion to bioenergy crop production.

To monitor the emission saving target of 35% when compared to fossil fuels, the emissions from direct LUC for bioenergy crop cultivation need to be added to the process emissions of the biofuel option. We highlighted the consequences of including LUC into the carbon accounting frame- work. We found that the conversion of natural land for bioenergy production almost never meets the minimum emissions reduction target of 35% and in most cases even leads to much higher emissions than the use of fossil fuels. Consequently, concerns about the protection of high conservation value areas would automatically be resolved since the integration of LUC emissions would already prohibit the use of such areas.

The identification of high biodiversity hotspots is necessary only for grassy savannahs, especially in Brazil as it is classified as natural land with a small vegetation cover but often a high level of biodiversity. The precise identification and distinction between different types of natural savannah-like vegetation is of particular interest to the Brazilian sugarcane production, as the high energy productivity of sugarcane results in emission savings when converting grassy savannah.

In addition, we found that the current arrangement of the RES- D predominantly promotes crop production for bioenergy on land already in crop production. Hence, the current certification requirements would increase the competition between food and biofuel production. To avoid such a competition effect between food and fuel production, the EC aims at promoting the expansion of bioenergy production on degraded land by granting an emission bonus for biofuel crops planted on such land.

Our results support such a policy. Our examples showed that – apart from growing biofuel feedstocks on normal and designated croplands – degraded grassland is the only option for Argentinean soy, German wheat and canola, and US wheat in order to achieve the minimum reduction target of the RES-D.

Nevertheless, we critically examined whether it is profitable, even with the degraded land bonus (a carbon balance bonus given to eroded or salinated land), to use such degraded land for commercial bioenergy use since degraded land is most likely to be less productive than normal cropland and requires investment costs for the restoration of the area. By assuming that a market premium is paid for a biofuel option with higher emission savings the degraded land bonus serves as an indirect subsidy.

We showed how under the current arrangement the subsidy per hectare of degraded land falls with the level of degradation. Therefore, it is likely that only limited incentives for using such land are created, since the bonus becomes very small for higher levels of degradation. The current arrangement should be changed into an incentive system that increases with the level of degradation and is high enough to make the use of degraded land more profitable than the use of cropland for bioenergy crop production.

Our results illustrate that the accounting for LUC in sustainability requirements for bioenergy production creates incentives to use cropland for bioenergy production and – as a consequence – to convert natural land or pasture for other agricultural uses such as food production. In other words, the current regulatory system taking LUCs into account minimizes direct LUC at the cost of increasing indirect LUC.

We have so far not come across a convincing proposal to implement indirect LUC into the LUC assessment of biofuels because of the underlying complex global land use dynamics. Instead, we propose subjecting all agricultural activities to a carbon accounting system. Hence, the burden of LUC would always be imposed upon the activity replacing the previous type of land use.

Thus, all LUC would, by definition, be direct LUC. Unfortunately, the implementation of a global system of GHG accounting for all agricultural products still seems a long way off. However, in the meantime, the risk of indirect LUC through biofuels can be reduced by promoting high energy productive crops and biofuel feedstock production on degraded land.

Finally, it needs to be pointed out that the LUC as well as the indirect LUC problems of biofuel production need to be considered in the context of an increasing scarcity of the globally available land area with several competing uses. The rising world population with an increasingly milk and meat intensive – and thus land intensive – diet will likely require an expansion of agricultural areas at the expense of other land uses. Erb et al. (2009) show that the bioenergy potential, the development of agricultural production technologies and the shift to a more vegetarian diet are closely interrelated with respect to their demand for fertile land.

Thus, the land use change following an increasing biofuel feedstock production would be smaller the less area were needed for food and feed production, which in turn depend on diets and the advance in agricultural productivity. Consequently the degree by which the European regulations aggravate the competition between food and fuel by promoting biofuels mainly from agricultural areas depends in the long term strongly on the development of global diets and investments in agricultural technologies.