German case study on agrofuels

presented by Mireille Hönicke, BUKO Agrar KoordinationAugust 31st 2009

at the International WorkshopGlobal Agrofuels: Sustaining What Development?

30 August – 3 September, 2009 in Maputo, Mozambique

Content

• Agrofuels in Germany Government promoting agrofuels German business Stimulating global agrofuel production

• Agrofuel policy: key arguments and assumptions

• German development cooperation

• Summary & Conclusion

Agrofuels in Germany

• Leading agrodiesel producer and consumer country Germany imports 50% of its biomass used for energy

• In 2007 formulation of ambitious climate targets reduce GHG-emissions by 40% in 2020

• Promoting agrofuels Since 2004 tax incentives, farming subsidies and

from 2007 on binding mixing quota Biofuel Quotas Act: 5.25% in 2009 / 6.25% in 2010-14

• In 2007 agrofuels had a share of 7.3% of total transport fuel

Agrofuel targeting from 2007 to 2009

Sources: BMU, 2009a; BMWi / BMU, 2007.

According to the German Automobile Club (ADAC): 3 million cars in Germany were technically not aligned to use an increased ethanol blending up to 10%.

December 2006 Biofuel Quotas ActAgrofuel target: 6,25% in

2009 until 8% in 2015

August 2007Program for Energy and Climate)

17% agrofuel use in transport in 2020.

April 2008Minister of Environment

renounced the agrofuel target12-15% in 2020

June 2009Approval of adjustedBiofuel

Quotas Act from 2006

5,25% in 2009

6,25% in 2010-2014

Government promoting agrofuels

• New energy strategy• transport sector need to be independent from fossil fuel• reduce GHG-emissions

Growth rate of transport emissions undermine the GHG-reduction targets (EU Renewables Directive: 20% by 2020)

Minister of Environment:

“the former discussion about increasing biofuel mixing quotas […] was more about meeting the interests of agriculture to provide a

stable and growing biofuel market and a special interest of the car industry.”

Transport GHG emissions

Source: European Environment Agency

The „Roadmap Biofuels“

• 2007: joint strategy from government, automobile and mineral oil industry, agrofuel sector and agriculture.

Massive criticism came from German CSOs, since they were excluded from this process.

increase agrofuel target

2nd generation

agrofuels (BtL)Sustainability &

GHG-saving potential

German business• Agrofuel sector:

problems in using overall capacity: changes in tax incentives, reduced quota, financial crisis, low oil prices.

• Automobile- and mineral oil industry: promoting 2nd generation agrofuels (BtL) Provide environmental and climate friendly image

BtLs are promoted as a secure and sustainable energy supply

“put no threat on food production and reduce GHG-emission by 90%.” (Volkswagen)

Stimulating global agrofuel production

• Export Initiative: Technology transfer to developing countries

• German development cooperation supports investments Public private partnership projects (PPP): German agrofuel

producer PROKON is cultivating jatropha in Tanzania “The project is sustainable, because it creates an additional and

secure income for the farmers.”

• Energy agreement with Brazil Securing stable supply with raw materials Agrofuels: trade issues and certification CSOs: contribution to destroy eco systems and

foster human rights violations

Agrofuel policy: Key arguments and assumptions

(1) The use of agrofuels will reduce GHG emissions and contribute to climate change mitigation

(2) The expansion of agrofuel production will improve Germany’s energy security

(3) The production of agrofuels will contribute to rural development in the global south German development cooperation

Assumption 1: Reduce GHG emissions

Government:

• Optimizing GHG-reduction potential and energy efficiency• 2nd generation agrofuels are more efficient• Sustainability criteria will protect the climate:

minimum of 35% GHG-savings

Criticism:

• Parliament advisory council: low GHG savings of agrofuels

• Policy should favour the use of biomass for heat and electricity

• CSOs demand at least 50% GHG-savings

• cultivation of energy crops on set-aside land and ploughing of permanent grassland increased

• Indirect land use changes are not included in the German ordinance

Assumption 2: Improve energy security

Government:

„Biofuels are currently the sole renewable alternative in the mobility sector.“

Criticism:• Rapeseed cultivation is almost exhausted (12% of total

cultivation area)• Without changing the energy mix (heat and electricity), energy

security is not much enhanced• Agrofuels produced in Germany are not competitive

promotion of energy security at the expense of a locally decentralized use of biomass and

an increased dependency on imports

German development cooperation

• In 2006 promoting agrofuels as a large and sustainable contribution to world energy economy

• GTZ pushed agrofuel development in Tanzania causing already severe problems for the people and environment.

• In Germany public discussion about poverty reduction and combat against hunger CSOs: “The business is done by multinational corporations and

great land owners.” Debate on „Food versus Fuel“ contributed to the reduced agrofuel

targeting

German Ministry for Economic Cooperation and Development (BMZ)

• In 2008 developed strong criteria to assess agrofuel projects Priority is given towards the right to food

• Promoting a regulatory framework: sustainability criteria National food security and biomass strategies

• With current agrofuel production it is questionable whether these mechanisms take effect

• BMZ slows down the implementation of agrofuel projects

GTZ agrofuel projects

• Two PPP projects with Brasil Ecodiesel and with Petrobras strengthen small farming sector and open up new markets

• Supporting the Brazilian Biodiesel Program: Inclusion of small-scale farmers through the Social Fuel Seal

• So far only 24% of total production from small-scale farming

• Main crop used for agrodiesel is soy• GTZ projects: low productivity and

insufficient increase in income Ownership, land property relations

and access issues?

Summary & Conclusions

• Parliament advisory council recommends to stop agrofuel mixing quota

• Government trying to save agrofuel targets through technology solutions (BtL) and adaptive measures

• Neglecting domestically decentralized agrofuel and biomass production

• Increasing dependency on imports and stimulating global agrofuel production at the expense of food security and nature protection

• BMZ developed criteria to assess agrofuel projects• Further debate on impacts of agrofuels: inclusion of small-

scale farmers.

Thank you very much for your attention!