Biofuels have the potential to provide a renewable source of fuel while delivering a reduction in greenhouse gas emissions. There is a risk, however, that unregulated production may cause social and environmental damage and lead to a net increase in carbon emissions. This is particularly true if the feedstocks used to produce the fuels are grown on land which previously held high carbon stocks such as forest or peatland. As well as this direct impact, there is also potential for indirect effects if competing land uses are displaced by biofuel production. UK biofuels policy to date has included mechanisms to encourage carbon reduction and greater levels of sustainability. The RTFO was the first instance in the world of monitoring and regulating the supply of biofuels.

How biofuels can reduce greenhouse gas emissions

Biofuels offer the potential to reduce greenhouse gas emissions because the carbon in the plant matter from which biofuels are produced comes from the carbon dioxide absorbed by the plants from the atmosphere during their lifetime. This is in contrast to the carbon in fossil fuels which has been locked up under the ground for millions of years, and which is released into the atmosphere as carbon dioxide when the fuels are burnt.

At their best biofuels can lead to significant savings compared with fossil fuels, however the greenhouse gas emission reduction compared to fossil fuels is not 100% for several reasons. Firstly, carbon savings are partially offset by the energy that is needed for cultivation, harvesting, processing and transportation of biofuels. This can represent a substantial fraction of the total energy released from processed biofuels, and varies significantly between different crops. In the worst case scenario, the production process may actually take more energy than can be redeemed when the biofuels are used, completely undermining any possible environmental benefits.

Secondly, there may be carbon emissions associated with changing the usage of land to biofuel crop cultivation. For instance, if areas that have not been previously cultivated, such as forest land, are converted to produce biofuels then there may be very significant immediate releases of carbon stored in the existing plant life and in the soil. These land use change effects may prevent biofuel plantations from generating an overall reduction in carbon emissions until many decades of crops have been produced. This situation is further complicated by the issue of indirect land use change (iLUC), where the impacts of cultivating biofuel feedstocks can be at several steps of removal and therefore much harder to measure and track. This makes it difficult to build up an accurate picture of the full impact of biofuel production. This is why there is a requirement on suppliers to report on the sustainability of their biofuels, and an ongoing research programme investigating the overall effects, both direct and indirect, of biofuels production.

• Norman Baker letter to Commissioner for Energy – 17 February 2011
• Norman Baker letter to Commissioner for Energy – 29 July 2011 (PDF – 76 KB)

Ensuring biofuels come from sustainable sources

Under the RTFO obligated suppliers are required to report on the carbon emission savings and sustainability of the biofuels they have supplied. Suppliers that do not submit a report are not eligible for RTFO certificates; suppliers can however at this stage report unknown biofuel origins, carbon savings and sustainability, in recognition of the difficulty of obtaining this information in the context of existing supply systems. Reporting ‘unknown’ will no longer be permissible as the EU’s Renewable Energy Directive (RED) is introduced with mandatory sustainability criteria. We publish reports outlining the performance of different suppliers and the biofuels they have supplied. Fuel suppliers have been given a detailed methodology for calculating the carbon savings of a variety of biofuels.