ClientEarth briefing says biofuels should not have a zero emissions factor in the EU ETS

14.6.2011 (Client Earth)
(Biomass here included biofuels for aviation)
ClientEarth‘s legal briefing:
“Bringing the ETS in line with reality: Making biomass emissions count through
the Monitoring and Reporting Regulation”
The briefing argues that the current application of a zero-emission factor to
emissions from biomass used in sectors covered by the ETS does not accurately
reflect actual emissions from biomass and is, moreover, contrary to the principle
underlying the ETS that each operator should be responsible for his own emissions.
EU ETS legislation instructs the European Commission to adopt a Monitoring and
Reporting Regulation by 31 December 2011. 
The briefing by ClientEarth identifies this Monitoring and Reporting Regulation
as an opportunity to correct the current treatment of biomass under the ETS by
eliminating the zero-emissions factor for biomass co-fired with other fuels and
provides specific recommendations for how this might be accomplished.

The briefing first provides an overview of the Renewable Energy Directive 2009/28/EC
and the ETS Directive 2003/87/EC, including how the Renewable Energy Directive
defines the “sustainability” of “biomass” and the deficiencies of its sustainability
It goes on to explain the current treatment of biomass under the ETS and the
provisions of the draft Monitoring and Reporting Regulation that the Commission
is in the course of finalising.
Attention then turns to the scope and objectives of the legislative mandate for
a Monitoring and Reporting Regulation given to the Commission by the ETS Directive,
and the possibilities it offers to realign—at least in part—the treatment of biomass
with its real GHG performance.
The briefing concludes that the Commission can and should take full advantage
of the Directive’s mandate by deleting the zero-emission factor for biomass.
ClientEarth’s legal analysis shows that this is possible under current legislation,
at least insofar as operators using biomass as part of a broader fuel mix are
With regard to operators exclusively using biomass, a legislative procedure may
be required to amend the ETS Directive. This is outside of the remit of the mandate
for the Monitoring and Reporting Regulation. The briefing goes on to recommend
that, unless and until the ETS Directive is amended to include biomass-only installations
within the ETS, ‘biomass’, for the purposes of the ETS, should be defined to include
any sustainability criteria adopted for biofuels, bioliquids, biogas and/or solid
biomass under the remit of the Renewable Energy Directive.
The briefing was provided as part of ClientEarth’s submission to the consultation
on the draft Monitoring and Reporting Regulation that closed on 10 June 2011. 
It can also be accessed at

Some of the people who reviewed preliminary drafts of the briefing raised questions
about how our recommendations should be understood in light of the accounting
rules for biomass under the Kyoto Protocol.  ClientEarth intends to follow up
with a second briefing outlining the relevant reporting frameworks and addressing
these questions. 
A few extracts are:
It is important to point out that, within the framework of the ETS Directive

the term ‘biomass’ is used to refer to any non-fossilised biodegradable material

organic origin, regardless of its state (solid, liquid or gaseous) and of the
sector in

which it is used (transport, heating, electricity generation, etc.). In other
words, under

the ETS ‘biomass’ includes also biofuels and bioliquids.
Significantly, the GHG criterion merely requires that biofuels and bioliquids
result in

specified reductions of GHG emissions as compared to fossil fuels. In other words,

“sustainability” under the Renewable Energy Directive 2009/28/EC does not equate
 to carbon neutrality. Quite the contrary, the Directive assumes that biofuels
and bioliquids

produce positive GHG emissions even when they are sustainable.

Moreover, it is important to stress that the sustainability criteria laid down
in the

Renewable Energy Directive 2009/28/EC overlook important climatic impacts such
as the

carbon debt issue and GHG emissions from indirect land-use changes, which do

appear in the calculation methodologies. In addition, sustainability criteria
for biofuels

and bioliquids fail to take into consideration the cumulative pressure of a dramatic

increase in demand for limited global forest and arable land resources.
The Mistaken Notion that Using Biomass for Energy is Carbon Neutral

The carbon debt of biomass

The idea that bioenergy is carbon neutral because emissions from energy

generation are re-absorbed through biomass re-growth is in fact no more than

mistaken preconception. Scientific analysis does not support the idea of a neat

in which the carbon emitted through burning biomass for energy is re-absorbed

through re-growth―at least not within our lifetime’s scale. Between the moment

carbon is emitted from the combustion of the bioenergy carrier and the moment
it is

re-captured by growing vegetation, the bioenergy system has positive carbon

emissions. Therefore, at least initially, increased reliance on bioenergy amounts

incurring a “carbon debt” with the atmosphere, which will be repaid over time

new biomass grows to replace that which was burned. The significance of the

carbon debt issue on the overall climatic performance of bioenergy depends on

length of the delay between emission and re-absorption. Available science estimates

that shifting to bioenergy produces climatic benefits on a timescale ranging

immediately (e.g., in the case of raw material extracted from new forests grown

land that was previously cropland) to hundreds of years (e.g., when raw material

comes from additional thinnings of natural forests or plantations).

Indirect land-use change

The current methodology for calculating the life-cycle emissions of biofuels

bioliquids does not take into account the effects of indirect land-use change

ILUC occurs when, for example, bioenergy feedstock production displaces

agricultural land and, in turn, forests are converted to agricultural production

order to replace the agricultural lands converted to bioenergy crops. Depending

on the previous uses of the affected lands, ILUC can significantly reduce GHG

of bioenergy—in some cases resulting in emissions that are worse than fossil

being substituted.

When the influence of the carbon debt as well as ILUC concerns are taken into

account, serious doubts arise about the overall GHG performance of bioenergy

it becomes apparent that updated, more encompassing criteria are needed in order

to ensure that only sustainable bioenergy is supported or even allowed23.

Broader environmental impacts of increasing demands on limited forest

and land resources

Moreover, increased pressure on forests and agricultural lands deriving from

increased reliance on biomass threatens to result in deforestation, forest

degradation and biodiversity loss as well as rising food prices which may affect

livelihoods of forest-dependent populations and the world’s poor. Current

regulations in the energy as well as forest sectors at both the European and

Member State levels are inadequate to address these concerns, as a recent report

on the sustainability of woody biomass shows.
Page 11
Currently, under the ETS Directive as implemented by Decision 2007/589/EC for

monitoring and reporting purposes, emissions from bioenergy do not count towards

obligation to surrender allowances. That is, bioenergy is treated as if it did
not produce

any emissions and bioenergy users are de facto subsidised through an exemption

the obligation to surrender allowances. Moreover, because bioenergy emissions
do not

constitute reportable emissions giving rise to an obligation to surrender allowances,

applicable rules allow less accurate monitoring and reporting of bioenergy emissions.

As a result, policy-makers as well as the public are not able to access data
on the actual

level of emissions from bioenergy in the Union.