CO2 EMISSIONS STANDARDS FOR CARS: AGRICULTURE CAN PROVIDE CARBON-NEUTRAL FUELS

In July last year, the European Commission presented a revision proposal for Regulation (EU) 2019/631, setting new CO2 emission performance standards for light-duty vehicles. The proposal aims to reduce CO2 emissions from cars and vans and raise European citizens’ well-being by improving air quality, increasing energy savings, and lowering the cost of vehicle ownership.

While the general climate ambition is indeed the right way forward, the proposal fails to recognise the potential of biomasses. In the context of the current energy and climate crises, if the objective is genuinely one of reducing our energy dependency rather than merely shifting it, it would be even more imperative to use all the renewable resources at our disposal without an ideological bias.

To contribute to European energy independence and climate goals the future CO2 emissions legislation must be technology-neutral, encompassing all engine technologies. Electrical, hybrid, e-fuels and internal combustion engines (ICE) should all be considered in the new regulatory framework, provided they will reach carbon neutrality by 2035. The legislation must account for the entire carbon cycle of our mobility rather than focusing on a narrow-minded full-electric mobility approach.

Having a diversified energy mix becomes even more urgent now that electricity consumption for all usages is booming. While electric vehicles will of course play an important role, some types of mobility will require alternatives in the long run. In this context, biomass is a complementary lever for mobility decarbonisation like we already see today via conventional and advanced biofuels with tangible achievements at an affordable cost.

Looking at the bioenergy sector’s performance in terms of emission savings it is easy to figure out why. In 2020, bioethanol reduced GHG emissions by more than 75% compared to fossil fuels, with the most advanced producers reaching the 90% range. Similar examples in the biogas and biodiesel industry could be mentioned as well. These are not static percentages: they have been increasing each year for the last nine years, making it thus realistic to assume that by 2035 biofuels could reach at least the carbon-neutral — if not carbon-negative — status, as the progress to make is lesser than the progress achieved in the last decade, that took place without significant recourse to new technologies.

New technologies, like precision farming and New Genomic Techniques (NGTs), will help optimise production cycles at the agricultural level by reducing emissions and increasing carbon stock in soils. The adoption of these new technologies will be a cornerstone of the strategy to reach European’s ambition to make the agricultural sector carbon-neutral by 2035 and open the way to attain a carbon-negative status in the following decades. In this pathway, the investment will be crucial, as well as developing new outlets for biomass capitalising on biomass’ unique capacity to transform solar energy and capture carbon via photosynthesis.

The benefits of biofuels in terms of GHG emissions reduction in the transport sector become especially evident when we consider a “well-to-wheel” assessment. This method of emissions assessment includes all emissions related to fuel production, processing, distribution, and use.

Today only “tank-to-wheel” emissions are accounted for, which considers merely the emissions generated by a vehicle’s tailpipe. According to this emissions calculation method, electricity and hydrogen used as fuel in electric and hydrogen cars are today considered carbon-free, even when generated through heavily GHG emissions sources like coal, oil or fossil gas. This aspect is even more worrying considering that fossil fuels accounted for 37% of EU electricity production in 2021, with much higher figures in those Member States reluctant to mobilise nuclear energy.
The current legislation lacks a real correlation between electric vehicles and their impact on the climate and environment in terms of emissions. If today in most Member States, those vehicles can give car drivers a clear conscience is largely because they displace emissions rather than eliminate them.

Therefore, the car emissions regulatory framework must be faithful to the technological neutrality principle, not only in the general principles of the CO2 emission standards for cars but also in the core regulatory framework.

Still, it should be clear that using carbon-neutral biofuels to decarbonise conventional cars would not mean a push-back against electrification. Quite the contrary: ICE cars exclusively fuelled by carbon-neutral biofuels are a necessary complement to the electrification strategy. Indeed, their large-scale adoption would increase the resilience of the EU economy in the face of unforeseeable shocks. Biofuels would help less affluent households, who cannot afford to change their car, access affordable green mobility. They would offer a choice to those drivers whose specific circumstances make electric vehicles non-suitable. All these aspects combined would allow the EU auto industry to remain a world leader in the automotive sector and support the growth of the EU alternative fuels, meaning that jobs will be retained and new jobs will be created – also in the respective value chains (i.e. automotive parts, agriculture, carbon capture).

While investment in other renewable sources remains paramount for attaining Europe’s climate targets, a greener and more independent Europe cannot materialise by betting on a single solution. Shaping a sustainable and diversified energy mix shall be the way forward, with a significant biofuel (liquid and gas) component for all sectors, including the most complex to decarbonise, such as transports.

Agricultural common sense reminds us: let’s not put all our eggs in one basket.

The CAP budget is shrinking fast, removing any leverage for Green Deal investment

Following the Commission proposals on a Green Deal and Farm to Fork strategies, we’ve been hearing too often, including from Vice-President Timmermans, that any negative impacts on farmer’s incomes can be compensated by the Common Agricultural Policy.

The latest concrete example of this argument is in the Commission proposal for a Regulation on the Sustainable Use of Pesticides (SUR). The Commission explicitly says that the additional regulatory costs could be compensated by the CAP budget. The financing of the new RePowerEU’s ambition on biomethane could also be mentioned. 

There are however two problems with this approach “CAP pays it all”. 

The first is that as the CAP budget is already allocated, transferring funds to new forms of support necessarily entails withdrawing funds from existing forms of support. 

A less obvious, but even more significant problem, is that the CAP budget is quickly shrinking. The culprit is high inflation, which reduces the real value of support.

When the new CAP budget was agreed the scenario was still one of low inflation, the maximum rate expected being the ECB yearly 2% target. Or today we witness an average EU inflation close to 10%, and the ECB was obliged to significantly up its forward inflation forecasts.

To make matters even worse, inflation in a number of countries is running well above the average. Those countries where inflation is below the EU average are still facing high inflation, well above the old 2% target.

Taking the ECB data and inflation forecasts, which could well be too rosy having regard their recent overly optimistic inflation forecasts, the real value of the CAP budget will shrink by an aggregate 84.57 billion euros in real terms in the period 2021-27. To put it in perspective, the aggregate 2021-27 real value of the CAP budget will shrink 21.95% with regard to 2020, and in the last year (2027) 34.12% vis-à-vis 2020. Over one third less real support in 2027.

Direct support received by farmers is directly and heavily impacted. Even investment aids are impacted as the total amounts available shrink with inflation. Pillar I will lose a staggering 68.60 billion euros, and Pillar II 15.97 billion euros.

Under those circumstances, finding a new political path to deliver the green deal, based on a green growth strategy for the agricultural sector is urgent, switching from a regulatory based strategy aiming at cutting productivity tools to a proper investment strategy fostering agronomic systemic approaches and innovation, embarking farmers on a positive path for both the economy and climate. 

The remedy to a CAP funding melting away like snow in the sun is to reprice the CAP budget in real terms, i.e. to adjust it yearly by the level of inflation, in addition to building a proper EU investment fund targeted on strategic sectors in need of transition like agriculture and energy, instead of leaving a haphazard approach based on state aid.

Will co-legislators adjust the budget for inflation? Taxes perceived by Member States go up with inflation, shouldn’t support do likewise?

NUTRITION & HEALTH : CONSENSUS FOR A NEW ALGORITHM

Over the summer, the scientific committee in charge of NutriScore, the front-of-pack nutritional labelling systems in used in 6 EU countries agreed on changing the algorithm behind the scoring system. The changes concern the calculation of fats and oilseeds, and a specific rule for red meat. On the same front, Italy upgraded the national nutritional labelling, Nutinform, with the digital version of it: an app. 

In preparation for the awaited renovation package concerning Food information to consumers (expected to be advanced in the early months of 2023), the Joint Research center published some research on nutritional labelling, origin labelling, alcoholic labelling. These studies will be most likely used as a base for the Commission to draft its legislative proposals. 

full note available on FE Members’ area

FARM TO FORK STRATEGY: FERTILIZER AND PPP LEAD THE DISCUSSIONS IN PRAGUE

During the informal meeting of agriculture ministers held in Prague, Commissioner Wojciechowski hinted to the need for the EU to have a fertilizer strategy, notably in this time of agricultural price crisis. 

On the revision of the use of plant protection products, some delegations led by the Polish one strongly asked for an effective revision of the Commission’s proposal, considered ‘outdated’ and out of context, in light of the events in Ukraine and the fact that the impact assessment did not consider any consequences on food security.  At the same time, the Commission adopted new rules to fast-track the adoption procedure of new biological pesticides. 

On animal transport, the European Agency for Food Safety published some reports on the matter.  These ones will be used by the Commission as a base for its legislative proposals (expected for the fourth quarter of next year). The reports find that providing more space, lowering maximum temperatures, and keeping journey times to a minimum are all needed to improve the welfare of farmed animals during transport. 

full note available on FE Members’ area

NEW GENOMIC TECHNIQUES: SAFETY REQUIREMENTS VITAL TO GMO OPENNESS 

After the informal AgriCouncil in Prague middle of September, EU ministers seemed to be particularly open to the new modifications of the EU legislations on GMO, assuring solid impact assessment and safety as the top priority.  

In Austria, an NGO guides a pan-European on-line petition to keep the status quo on GMO regulations, fearing that a possible modification would allow what they call ‘new-GMOs’ to be sold in the market without following the security measures needed. 

On the other side of the Atlantic, while the USDA approved a gene-edited tomato rich in nutrients, the US government approved an executive order that set the guidelines for future cooperation amongst governmental bodies to boost the US biotechnology and bio manufacture industry. At the same time, a federal judge claimed that current GMO labelling rules do not assure the safety of consumers because they prevent some from accessing the information. 

full note available on FE Members’ area