The EU's agrofuel folly: policy capture by corporate interests

Written by Corporate Europe Observatory

Monday, 11 June 2007

Briefing paper, Corporate Europe Observatory (CEO), June 2007 (1)

Despite growing public concern about the risks associated to agrofuels[1], the European Union (EU) is throwing its weight behind the promotion of these often very harmful crops. In March 2007, a proposal set targets to increase the use of agrofuels in all road transport fuel to 10 percent by 2020. The Commission is also planning to channel large amounts of EU public funds towards the research & development of agrofuel projects.

The EU's agrofuel folly has been influenced by the strong lobbying activities of interested industries, such as car-manufacturers, biotech companies and the oil industry. These industries have forged new alliances with each other and in recent years, have been invited by the European Commission to shape EU policy on agrofuels through several industry-dominated advisory bodies. These include the Advisory Research Council for Biofuels (BIOFRAC), CARS21 and more recently the European Biofuels Technology Platform (EBFTP).

The impacts of this one-sided advice are far-reaching. It has affected how the EU is tackling the fundamental problem of reducing CO2 emissions from road transport. Furthermore, the so-called solution threatens to not only exacerbate the problem it aims to resolve, i.e. climate change, but will also create a range of new insecurities and devastation. It could not be further away from effective policy aimed at energy saving and reduced consumption.

The EU Spring Council, meeting 8 - 9 March 2007, proposed, as part of a broader energy package, mandatory targets for 10% use of agrofuels in all road transport fuel by 2020. This almost doubles the current (non-binding) target of 5.75% by 2010. This proposal was presented as a major step to combat climate change.

However, a closer look at agrofuels, reveals a devastating picture; a so-called solution accompanied by a raft of new problems.[2] Agrofuels:

- Compete with food for agricultural resources, and their expansion has already resulted in rising food prices which directly threatens the food security of the world's poorest communities;
- Increase the pressure on land which causes, amongst other things, an increased deforestation rate;
- Are farmed in huge mono-crop plantations, involving intensive use of pesticides and fertilisers, and in many cases with the risk of genetically modified contamination. This threatens biodiversity along with other environmental hazards;
- threaten land rights as they are accompanied by plans for monoculture expansion, which tends to be controlled by big agribusiness and wealthy land owners. This threatens the human rights of small farmers and indigenous peoples across the Global South as they are evicted from their lands or face ill-health, poor working conditions and land conflicts.

Furthermore, to add insult to injury, there is growing evidence that agrofuels are indeed aggravating, not mitigating, climate change.
Was the Commission aware of this before backing agrofuels with a host of policy measures? According to an official Commission impact assessment, completed in 2006, they were.[3] This document mentions that, "increased use of biofuels in the EU will be accompanied by an increased external demand for biofuels and their feedstocks, which is likely to have various effects on developing countries... In addition, there are substantial CO2 losses if grassland is ploughed up or forest cleared. These losses can be expected to outweigh CO2 gains from biofuels for many years." It clearly states that "there will be increasing pressures on eco-sensitive areas, notably rainforests, where several millions of hectares could be transformed into plantations." Among the social effects the paper acknowledges the competition with food, the higher food prices which would hit the poor in developing countries and the pressure on vulnerable communities (to move away or drastically adapt their lifestyles).

The Commission's agrofuel policy has not been driven by the fight against climate change, it has sought to secure energy supply and serve the needs of large farmers and agribusiness, alongside the automotive, oil and biotech sectors, all with a direct interest in maintaining the existing status quo. The Commission has enabled these corporate interests to enter into the policy dialogue and design policy outcomes, by setting up advisory groups with a clear industry bias.

Corporate advise for corporate benefit

The Biofuels Research Advisory Council (BIOFRAC) was created by DG Research in early 2005. A "group of high level experts representing widely different sectors of the biofuel chain" was invited "to develop a foresight report - a vision for biofuels up to 2030 and beyond, to ensure a breakthrough of biofuels and increase their deployment in the EU."[4] In addition to this 'foresight report', the Commission also invited BIOFRAC to prepare the ground for the so-called 'Strategic Research Agenda', and to provide considerable input for the Seventh Framework Research Programme (FP7), the EU's main instrument for funding research in Europe from 2007 to 2013.

Membership of BIOFRAC (now dissolved) was unbalanced, dominated by specific corporate interests. The automotive industry was represented with four members, oil; three, biofuel; three, and biotech with lobby group EuropaBio. One member from the food industry, one from a forestry company and one from an energy company, one farmer representative and eight from research centres or universities (some with very close links to the oil and biotech industry) completed participation. According to the Commission, members were appointed as individuals, on the basis of their knowledge and expertise, and not as representatives of their organisations. However, it is not unreasonable to assume their role and their recommendations would be reflective of the corporations or organisations for which they work. Indeed BIOFRAC's corporate-bias was clearly reflected in its final report, issued in June 2006, "Biofuels in the European Union. A vision for 2030 and beyond".[5] The report is an official Commission document.

Biofuels in the European Union. A vision for 2030 and beyond.

"VISION. By 2030, the European Union covers as much as one quarter of its road transport fuel needs by clean and CO2-efficient biofuels. A substantial part is provided by a competitive European industry. This significantly decreases the EU fossil fuel import dependence. Biofuels are produced using sustainable and innovative technologies; these create opportunities for biomass providers, biofuel producers and the automotive industry."[6]

Members of the Biofuels Research Advisory Council
(as for the date of publication of their Vision Report)

Anders Roj, Chair, Volvo Technology Corporation
Olivier Appert, Vice-chair, (substitute: Alexandre Rojey) Institut Francais du Petrole
Javier Salgado, Vice-chair, (substitute: Ricardo Arjona) Abengoa Bioenergy
Olivier Alexandre, Total
Michel Baumgartner, British Sugar
Gerard Belot, (substitute: Beatrice Perrier Maurer) PSA Peugeot Citroen
Dirk Carrez, EuropaBio
Matthias Rudloff, (substitute: Michael Deutmeyer) CHOREN
Ann-Britt Edfast, SVEASKOG
Hartmut Heinrich, (substitute: Frank Seyfried) Volkswagen AG
Raffaello Garofalo, European Biodiesel Board
Dietrich Klein, COPA-COGECA
Darran Messenm, SHELL
Calliope Panoutsou, CRES
Kimmo Rahkamo, (substitute: Ari Juva) Neste Oil Corporation
Meinrad Signer, Iveco Powertrain
Rene Van Ree, ECN
Guy Riba, (substitute: Ghislain Gosse) INRA
Liisa Viikari, VTT Biotechnology
Eckhard Weidner, Fraunhofer UMSICHT
Arthur Wellinger, Nova Energie
Grzegorz Wis'niewski, (substitute: Magdalena Rogulska) EC-BREC
Guido Zacchi, Lund University

A striking ambition stands out in the report, to fulfil a 25% of the EU road transport fuel with agrofuels by 2030. Apart from that, the report heavily promotes second generation agrofuels. In general, those aim to improve the performance, usually using the whole plant and therefore improving the CO2 balance and costs.[7] According to BIOFRAC, these second generation agrofuels, will be produced from a wider range of raw materials, reduce competition for land and food, and will help to reduce costs of "saved" CO2. To conclude, the report recommended the establishment of a Biofuels Technology Platform that would coordinate all the Commission's work on agrofuels, and "provide an agreed analytical base to assist all Commission services concerned (e.g. Directorates-General Research, Energy and Transport, Trade, External Relations, Agriculture and Rural Development, Environment and Economic and Financial Affairs)."

On 7 June 2006, with its mission accomplished, BIOFRAC was dissolved. On the same day, in line with the recommendations in the Biofuels Vision Report, a steering committee of the European Biofuels Technology Platform (EBFTP) was appointed and the new Platform was officially launched a day later, in Paris. The EBFTP mission is "to contribute to the development of cost-competitive world-class biofuels technologies, to the creation of a healthy biofuels industry and to accelerate the deployment of biofuels in the European Union through a process of guidance, prioritisation and promotion of research, development and demonstration."[8]

A key role of the EBFTP is the elaboration of the EU's Strategic Research Agenda (SRA) on agrofuels. This means identifying key research working areas for the next 10 years, in order to achieve the Vision 2030 designed by BIOFRAC. According to the EBFTP, its main objective is to implement the major proposals outlined in the BIOFRAC's Vision report.[9] The Commission pays for the Secretariat, which includes funding the website, meeting general administrative costs and setting up a Stakeholder Plenary Meeting.

The Platform is composed of five working groups and a steering committee. A few months before the launch of the EBFTP, the Commission invited "expressions of interest for membership of the steering committee and working groups" of the EBFTP, announcing it to be "open to the active participation of all stakeholders".[10] The EBFTP was promoted as a means to "bring together research institutions, companies, NGOs, financial entities and regulatory authorities at European Level". However, the actual composition of the Platform is now heavily dominated by industry. The European Environment Bureau's (EEB) had earlier on complained about BIOFRAC's industry bias and had called on the Commission "to address this imbalance in the composition of the Steering Group for the Biofuels Technology Platform", a call that went ignored.[11]

Despite rhetoric about open participation, the membership of the Platform was a stitch up from the start. To begin with, steering committee members were selected by BIOFRAC's Chair (Anders Roj from Volvo) and Vice chairs (Olivier Appert from the Institut Francais du Petrole and Abengoa Bioenergy's CEO Javier Salgado), in consultation with the Commission. Perhaps not surprisingly, the resulting EBFTP steering committee is dominated by industry.[12] As with BIOFRAC the oil and automotive industries have highest representation in the steering committee, with three members each. They are followed by biotech with two, forestry with one, energy with one and food with one. Then joined by one farmer representative and four from research/university centres. The Steering Committee is chaired by Luis Cabra of Spanish oil company Repsol YPF, with Roj and Appert as vice-chairs. There is not a single citizens' organisation representative on the Steering Committee.

Furthermore, at the next tier down, the five working groups are vastly dominated by industry and research centres representatives.[13] Despite promises of multiple stakeholders representation, it is now clear this lack of broad representation is a deliberate choice. According to the Platform newsletter "an adequate balance of industry vs. research/public centers was established in order to preserve the Platform as an industry-led body (italics added)".[14] Over 300 people applied to be part of the working groups. Yet with a maximum of 25 members per group, more than half were excluded. The final outcome is that there are only 2 NGO representatives out of some 125 working group members.[15] The Secretariat has refused to release the initial list of 300 candidates, and Corporate Europe Observatory (CEO) is still waiting for a promised breakdown by backgrounds.

The Commission has ensured that the same companies who shaped the EU's vision on agrofuels through BIOFRAC, are now implementing its recommendations and designing the agrofuels research and development agenda. These are corporations with a direct commercial interest in the development of agrofuels in the EU. The process outlined here shows how they are set to determine a strategic research agenda for this area, and together with the Commission, deciding on the allocation of research and development funds over the coming ten years.

This pattern which connects strategic research to policy is not only confined to agrofuels. The Commission is rapidly creating numerous Technology Platforms in a variety of fields, referring to them as, "proving to be powerful actors in the development of European research policy, in particular in orienting the Seventh Research Framework Programme to better meet the needs of industry".[16] Other Technology Platforms, also industry dominated, that deal with agrofuels, are Suschem (Sustainable Chemistry), Food for Life, Plants for the Future and Forestry.

There is a need for a broader public debate at EU level about the risks associated with agrofuels set in the context of the problem they seek to address. This must involve a wider range of stakeholders, including those directly affected in the global South. Furthermore, the process for determining policy through research and development where public money is passed to industry players with a direct interest in a certain outcome has no democratic justification and must be challenged.

Corporate Europe Observatory (CEO)

Notes:
[1], In this article we use the term agrofuels instead of biofuels, as the latter has unmerited environmentally-friendly connotations. Agrofuels stresses the link with industrial agriculture.
[2]For a more detailed account of the negative impacts of agrofuels see the appendix: Agrofuels: A reality check.
[3] An EU Strategy for Biofuels, Impact Assessment {COM(2006) 34 final}, Commission Staff Working Document, Annex to the Communication from the Commission, Commission of the European Communities, Brussels, SEC(2006) 142
4. Science and Research Commissioner Janez Potocnik quoted in: Biofuels in the European Union. A vision for 2030 and beyond. Final report of the Biofuels Research Advisory Council, Directorate-General for Research, Sustainable Energy Systems, 2006.
5. The final draft report was published 14 March 2006 and a consultation process was then open until April 2006 to react to the draft. We did ask the Commission for the responses received and the answer in May 2007, more than a year after the responses were received, is that the secretariat of the technology platform on biofuels [EBFTP] is working on that and that once it is ready, it will be made public through the website.
6. Biofuels in the European Union. A vision for 2030 and beyond. Final report of the Biofuels Research Advisory Council, Directorate-General for Research, Sustainable Energy Systems, 2006.
7. There is not yet a fixed definition of second generation agrofuels, but some characteristics can be given. They are often defined by the feedstocks (wood, pulp, straw, residues and waste) as opposed to vegetable oils and food crops used in first generation agrofuels. A difference with first generation agrofuels would be that second generation can use the whole plant and not only parts (for instance also using the straw of the wheat). Most common they refer to agroethanol from ligno-cellulosic biomass and agrodiesel from biomass gasification. Main advantages would be not to compete with food, improve the energy performance per hectare and reduce costs. However, sometimes also means 'improved' (genetically modified) agrofuels crops with new traits specific for agrofuel production geared towards producing oil. As most government policies are greatly favouring the development of second generation agrofuels and channeling enormous amounts of money into their research and development, there is a vested interest in being included under the term 'second generation agrofuel'.
8. Newsletter One, European Biofuels Technology Platform (EBFTP), March 2007.
9. Project Overview, European Biofuels Technology Platform website, accessed 29 May 2007.
10. Call for Expression of Interest to participate in the European Biofuels Technology Platform, European Commission website, accessed 29 May 2007.
11. "We see the complete omission of environmental stakeholders in this high level advisory group as a serious imbalance", EEB comments on the public consultation on the Vision Report of the Biofuels Research Advisory Council (BIOFRAC), Brussels, 20 April 2006. The Steering Committee of the EBFTP has not a single environmental NGO. The EEB is member of the working group n4, "sustainability".
12. Membership list for the steering committee of the European Biofuels Technology Platform, EBFTP website, accessed 29 May 2007.
13. Membership list for the working groups of the European Biofuels Technology Platform, EBFTP website, accessed 29 May 2007. 14. Newsletter One, European Biofuels Technology Platform (EBFTP), March 2007.
15. Hans Jager (EEB) and Jean-Philippe Denruyter (WWF) in the working group on sustainability.
16. European Technology Platforms (ETPs) website, accessed 29 May 2007.

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