Report
November 2012
An overview of relevant legal frameworks
Carbon impacts of bioenergy under European and international rules
ClientEarth - November 2012
Table of Contents
Introduction
3
1. Bioenergy: the primary renewable energy source in the EU
4
2. The European framework
5
2.1
2.2
2.3
The Renewable Energy Directive
6
2.1.1
Sustainability criteria applicable to biofuels and bioliquids
6
2.1.2
The methodology for calculating greenhouse gas emission savings
7
2.1.3
Solid and gaseous biomass
8
2.1.4
Extending the methodology for biofuels to biomass?
9
The ETS Directive
10
2.2.1
The exclusion of biomass emissions from the ETS
10
2.2.2
The Monitoring and Reporting Regulation: Biofuels in the ETS
11
The LULUCF Proposal
3. The international framework
12
14
3.1
The UNFCCC
14
3.2
The Kyoto Protocol
15
3.3
Some general considerations about international GHG estimates
17
4. Conclusion and policy recommendations
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Carbon impacts of bioenergy under European and international rules
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Key points
The issue:

Bioenergy is the primary source of renewable energy in Europe. The sustainability and
emission reduction potential of biomass must be ensured.

The Renewable Energy Directive contains sustainability criteria for biofuels and bioliquids,
but no sustainability safeguards for biomass. This means that energy from any type of
biomass is eligible for public support schemes and can count towards renewable energy
targets regardless of any sustainability or emission reduction consideration.

The European Commission has a mandate to evaluate the need for sustainability
requirements for biomass and to make proposals as appropriate. Several eminent bodies,
including the Scientific Committee of the European Environment Agency, have warned
about the potential 'immense' risks of current regulations. Nevertheless the Commission
has not yet tabled a proposal.

The Commission has recommended that Member States design any sustainability scheme
for biomass they wish to introduce along the lines of sustainability criteria for biofuels and
bioliquids in the Renewable Energy Directive. But these criteria relate to fuels from
agricultural crops and are inadequate for biomass.

The ETS Directive excludes emissions from biomass from the European Emissions Trading
Scheme although biomass combustion releases as much CO2 as fossil fuel combustion.

The Kyoto Protocol creates accounting loopholes into which carbon emissions from
biomass disappear and no Party is held responsible for them. This loophole is replicated by
the ETS’ zero-emission treatment of biomass.
Recommended actions:

Regulation should allocate incentives and liabilities in accordance with the environmental
impact and carbon balance of different types of biomass and of different uses of biomass.
They should stimulate behaviours conducive to the achievement of policy objectives.

The Renewable Energy Directive should be amended to include sustainability safeguards
specifically tailored for biomass. They should take into account the time delay between
emissions from biomass combustion and removal from photosynthesis.

The ETS Directive should be amended by terminating the zero-emission treatment of
biomass.
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Introduction
In September 2011, the Scientific Committee of the European Environment Agency denounced
regulations treating bioenergy as 'carbon neutral' as premised on a serious accounting error whose
potential consequences are 'immense'1. This report puts the carbon impacts of bioenergy in their
legal context by reviewing the different sets of rules applicable at European as well as international
level. It explains how the carbon neutrality treatment of biomass, which originated in methodologies
for preparing greenhouse gas estimates under the UNFCCC and the Kyoto Protocol, has been
translated into European laws.
The report confirms that current rules fail to adequately reflect the carbon impacts of bioenergy,
mainly because their limited geographical and sectoral scope makes them unable to deal with
international and inter-sectoral leakage.
The practical result of this state of affairs is that confidence in the environmental and low-carbon
credentials of the main source of renewable energy in Europe is eroding. This is at least in part due
to a failure of current approaches to discriminate between sustainable and unsustainable uses of
biomass resources, to stimulate the right behaviours, and to allocate incentives and liability
accordingly.
The report concludes by putting forward suggestions for improvement.
Glossary
Biomass
Biofuels
The biodegradable fraction of Liquid or gaseous fuel for
products, waste and residues transport produced from
from biological origin from biomass.
agriculture (including vegetal
and
animal
substances),
forestry and related industries
including
fisheries
and
aquaculture, as well as the
biodegradable fraction of
industrial and municipal waste.
Bioliquids
Liquid fuel for energy purposes
other than for transport,
including
electricity
and
heating and cooling, produced
from biomass.
1
European Environment Agency Scientific Committee, Opinion of the EEA Scientific Committee on Greenhouse Gas Accounting
in Relation to Bioenergy, 15.09.11, available at: http://www.eea.europa.eu/about-us/governance/scientific-committee/scopinions/opinions-on-scientific-issues/sc-opinion-on-greenhouse-gas/at_download/file
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1. Bioenergy: the primary renewable energy source in the EU
Bioenergy, mainly in the form of solid biomass, is
the primary renewable energy source in the
European Union, accounting for about 60% of all
renewable energy used in the region in 2010. The
National Renewable Energy Action Plans of the
Member States forecast that bioenergy will
maintain its dominance up to 20202.
The sustainability and carbon benefits of the
primary renewable energy source in Europe must
be carefully guarded if the credibility of European
renewable energy policy is to be upheld.
As mentioned in the introduction, however, the
environmental and low-carbon credentials of
bioenergy have increasingly been called into
question. Authoritative studies have warned
against the so-called 'carbon debt' -- the time
delay between the emission of carbon to the
atmosphere during biomass combustion and the
removal of an equivalent amount of carbon from
the atmosphere through plant photosynthesis3.
IPCC emission factors for solid biomass
and selected fossil fuels
Fuel
Wood
(wood)
(other primary
solid biomass)
(wood waste)
Bioliquids* (biogasoline)
(biodiesels)
(other liquid
biofuels)
Oil
(gas/diesel oil)
(residual fuel oil)
(LPG)
Coal
(anthracite)
(lignite)
Natural gas
gCO2/MJ
112.0
100.0
112.0
70.8
70.8
79.6
74.1
77.4
63.1
98.3
101.0
56.1
Selected default emission factors (on a net calorific basis and in
gCO2/MJ for consistency with the Renewable Energy Directive).
Source: 2006 IPCC Guidelines, Vol. 2, Table 2.2, pp. 2.16-2.17 (see
footnote 53). *The IPCC Guidelines refer to bioliquids used in
stationary installations as biofuels.
Carbon emissions from biomass combustion are comparable to fossil fuels (see text box). Unlike for
fossil fuels, however, it is possible for an energy system based on bioenergy to balance out emissions
with removals, in part or in full. Whether the balance is struck heavily depends on the type of
feedstock used, on how it was produced and transformed, and on how the site of origin is managed.
Policy and resulting regulations should acknowledge all impacts of bioenergy along its life cycle,
including carbon impacts from combustion and land management, while also protecting other
environmental values. Responsibilities for ensuring that the use of biomass for energy results in
emissions savings and is otherwise sustainable should be allocated in a manner that promotes
behaviours conducive to a good environmental outcome. Current policies fail to achieve these
objectives and should be improved.
2
Figures for renewable energy generation given in this paragraph are taken from Beurskens L.W.M. et al., Renewable Energy
Projections as Published in the National Renewable Energy Action Plans of the European Member States: Covering all 27 EU
Member States with updates for 20 Member States, 28.11.2011, available at:
http://www.ecn.nl/docs/library/report/2010/e10069.pdf
3
See, among others, Fargione J. et al., Land Clearing and the Biofuel Carbon Debt, Science, 29.02.2008, 319 (5867), pp. 12351238 and Searchinger T. D. et al., Fixing a Critical Climate Accounting Error, Science, 23.10.2009, 326 (5952), pp. 527-528.
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2. The European framework
This section presents the main legal and policy instruments relevant for the regulation of bioenergy
in the European Union. These are:

Directive 2009/28/EC4 (the Renewable Energy Directive)
The Directive sets out sustainability criteria for biofuels and bioliquids seeking to ensure a
minimum greenhouse gas saving vis-à-vis fossil fuels. The life cycle approach of the Directive is
'from field to fuel' and thus does not count emissions from the fuel in use (i.e. combustion
emissions). At present, the sustainability criteria the Directive lays down do not apply to solid
and gaseous biomass.

Directive 2003/87/EC5 (the ETS Directive)
The Directive covers, among other things, emissions from the combustion of fuels in largescale energy generation and air transport6. Although the Directive does not adopt a life cycle
approach, it exempts bioenergy emissions from the ETS in most cases.

COM(2012) 93 final7 (the LULUCF Proposal)
The Proposal sets out accounting rules applicable to emissions and removals resulting from
land use, land use change and forestry (LULUCF) activities. The Proposal is premised, among
other considerations, on the acknowledgement that combustion emissions from bioenergy
currently go unaccounted for8, thus providing incentives for the use of bioenergy which may
not be justified by its carbon outcome, and which run counter to the establishment of a level
playing field within forestry and related industries and energy sectors in the Member States.
4
Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy
from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, OJ L 140, 5.6.2009,
p. 16–62.
5
Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for
greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, OJ L 275,
25.10.2003, p. 32–46.
6
Aviation was included in the ETS, with effect from 1 January 2012, by Directive 2008/101/EC of the European Parliament and
of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for
greenhouse gas emission allowance trading within the Community, OJ L 8, 13.1.2009, p. 3–2.
7
Proposal for a Decision of the European Parliament and of the Council on accounting rules and action plans on greenhouse
gas emissions and removals resulting from activities related to land use, land use change and forestry, COM(2012) 93 final,
Brussels, 13.03.2012.
8
Explanatory memorandum, COM(2012) 93 final, p. 5.
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2.1 The Renewable Energy Directive
Directive 2009/28/EC promotes renewable energy9, which includes energy from biomass10, by
setting mandatory renewable energy targets for Member States to achieve in 2020. The Directive
allows Member States to introduce public support schemes for the use of energy from renewable
sources11.
The Directive sets out sustainability criteria for biofuels and bioliquids aiming among other things to
ensure that they result in greenhouse gas emission savings12. Meeting the criteria is a condition for
biofuels and bioliquids to be counted towards renewable energy targets and to be eligible for public
support13.
The criteria do not apply to biomass. As a result, any type of biomass is treated as a renewable
energy source counting towards renewable energy targets and eligible for public support, regardless
of emission and broader environmental considerations.
The Commission may propose the introduction of sustainability criteria for biomass in accordance
with the mandate given in Article 17(9) of the Renewable Energy Directive. There are indications
that any such proposal will be based on the blueprint of criteria for biofuels and bioliquids. These
criteria are designed for biofuels and bioliquids produced from agricultural feedstocks. As will be
explained below, they are not adequate to ensure biomass is sustainable and low-carbon.
2.1.1 Sustainability criteria applicable to biofuels and bioliquids
Article 17 of the Renewable Energy Directive provides that biofuels and bioliquids may only be
counted towards the targets and receive public support on condition that they comply with a set of
sustainability criteria laid down in paragraphs 2 to 6 of that Article.
Most notably, Article 17(2) requires that the use of the biofuel or bioliquid must guarantee at least a
35% GHG emissions saving as compared to fossil fuels14 (a threshold rising to 50% with effect from 1
January 2017 and to 60% from 1 January 2018 if the production of biofuels or bioliquids in the
installation started on or after 1 January 2017). The methodology for calculating the emission
savings is set out in Annex V to the Renewable Energy Directive.
9
Art. 1, Renewable Energy Directive.
Art. 2(a), Renewable Energy Directive.
11
See Art. 3, Renewable Energy Directive.
12
See the greenhouse gas saving criterion in Art. 17(2), Renewable Energy Directive.
13
See Art. 17(1), Renewable Energy Directive.
14
In accordance with Art. 17(2), fourth subparagraph, of the Renewable Energy Directive, installations which were already in
operation on 23 January 2008 are grandfathered from the criterion. The GHG saving criterion applies to them only from 1 April
2013.
10
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2.1.2 The methodology for calculating greenhouse gas emission savings
The methodology for calculating the GHG saving from the use of biofuels or bioliquids is based on a
formula laid down in Annex V, Part C, of the Renewable Energy Directive:
E = eec + el + ep + etd + eu – esca – eccs – eccr – eee
Each element represents a step of the life cycle of the biofuel or bioliquid.
For illustrative purposes, the intermediate elements of the life cycle can be collapsed into a single
placeholder, esupply chain, simplifying the formula as follows:
E = el + esupply chain + eu
Impacts at the level of land use should be captured by the element 'el', emissions from carbon stock
changes caused by land-use change. Combustion emissions are referred to as emissions from the
fuel in use, 'eu'.
Carbon stock changes caused by land-use change (el)
The element el captures changes in carbon stocks occurring at land use level as a result of (direct)
land use change. Direct land use change occurs, by definition, when the use of the land changes
from one land category15 (e.g. cropland) to another (e.g. grazing land). Land use change does not, on
the contrary, occur when the land category remains unchanged. For example, when a biofuel crop
replaces a food crop, land remains 'cropland' and emissions from carbon stock changes caused by
land-use change will be considered as not taking place by definition (el = 0).
15
Land categories are the six land categories used by the IPCC (forest land, grassland, cropland, wetlands, settlements and
other land) plus a seventh category of perennial crops. See Annex II, Communication from the Commission on the practical
implementation of the EU biofuels and bioliquids sustainability scheme and on counting rules for biofuels (2010/C 160/02),
19.06.2010.
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A possible rationale for accounting for carbon impacts from land use only where land-use
change occurs is that the average carbon stock in situ16 does not change substantially from
agricultural crop to agricultural crop. The narrow focus on on-site impacts neglects, however,
that impacts occurring off-site are also relevant for attaining the ultimate objectives of the
policy. Indeed, emissions from indirect land use change may negate direct carbon savings.
Emissions from the fuel in use (eu)
Emissions from the fuel in use, or combustion emissions, are 'taken to be zero for biofuels and
bioliquids'17.
A possible rationale for not counting combustion emissions is the following. When agricultural
crops grow, they sequester carbon, which is later released into the atmosphere following
harvest and combustion as fuel. Shortly afterwards, the next growing season begins and a
similar amount of carbon is sequestered again. Because of the short time gap between
emission from fuel combustion and removal from crop growth, average carbon stocks may be
considered as constant in a long-enough time frame (the Directive's methodology uses a
twenty-year horizon), thus making accounting for combustion emissions redundant.
2.1.3 Solid and gaseous biomass
The sustainability criteria of the Renewable Energy Directive only apply to biofuels and bioliquids,
but not to biomass. If the objectives of renewable energy policy are to be attained, however, the use
of biomass for energy must be sustainable18. The Directive therefore mandates the Commission to
assess requirements for a sustainability scheme for energy uses of biomass and, if appropriate, make
a proposal19.
The Commission reported on the matter on 25 February 201020. The Commission did not put
forward a legislative proposal at the time, but limited itself to recommending that Member States
which either have, or who introduce, national sustainability schemes for solid and gaseous biomass
used in electricity, heating and cooling, should ensure that these are in almost all respects the same
as those laid down for biofuels and bioliquids in the Renewable Energy Directive. As the
16
Off-site impacts include emissions from indirect land-use change (ILUC), whose effects may cancel out or even reverse any
potential saving from land-based biofuels and bioliquids. See Laborde D. (IFPRI), Assessing the Land Use Change Consequences
of European Biofuel Policies, Final Report, Specific Contract No SI2. 580403 implementing Framework Contract No
TRADE/07/A2, October 2011, available at: http://trade.ec.europa.eu/doclib/docs/2011/october/tradoc_148289.pdf
17
Annex V, item 13, Renewable Energy Directive.
18
See Recital 75, Renewable Energy Directive.
19
Art. 17(9), Renewable Energy Directive.
20
Report from the Commission to the Council and the European Parliament on sustainability requirements for the use of solid
and gaseous biomass sources in electricity, heating and cooling, COM(2010) 11 final, Brussels, 25.02.2010.
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Communication is not a legally binding act, no obligations derive from it for Member States to
introduce the recommended criteria, or any at all.
Leaving aside other possible impacts to focus solely on emissions, it is worth asking whether the
methodology laid down for calculating greenhouse gas emission savings would be adequate for
biomass.
2.1.4 Extending the methodology for biofuels to biomass?
While using the same calculation methodology for biofuels and bioliquids also for solid and gaseous
biomass would keep the system simple and relatively cheap to administer and comply with, it is
debatable whether such approach would suit different forms of bioenergy.
In relation to solid biomass, the methodology recommended in the Commission report would in
most cases only capture supply chain emissions.
Under the methodology, combustion emissions are taken to be zero by definition.
Changes in carbon stocks at land use level are accounted for only when (direct) land-use change
occurs. Because such land-use change is not expected to occur in most cases, emissions from land
use will normally be considered as zero too. For example, reductions in carbon stocks and
corresponding emissions from forest harvesting which does not cause deforestation, or from the
harvesting of plantations, would not trigger a land-use change under the methodology because the
land would remain in the same category as it was before. In such cases, changes in carbon stocks
and corresponding emissions would not be accounted for.
The assumption underlying the methodology that carbon stocks remain stable unless direct land-use
change occurs cannot be justified where the time gap between emissions and re-absorption is too
long. This is the case, for example, for decade-long forest rotation periods.
More generally, for solid biomass it may not be possible to quantify carbon stocks to the level of
accuracy required by the methodology, due among other things to the size of the stocks, their
seasonal variability and their relation with changing weather conditions. Technical difficulties and
the influence of external factors will in many cases mask the specific effect of biomass extraction on
carbon stocks.
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2.2 The ETS Directive
Directive 2003/87/EC established the European Emissions Trading Scheme to promote reductions of
GHG emissions in a cost-effective and economically efficient manner. The scheme caps GHG
emissions from a number of sectors, notably large-scale energy generation21 and aviation. The cap
translates into a number of European Emission Allowances (EUAs), each representing a tonne of
carbon dioxide equivalent. Covered operators are required to surrender each year a number of EUAs
matching their emissions in the previous year, or pay fines. EUAs may be traded -- a possibility which
should allow diligent operators to obtain a competitive advantage over those who have to purchase
allowances to cover their emissions.
The availability of EUAs on the market has to be low relative to demand for an adequate price signal
to be established and drive GHG emissions reductions. EUA price has however been depressed and
volatile for most of the scheme's operation, and fluctuated between about €6.50 and €8.50
between April and October 201222 -- a long way from the €50 in 2050 price assumption
underpinning the baseline scenario of the Commission's Energy Roadmap 2050 (decarbonisation
scenarios envisage substantially higher prices)23.
At present, operators do not have to surrender EUAs against emissions from any type of bioenergy.
Although rules will change from 1 January 2013 for biofuels and bioliquids (see section 2.2.2, below),
the current regime will be maintained for biomass. The resulting incentive for using biomass is not
made subject to any control of carbon or wider environmental impacts of the biomass.
2.2.1 The exclusion of biomass emissions from the ETS
Pursuant to the ETS Directive, operators exclusively using biomass are not covered by the ETS24.
Operators who co-fire biomass with fossil fuels do fall within the scope of the ETS, but do not have
to surrender allowances against emissions from biomass, which receive a 'zero emission factor'25.
The ETS exemption for biomass is considered to be an important driver of biomass use in existing
plants26. Thanks to the carbon price created by the ETS and depending on the relative prices of fossil
and biomass fuels, biomass can be competitive with coal in existing plants at an EUA price range of
€7 to €21 (common in 2011); new-built biomass plants can become competitive to new coal plants
between €33 and €47 per EUA27.
21
20 MW and above. For the scope of the ETS, see Art. 2, ETS Directive.
Data from Bloomberg New Energy Finance.
23
See Communication from the Commission to the European Parliament, the Council, the European Economic and Social
Committee and the Committee of the Regions: Energy Roadmap 2050, COM(2011) 885 final, Brussels, 15.12.2011, p. 16.
24
Annex I, item 1, ETS Directive.
25
See Annex IV, parts A and B, ETS Directive, where it is stated that '[t]he emission factor for biomass shall be zero'.
26
Türk A. et al., The influence of Emissions Trading Schemes on bioenergy use, IEA Bioenergy Task 38 Working Paper, Mar 2011,
available at: http://www.ieabioenergy-task38.org/publications/T38_ETS_Bioenergy_2011.pdf.
27
Schwaiger H. et al., The future European Emission Trading Scheme and its impact on biomass use, Biomass and Bioenergy,
Vol. 38, Mar 2012, pp. 102-108. Because biomass prices vary highly from one Member State to the other, the ranges are only
22
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The ETS Directive does not provide any definition of biomass for the purposes of the ETS. Currently,
the relevant definition is laid down in Commission Decision 2007/589/EC28 (Monitoring and
Reporting Guidelines). The Guidelines make no distinction between biomass, biofuels and bioliquids,
which are all treated alike. This will however change from 1 January 2013, with the entry into force
of the newly adopted Monitoring and Reporting Regulation29.
2.2.2 The Monitoring and Reporting Regulation: Biofuels in the ETS
The new Monitoring and Reporting Regulation lays down definitions for biomass, biofuels and
bioliquids30 identical to those provided for in the Renewable Energy Directive.
The Regulation:

Provides that '[t]he emission factor for biomass shall be zero'31

Interprets this preferential treatment as constituting a financial support scheme within the
meaning of the Renewable Energy Directive32

Provides that '[t]he use of biofuels for aviation shall be assessed in accordance with Article
18 of Directive 2009/28/EC'33 on verification of compliance with sustainability criteria for
biofuels and bioliquids
Under the new Regulation, operators will therefore have to surrender allowances against emissions
from biofuels (or, arguably, bioliquids) if they do not meet the sustainability criteria of the
Renewable Energy Directive. If, on the contrary, they comply with sustainability criteria, the zeroemission factor will continue to apply.
It should be noted that, while sustainability under the Renewable Energy Directive implies that
biofuels and bioliquids produce lower emissions than fossil fuels34, the Monitoring and Reporting
Regulation treats sustainable biofuels (or bioliquids) as producing no emissions.
As the sustainability criteria of the Renewable Energy Directive do not apply to biomass, biomass
continues to receive preferential treatment under the ETS regardless of sustainability controls. If and
when sustainability criteria for biomass will be introduced in the Renewable Energy Directive, they
will become relevant for ETS purposes as a result of the Regulation.
indicative. Further information on the price assumptions and the methodology applied can be found in the paper.
28
See Annex I, §2(4)(f), Commission Decision 2007/589/EC of 18 July 2007 establishing guidelines for the monitoring and
reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council, OJ L
229, 31.8.2007, p. 1–85.
29
See relevant page on the website of DG Climate Action: http://ec.europa.eu/clima/news/articles/news_2012062101_en.htm
30
See Art. 3(20)-(21)-(22) of the Monitoring and Reporting Regulation.
31
Art. 38, Monitoring and Reporting Regulation.
32
Recital 2, Monitoring and Reporting Regulation.
33
Art. 53, Monitoring and Reporting Regulation.
34
See greenhouse gas savings thresholds laid down in Art. 17(2) of the Renewable Energy Directive.
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2.3 The LULUCF Proposal
As seen in the previous section, the sectoral scope of the ETS Directive is limited. The ETS, in
particular, does not cover all activities included in international agreements.
For this reason, it is complemented by the Effort Sharing Decision35 setting out the minimum
contribution of Member States to meeting the Union's commitments in the areas not covered by
the ETS36. However, neither the ETS Directive nor the Effort Sharing Decision cover emissions and
removals from LULUCF.
The Effort Sharing Decision does however mandate the Commission to assess modalities for the
inclusion of LULUCF in the Union's reduction commitments and to make proposals as appropriate in
case no international agreement on climate change was approved by the end of 201037.
The recently-issued LULUCF Proposal does not provide that LULUCF activities should be formally
included in the Union's greenhouse gas emission reduction targets. Even so, the Commission is clear
that the Proposal can represent a useful first step towards formal inclusion in the future.
If adopted, the LULUCF Proposal will, as of 1 January 2013, oblige Member States to account for
emissions and removals from several LULUCF activities38. To this end, Member States will have to
identify the land areas on which relevant LULUCF activities take place39 and account for any change
in carbon stocks in six pools over those areas: above- and below-ground biomass, litter, dead wood,
soil organic carbon and harvested wood products40.
The LULUCF Proposal treats wood products harvested for energy purposes less favourably for
accounting purposes than longer-life wood products such as paper, wood panels and sawn wood41.
This accounting treatment does not however result in incentives sufficient to rebalance those
provided for energy uses of biomass. The inclusion from 1 January 2013 of forest management
among the LULUCF activities for which accounting is mandatory under the Kyoto Protocol may
partially compensate for the lack of incentives in the Proposal, but arguably to a very limited extent
only.
35
Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to
reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020,
OJ L 140, 5.6.2009, p. 136–148.
36
See Art. 2(1), Effort Sharing Decision. See also Recital 6 of the Decision.
37
Art. 9, Effort Sharing Decision.
38
Art. 3(1) of the LULUCF Proposal envisages mandatory accounting for afforestation, reforestation, deforestation, forest
management, cropland management and grazing land management. It would be left to Member States to decide whether to
account for emissions and removals from revegetation, wetland drainage and rewetting.
39
Art. 4(3), LULUCF Proposal.
40
Art. 4(4), LULUCF Proposal. Member States will be allowed to choose not to include changes in carbon stock for the listed
pools if it is demonstrated that a they are not net sources of emissions or declining sinks. This possibility does not apply to the
harvested wood products pool.
41
Pursuant to Art. 7(4) of the LULUCF Proposal, the carbon content of harvested wood products that were harvested for energy
purposes will be treated as immediately emitted to the atmosphere at the time when those products are included into the
accounts (so-called instantaneous oxidation method). The longer life and carbon storage time of paper, wood panels and sawn
wood is reflected in accounts in accordance with the methodology laid down in Art. 7(2) of the LULUCF Proposal.
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The method for accounting for emissions and removals from forest management under the Proposal
is based on forward-looking reference levels for each Member State42. This rule is consistent with
those applicable under the Kyoto Protocol (see sections 3 and 3.2, below) and aims to 'exclude the
effects of natural and country-specific characteristics' from the accounting system43. In practice, net
emissions or removals from forest management will be determined against an expected future
trend, with an upper cap on net removals set by Article 6(2) of the Proposal.
Different accounting rules apply to other LULUCF activities. Emissions and removals from
afforestation, reforestation and deforestation will be calculated on the basis of yearly differences
between carbon stocks at year-end and carbon stocks at year-start44; in the case of cropland
management and grazing land management, accounts are made for each period against values in a
base year45. The latter method also applies to emissions and removals from revegetation and
wetland drainage and rewetting, to the extent that Member States choose to include these activities
in their accounts46.
Finally, the Proposal includes mechanisms to deal with natural disturbances47 and a requirement for
Member States to draw up Action Plans setting out measures to limit or reduce emissions and to
maintain or enhance removals from the LULUCF sector48.
Generally speaking, while the LULUCF Proposal can be welcomed for bringing carbon fluxes from
LULUCF into the range of EU and Member State attention, it will not help to discriminate between
forms of bioenergy which have low carbon and low environmental impacts and others which
perform worse, and to allocate incentives accordingly. Furthermore, the Proposal does not provide
any specific rule for feedstocks deriving from LULUCF activities and used for energy purposes other
than forest management. As a final note, all bioenergy feedstocks imported from outside the EU will
not be affected by the LULUCF Proposal.
42
See Art. 6, LULUCF Proposal.
Recital 6, LULUCF Proposal.
44
See Art. 5, LULUCF Proposal.
45
See Art. 8(1), LULUCF Proposal.
46
See Art. 8(2), LULUCF Proposal.
47
See Art. 9, LULUCF Proposal.
48
See Art. 10, LULUCF Proposal.
43
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3. The international framework
As the previous sections have shown, emissions from bioenergy are not counted in the energy
sector under either the Renewable Energy Directive or the ETS Directive. Nor are they part of the
Union's emission reduction commitments under the Effort Sharing Decision. The LULUCF Proposal
does not envisage modifying this state of affairs.
The zero-emission treatment of bioenergy in the energy sector derives from the approach taken by
methodologies for estimating and reporting greenhouse gas emissions adopted under the United
Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol.
Both the Convention and the Protocol aim to achieve the stabilisation of greenhouse gas
concentrations in the atmosphere at a level that would prevent dangerous climate change49, with
developed countries (Annex I Parties to the UNFCCC50) expected to take the lead towards this
objective51. The Convention and the Protocol have different geographical coverage and they
encompass different sectors.
3.1 The UNFCCC
The UNFCCC could, at least in theory, fully capture the carbon impacts of bioenergy. It could do so on
a global scale.
Almost all countries in the world are in fact parties to the UNFCCC52 and are required, among other
things, to prepare and submit national inventories of GHG emissions and removals in accordance
with the methodologies agreed upon by the Conference of the Parties53, which are based on
guidance developed by the Intergovernmental Panel on Climate Change (IPCC).
Both the energy sector and the land-use sector are covered54. Full global coverage of all LULUCF
activities ensures (in theory, but see section 3.3, below) that all impacts of bioenergy (and other
land-based activities) on terrestrial carbon stocks are reflected in LULUCF accounts. In such a case,
49
Art. 2, UNFCCC.
Annex I Parties also include countries transitioning to a market economy.
51
Art. 3(1), UNFCCC.
52
See http://unfccc.int/essential_background/convention/status_of_ratification/items/2631.php.
53
The 17th Conference of the Parties (COP) to the UNFCCC, gathering in Durban in 2011, agreed to revise the UNFCCC
reporting guidelines on annual greenhouse gas inventories from Annex I Parties in order to implement the use of the 2006 IPCC
Guidelines for National Greenhouse Gas Inventories. The new guidelines will apply from October 2012 as part of a trial period
ending in May 2013. A final decision on the guidelines is expected from the 19th session of the COP at the latest. See Decision
15/CP.17, §§2-3. The 2006 IPCC Guidelines are available at: http://www.ipcc-nggip.iges.or.jp/public/2006gl/index.html. The
guidelines for the preparation of national communications from non-Annex I Parties are laid down in the Annex to Decision
17/CP.8.
54
See Annex I, section II, §4(d), Decision 15/CP.17.
50
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the rule according to which carbon dioxide emissions from bioenergy should not be counted in
the energy sector would be justifiable in order to avoid double counting.
3.2 The Kyoto Protocol
The Kyoto Protocol builds on the UNFCCC by placing legally binding obligations on Annex I Parties to
keep their greenhouse gas emissions within a maximum cap in the relevant commitment period.
The first commitment period runs from 2008 to 201255; the second will commence on 1 January
2013 and end either on 31 December 2017 or 31 December 202056. Methodologies for estimating
greenhouse gas emissions and removals under the Protocol are consistent with those applicable
under the UNFCCC57. This includes in particular the rule according to which carbon dioxide
emissions from bioenergy should not be counted in the energy sector.
For the Kyoto Protocol as for the UNFCCC, this rule entails that countries that burn biomass, biofuels
or bioliquids to satisfy their energy demand should not count carbon dioxide emissions from
bioenergy generation. Rather, any emissions or removal should be reflected in the LULUCF accounts
of the country from which the biomass originates.
Unlike the UNFCCC, however:

The Kyoto Protocol has limited geographical scope.
The Protocol only applies to Annex I Parties. At the same time, the rule applicable under the
UNFCCC is maintained that each Party is required to estimate GHG emissions and removals
taking place within the 'national (including administered) territories and offshore areas over
which the country has jurisdiction'58.

The Kyoto Protocol offers only partial coverage of the LULUCF sector.
The land use, land-use change and forestry (LULUCF) sector is only partially covered by the
Kyoto Protocol59. While certain land-use activities, namely afforestation, reforestation and
deforestation, fall within the scope of the Protocol60, the inclusion of others is left to the
discretion of individual Parties. This is the case for forest management, cropland
management, grazing land management and revegetation61.
55
See Art. 3(1)-(7), Kyoto Protocol.
To be decided by the Ad How Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol at its
seventeenth session. See Decision 1/CMP.7, §1.
57
See §15, Decision 4/CMP.7. For LULUCF in particular, see Decision 2/CMP.7.
58
Revised 1996 IPCC Guidelines, Overview, p. 5.
59
See Art. 3(1) and Annex A, Kyoto Protocol.
60
Art. 3(3), Kyoto Protocol.
61
Art. 3(4), Kyoto Protocol.
56
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With effect from the second commitment period, forest management activities will no
longer be included on a voluntary basis but will be mandatorily covered62. Accounting for
emissions and removals from forest management will be based on national forward-looking
reference levels set by each Party63. This means that whether forest management is a net
source or a net sink for an individual Party will depend on the reference level set by that
Party on the basis of forecasts about future trends.
The practical outcome of the limited geographical and sectoral coverage of the Protocol is that the
carbon impacts of bioenergy will be reflected neither in the energy sector nor in the LULUCF sector
of Annex I Parties where:
 Biomass, biofuels or bioliquids used by an Annex I Party are imported from a country which is
not an Annex I Party, or made from raw materials imported from such a country. This is
because the exporting country is not subject to the Protocol (geographical "loophole").
 Biomass, biofuels or bioliquids used by an Annex I Party are made from domestic raw
materials originating from LULUCF activities not covered by the Protocol (sectoral "loophole").
In these cases, Annex I Parties have an incentive under the Protocol to substitute bioenergy for fossil
energy because they do not have to respond for any emission which bioenergy may cause.
While replacing fossil energy with bioenergy may reduce emissions under certain circumstances,
current rules fail to verify when this is (or is not) the case and to allocate incentives (and liabilities)
accordingly. Carbon accounting loopholes exist where no one is held responsible for the carbon
impacts of bioenergy use.
Harvested Wood Products
Like under the LULUCF Proposal, specific rules for harvested wood products are applicable
under the Protocol.
As a general rule, in the second and subsequent commitment periods accounting for
harvested wood products will continue to be based on the instantaneous oxidation method -all carbon embedded in products is considered as being instantaneously emitted rather than
stored.
On condition that transparent and verifiable activity data for paper, wood panels and sawn
wood are available, however, accounts will have to reflect the carbon storage function
62
See Decision 2/CMP.7, §11 and Annex, §7, Decision 2/CMP.7.
See Annex, §12, Decision 2/CMP.7. The forest management reference levels take into account, inter alia: historical removals
or emissions from forest management; age-class structure; forest management activities already undertaken; projected forest
management activities under business as usual. See footnote 1 to paragraph 4 of Decision 2/CMP.6.
63
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performed by these products. When wood products result from deforestation or are
harvested for energy, nevertheless, accounting must assume instantaneous oxidation.
Imported harvested wood products, irrespective of their origin, shall not be accounted for by
the importing Party64.
3.3 Some general considerations about international GHG estimates
Rules for estimating greenhouse gas emissions and removals under the UNFCCC and the Kyoto
Protocol do not have, as their primary objective, the quantification of emissions and removals to a
high level of accuracy65. Such an objective would be impossible to achieve, particularly in the
LULUCF sector66.
The goal is rather to allow the functioning of a system under which greenhouse gas commitments
and performances by countries with different financial and technical capabilities can be consistently
evaluated and compared67. This entails that practicability takes precedence over accuracy, leaving
Parties free to choose more advanced accounting methods where possible.
Thus, uncertainties in LULUCF estimates can range in the order of magnitude of teragrams68 (1012
grams) -- well above the precision required by the methodology of the Renewable Energy Directive
(102 grams).
In addition, data is lacking for about half of the globe, as the following picture illustrates.
64
See §§26 to 32, Decision
Under those rules, 'accurate' estimates means estimates which are systematically neither over nor under estimated true
emissions and removals, as far as can be judged, and that uncertainties are reduced as far as practicable'. See Decision
15/CP.17, section II, §4(e).
66
As the IPCC acknowledges, uncertainties are inevitable in any estimate of national emissions or removals, mainly as a result
of (a) differing interpretations by different Parties of categories or other definitions, assumptions, units etc.; (b) use of default
or averaged values; (c) uncertainty in the basic data about the intensity of human activities which drive the calculations; (d)
inherent uncertainty in the scientific understanding of the basic processes leading to emissions and removals. Revised 1996
IPCC Guidelines, Reporting Instructions (Vol. 1), Annex I, p. A1.1. The most basic accounting methods rely on very aggregate
default data which are highly uncertain -- they are 'not well established or are highly variable from region to region, or within
very small subregions within a given country'. As a result, global average values, which 'can be used for first order calculations
or for comparison, [...] probably do not provide a basis for a credible final inventory. National experts in forestry and related
fields should be consulted to determine the most appropriate values for use in national inventories'. See Revised 1996 IPCC
Guidelines, Vol. 3, Land Use Change and Forestry, p. 5.4.
67
This is evident already from the Preface of the Revised 1996 IPCC Guidelines, where it is stated that '[t]his guidance assists
countries in compiling complete, national inventories of greenhouse gases. The guidance has been structured so that any
country, regardless of experience or resources, should be able to produce reliable estimates of their emissions and removals of
these gases. In particular, default values of the various parameters and emission factors required are supplied for all sectors, so
that, at its simplest, a country needs only supply national activity data. The approach also allows countries with more
information and resources to use more detailed country-specific methodologies while retaining compatibility, comparability
and consistency between countries.'
68
This is because LULUCF estimates are made at national level.
65
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Availability of data on GHG emissions
and removals under the UNFCCC. Green
means data is available for each year
from at least 1990 to 2009; red means
data is available for some years only;
black means that no data is available69
Consistent greenhouse gas data is almost exclusively available for Annex I Parties. Many countries
have data available for one or two years only (usually in the early 1990s).
Even where data is available, it cannot be readily verified. Most greenhouse gas inventories are
reviewed through either desk or centralised review. Only once every five years will verification
feature an in-country visit to an Annex I Party by an expert review team.
These considerations lend weight to the conclusion that, while greenhouse gas emissions accounting
under international rules may be suited to the pursuit of the objectives of the UNFCCC and the Kyoto
Protocol, it is not fit-for-purpose to help evaluate the specific carbon balance of different types of
bioenergy.
69
Map compiled on the basis of information available at:
http://unfccc.int/ghg_data/ghg_data_unfccc/data_sources/items/3816.php.
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4. Conclusion and policy recommendations
Current regulatory frameworks at both international and European level leave open two 'carbon
accounting loopholes' in which bioenergy CO2 emissions disappear:
 A geographical loophole whereby developed countries are not held responsible for carbon
dioxide emissions from bioenergy when feedstocks or fuels are imported from developing
countries. This occurs because developed countries report bioenergy emissions as zero in
national emission accounts for the energy sector, on the assumption that those emissions are
accounted for as land-use emissions by the country of export. Energy generators covered by
the Emissions Trading Scheme benefit from this loophole: if they use bioenergy, they are
exempted from the obligation to surrender emission allowances70, without any verification of
actual emission reduction.
 A sectoral loophole whereby carbon impacts from bioenergy are not considered when
feedstocks derive from activities not covered by the mandatory emission reduction targets of
the Kyoto Protocol or European climate laws. Again, bioenergy emissions are accounted for as
zero in the energy sector, on the assumption that they are accounted in the land-use sector.
Even when feedstocks originate from developed countries, bioenergy emissions may not be
fully accounted for as land-use emissions because only certain and not all land-use activities
fall within the scope of land-use accounts.
This state of affairs results in incentives for the use of bioenergy which are disconnected from the
verification of emission reductions. Developed countries benefit from the 'zero emission' treatment
of bioenergy, which helps them meet their binding emission reduction targets. Energy generators
covered by the European Emissions Trading Scheme benefit from a corresponding rule, with the
result that they are not required to surrender allowances against their bioenergy emissions71.
Because of the two loopholes indicated above, and of the more general considerations made in
sections 2.2 and 3.3, those incentives to use bioenergy are in most cases not premised on the
verification that emission reductions actually happen.
The life-cycle approach taken by the Renewable Energy Directive only partially addresses the
problem by focussing on direct land use changes caused by biofuels and bioliquids, but it leaves out
both indirect emissions from land-use change and all emissions from biomass, and as such does not
solve the problem.
The recent LULUCF Proposal from the European Commission could help acknowledge the different
carbon impacts of alternative uses of biomass by acknowledging that wood-based products store
70
Except for aviation biofuels which do not meet the sustainability criteria of the Renewable Energy
Directive, as explained in section 2.2.2.
71
See footnote 70.
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carbon while biomass for energy results in immediate emissions. But it is not (yet) connected to a
system of incentives which is capable of affecting behaviours. Moreover, the Proposal will not affect
bioenergy feedstocks imported from outside the EU and, in any case, it will not help to discriminate
between forms of bioenergy which have low carbon and low environmental impacts and others
which perform worse, and to allocate incentives accordingly.
In order to further address the shortcomings of current regulations, the following actions could be
undertaken within Europe:
 Amending the Renewable Energy Directive by introducing sustainability criteria for biomass
which take into account carbon impacts beyond direct land-use change. This could be done
via the introduction of a factor reflecting the time delay between emissions from biomass
combustion and reabsorption through plant photosynthesis. At the same time, the time
horizon of the methodology should be extended to reflect longer rotation periods for
biomass. Incentives should further be linked to verification in a way that stimulates good
management of the relevant sites in a long-term perspective.
 Amending the ETS Directive to eliminate the zero-emission factor for biomass and thereby
extend the ETS to bioenergy. In relation to co-firing, this could be done through comitology.
The inclusion of biomass would be in line with the objective of the ETS, would not be
incompatible with international agreements and would contribute to reducing the oversupply
of allowances currently depressing their price72.
The amendments recommended under both Directives should further make sure that emissions
occurring in Europe are fully accounted for irrespective of the energy source, allowing for
discounting only where evidence of removals is submitted in accordance with the methodologies
and procedures of choice.
72
For an analysis see ClientEarth, Bringing the ETS in line with reality: Making biomass emissions count through the Monitoring
and Reporting Regulation, 13.06.2011, available at: http://www.clientearth.org/climate-and-forests/climate-forestspublications/biomass-emissions-1384
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ClientEarth is a non-profit environmental law organisation based in London,
Brussels and Warsaw. We are activist lawyers working at the interface of law,
science and policy. Using the power of the law, we develop legal strategies and
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As legal experts working in the public interest, we act to strengthen the work of
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ClientEarth is funded by the generous support of philanthropic foundations and
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International Development.
For further information please contact
Janet Meissner Pritchard
Senior Lawyer
Climate & Forests Programme
t +44 (0)20 7749 5979
[email protected]
Giuseppe Nastasi
Legal Advisor
Climate & Forests Programme
t +32 (0)2 808 01 72
[email protected]
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