Guidehouse: Support for the implementation of the provisions on ILUC set out in the RED | 2024

Guidehouse (in collaboration with ISCC) reported on their project carried out for the European Commission on low ILUC-risk certification of biomass feedstocks. A certification guidance, audit checklist and management plan were tested across 10 different pilot projects in 7 different countries. The idea behind this certification is that it could be added onto any existing European Commission-recognised voluntary scheme.

What is ILUC-risk?

ILUC stands for Indirect Land-Use Change. This can occur when demand for biomass feedstocks (e.g. for biofuel production) causes land previously used for other purposes such as food and feed production, or land holding forests / grasslands to be converted into agricultural lands. Since certain types of land-use are able to store more greenhouse gases in biomass and soil than others, land-use change can lead to a reduction in greenhouse-gas stocks. A low ILUC-risk certification for biofuels would verify that the greenhouse gas savings obtained from using a biofuel is not outweighed by losses in greenhouse gas stocks due to land-use change.

A key principle of this certification is that of 'additionality', meaning that additional biomass must be produced and then used for creating biofuels, rather than displacing existing uses of biomass. This could be achieved by increasing yields on existing agricultural lands, or by making use of unused, abandoned or severely degraded lands.

Guidehouse identifies several challenges that became apparent from the pilot projects, and that need to be addressed to ensure proper implementation. The report also describes policy recommendations to the European Commission.

Some conclusions that are drawn from Guidehouse's study are described below.

• Additionality of biomass production can be hard to prove and requires complicated calculations with errors easily made.
• Low ILUC-risk certification is not very financially attractive compared to other policy signals, e.g. inclusion in Annex IX. Few farmers would be able to increase their yield in such a way that meets the certification requirements and for whom the certification would be worthwhile. Here large market players (who usually already have quite optimised yields) are at an advantage compared to smaller farmers with less resources.
• Financial benefits of the certification may not be transferred to farmers but would likely stay on the biofuel production or retailer end of the value chain.
• A clear definition is needed for intermediate crops.
• Thresholds for low ILUC-risk certification proposed in the guidance are too strict and should be lowered, which would also provide an incentive to protect against further degradation of agricultural land before it becomes impossible to cultivate.

Read the full report here or download on the right-hand side.