Fuel for thought

To achieve our long-term vision for a low-carbon transport system in the UK, it is crucial that we maximise the potential of new technologies that help us become less reliant on fossil fuels.

Biofuels have the potential to account for between eight and 12 per cent of the energy used in UK transport by 2020. They can also help meet our target of reducing greenhouse-gas emissions from transport fuels by six per cent.

Over the past five years, the sustainability of biofuels has been the subject of passionate debate. The Gallagher Review, published last July, confirmed that there was a positive future for biofuels but it also made clear that uncontrolled biofuels expansion may increase greenhouse-gas emissions, as well as contribute to higher food prices and shortages.

Both the government and the industry have been funding research to develop greener biofuels and to establish more sustainable supply chains around the world. A cross-government research steering group has commissioned a scoping study to help identify gaps in the research and develop a more strategic approach to R&D in the UK.

This is backed by our funding for research into new low-carbon technologies. For example, the government recently provided £20m for the launch of a Sustainable Bioenergy Centre, a hub of academic and industrial research partners. The UK was also one of the first countries in the world to establish a sustainability reporting system. Data from our Renewable Fuels Agency shows that 99 per cent of UK biofuels comply with its voluntary sustainability criteria, known as the qualifying standard.

Although this standard does not account for the indirect impacts of biofuels, our biofuel industry may be able to exploit its environmental expertise in European markets when the EU adopts mandatory biofuel sustainability standards next year.

The UK has also been instrumental in pressing the European Commission to recognise the important issue of indirect land-use change.?

In the US, the Air Resources Board recently stated that the greenhouse-gas savings of US corn-based ethanol were virtually wiped out by indirect land-use change. This is likely to be caused by the corn production diverting new agricultural land into the production of soya beans in areas of rain forest.

Similarly, tallow is an animal-waste product that has traditionally been used as a fuel in the meat industry. Now it is being sold on as a biofuel component, the meat industry may be using dirtier fuel-oils with higher carbon-content than before. This can be seen as another undesirable indirect effect of a biofuel.

Other biofuels are highly unlikely to cause indirect land-use change.  For example, if a biodiesel can be produced from waste destined for a landfill, then it would not cause any negative indirect effects.  This is because it does not require any land and therefore does not displace existing agricultural production.  In fact, this production pathway has positive indirect effects because utilising the waste means it does not sit in a landfill site and emit methane.

A lot of people are looking at whether algae can be used for biofuels.  This is another exciting technology that could eliminate any indirect land-use change.  Algae has the potential to be grown on seawater or wastewater, as well as on unproductive non-arable land. That is why we have put funding of up to £6m in the Carbon Trust's algae and pyrolysis research programme.

The EC will produce a report on indirect land-use change by March 2010 and, if appropriate, will also establish a new methodology to help tackle the problem.

This is a great opportunity for UK industry, government and environmental NGOs to push as hard as possible for even more robust Europe-wide indirect sustainability standards, which will be mutually beneficial as we move forward.

Failure to properly account for indirect land-use change is perhaps the single biggest threat to the global biofuel industry.

Unless we can work together to properly account for ILUC we may see another backlash against biofuels and another call for a moratorium on biofuel production. This would create both losers in the industry and a lost opportunity to tackle climate change from a rapidly emerging renewable technology.

This is why the UK government is taking action to critically appraise the various options for accounting for ILUC and wants to share your knowledge and expertise going forward.

We need to unite to develop the most practical and evidence-based proposals for accounting for indirect land-use change. We also need to speak, where possible, with a single voice to the European Commission in calling for a workable solution.

That is why we are focusing on securing a thorough methodology to account for indirect land-use change and so help underpin investor confidence in the British biofuel industry in the years ahead while genuinely reducing greenhouse-gas emissions.

This summer we intend to set out our wider plans for reducing greenhouse gases from transport, in our carbon-reduction strategy.

Biofuels will constitute an important part of the mix of new technologies that will contribute to greener transport, including the potential to reduce emissions in shipping and aviation.

By working together, we can ensure that biofuels play a leading role in addressing climate change and that Britain's biofuel industry continues to play a leading role in their success.