March 2010: The International Food Policy Research Institute (IFPRI) has published a report titled “Global Trade and Environmental Impact Study of the EU Biofuels Mandate.” The report is one of four commissioned by the European Commission to assess the impacts of the 10% target for the use of renewable energy in road transport fuels by 2020.
The study uses a global general equilibrium model, separately including numerous first generation ethanol and biodiesel feedstocks, co-generated products, farming techniques, as well as direct, and indirect land-use changes (ILUC) resulting from the mandated increase in consumption of biofuels. Additionally, as the model is global, it also considers different multi- and bilateral trade scenarios.
The results indicate that there is ILUC associated with the EU mandate, but that the mandate will still result in global greenhouse gas (GHG) emission savings of nearly 13 million tons over 20 years. Additionally, the authors find that the mandate will have only a negligible effect on food prices and, concerning biodiesel, even with ILUC taken into account, imported palm oil remains as efficient as European rapeseed. However, the authors warn that ILUC emissions rapidly increase after a certain threshold, eroding the sustainability of the biofuels in question.
The report concludes by noting that significant uncertainties remain, including the extent to which sustainability standards can be effectively implemented and thereby possibly alter the results of the report. IFPRI is a member of the Consultative Group on International Agricultural Research (CGIAR). [The Report]