Enabling policies for low-ILUC risk value-chains

The low ILUC-risk concept is a basis to certify that additional feedstock can be produced from agricultural systems for biofuel production while avoiding broader market impacts and, most importantly, indirect land use change, thus putting pressure on food prices.

The concept of low ILUC-risk biofuel production is not new. The definition first entered the RED in 2015; since 2018 low ILUC-risk certification has had a defined role in the RED II, elaborated in the Delegated Regulation for ILUC-risk feedstock (2019); and the Implementing Regulation on voluntary schemes and low ILUC-risk certification (2021) lays out a basis for the inclusion of low ILUC-risk certification modules by existing biofuel sustainability standards.

Despite this evolution of the policy environment supporting the shift from concept to implementation, low ILUC-risk biofuel is, arguably, not yet a mature concept.

However, the combination of the factors below has created a new context.

  • the development of project-level certification rules for low ILUC-risk feedstock by the European Commission,
  • the discussion on enhanced renewable energy targets under the Fit for 55 package, and the ongoing debate about RED III.
  • the increased attention on competition between food and fuel due to the war in Ukraine has stimulated renewed interest in biofuel production pathways that can deliver emissions reductions without interfering in food markets.

There is currently a gap between the legislative reality for low ILUC-risk fuels (where the most evident value proposition exists only for low ILUC-risk palm oil) and the conceptual reality, which is that a variety of low ILUC-risk systems can be imagined across a spectrum of feedstocks. The BIKE project seeks to explore the potential for policy action to develop a value proposition for this broader range of low ILUC-risk projects.

BIKE partner EXERGIA has reviewed the existing EU policy regarding low ILUC-risk fuels, looking at the institutional landscape, identifying policies that can enable the development of low ILUC-risk supply chains, and making recommendations for the development of a supporting framework in the EU. The ongoing revision of the Renewable Energy Directive is a great window of opportunity for setting up a more favorable policy environment.

The report can be downloaded here

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