The use of biomass for energy production is rising globally in parallel to increasing oil prices, and concerns about energy security, and climate change. Many countries recognize biomass as a domestic energy resource, and some see opportunities for exports of liquid biofuels. With political goals of e.g., the EU to increase the use of biofuels in the transport sector from a current rate of 2% up to 10% in 2020, and domestic biofuel quota systems being introduced in many other countries as well, there is little doubt that biomass use for liquid transport fuels, as well as for electricity and heat production, will continue to rise in the future, and that global trade with bioenergy will rise in parallel. This will pose both opportunities and risks for sustainable
development for regions, countries, and the world as a whole. In this context, the German Federal Environment Agency (UBA), on behalf of the Federal Ministry for Environment (BMU), funded research on sustainable global biomass trade, carried out by Oeko-Institut and IFEU. This “bio-global” project covers methodical aspects concerning climate protection, biodiversity, water and land use, but also aspects related to bioenergy trade and legal issues (e.g., WTO, bilateral agreements). A key element in that research is to consider and elaborate on opportunities for sustainable biomass feedstock provision which have no negative or even positive environmental, biodiversity, climate, and social trade-offs. With regard to the greenhouse-gas (GHG) emission balance of bioenergy, the possible effects of direct and especially indirect land use changes (ILUC) associated with cultivating biomass feedstocks are vigorously discussed in section 2. The core of this paper introduces a deterministic approach developed by Oeko-Institut within the Bio-global project to include GHG emissions from ILUC in regulatory policies for biofuels (Section 3), and updates previous versions of this paper which have been published earlier by introducing a revised 2005 iLUC factor estimate (Section 3.2), and giving an outlook to the range of possible future iLUC factor values from 2010 to 2030 (Section 3.3). The paper further discusses briefly policy options to include an iLUC factor in regulatory schemes for biofuels (Section 4), sketches approaches to “offset” ILUC emissions (Section 5), and alternative policy concepts which avoid quantifying ILUC effects (Section 6). Finally, some conclusions are drawn and future work on ILUC is outlined (Section 7). The Annex gives the data background for calculating the iLUC factor.

By: U. Fritsche, K. Hennenberg, K. Hünecke (Öko-Institut)

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