The European Commission has watered down proposals to reduce the indirect climate impact of biofuels, but is sticking to a strict new limit on the amount of food crops that can be used to make fuel, draft legislation showed. The late changes mean that fuel suppliers will not, as originally planned, be held accountable for the indirect emissions biofuels cause by displacing food production into new areas, resulting in forest clearance and peatland draining known in EU jargon as ILUC. "The 5 percent limit is still in, but the ILUC factors are now purely for reporting purposes and not part of the sustainability accounting rules for biofuels," one EU source involved in the discussions said.
http://www.reuters.com/article/2012/10/16/us-eu-biofuels-idUSBRE89F0SB20121016