Biofuels possibly have a negative impact on the concentration of greenhouse gases (GHGs) in the atmosphere under current EU regulations.

Using cultivated land to produce the biomass for biofuels results in new land being cleared for the purpose of producing food. In extreme cases, the new land cleared is in tropical forests. Since this can generate considerable amounts of GHGs, the use of biofuels under the current regulations hardly helps the climate. Only by reforming the sustainability requirements for producing biofuels, will they have a positive benefit. This is the main finding of a study conducted by Mareike Lange, of the German Kiel Institute for the World Economy, which she has published together with Dominique Bruhn as a Kiel Policy Brief.

The authors say biofuels remain an important element of the EU strategy for reducing GHGs. The EU plans to be able to use renewable, nonfossil energy sources to cover at least 10 percent of energy used in the transportation sector by 2020, and biofuels are the most important such source.

However, biofuel production is problematic, as it requires the use of land to produce biofuel crops. If land previously used for food crops is used for biofuel crops, a situation ensues in which biofuel crops compete with food crops for cropland (fuel versus food). The use of previously uncultivated land, e.g. forests, savannas, and grasslands, to produce biofuel crops (i.e., a direct change in land use to produce biofuels) emits considerable amounts of GHGs and results in a loss of biodiversity and habitats as well.

The contribution that biofuels produced using previously uncultivated land make to protecting the climate is virtually nil. GHGs are also emitted, however, as mentioned above, when previously cultivated land is used to produce biofuel crops, as this results in new land being cleared for the purpose of producing food (i.e., results in an indirect change in land use).

Current EU sustainability requirements pertaining to the production of biofuels provide incentives to minimize direct changes in land use and thus the ecological and climatic consequences that such changes engender, but these requirements motivate indirect changes in land use. “It is at least questionable whether these requirements actually contribute to reducing GHG emissions,” says Mareike Lange. They should be changed to provide incentives to produce biofuel crops on degraded lands, for example, on saline lands, contaminated lands, and eroded lands. Incentives should also be provided to produce more biofuel crops with a particularly high energy content per acre.

In order to resolve the problem of indirect changes in land use, not only biofuel crops but also all agricultural products should also be priced so as to include the climate damage costs that their production generates. This would be the only effective way of using prices to protect the climate.

Kiel Policy Brief No. 17 (In German: download and then upload document in Google Translate, which does a pretty good job with the text)