IEA: Carbon accounting is of increasing importance in biofuel policies around the world

The International Energy Agency (IEA) recently released a new report ‘Carbon Accounting for Sustainable Biofuels’. The study, prepared in support of Brazil’s G20 presidency, examines complexities related to carbon accounting of biofuels and discusses regulatory approaches for accounting biofuel carbon intensity across various regions. It concludes that policies need to adopt pragmatic approaches to foster verifiable and performance-based continuous improvement of sustainable biofuels.

The report is available at: https://www.iea.org/reports/carbon-accounting-for-sustainable-biofuels

The development of sustainable biofuels is at a pivotal juncture. They are recognised for their important role in decarbonising the transport sector – particularly for their potential to help reduce aviation and shipping emissions, and for their complementarity with EVs and energy efficiency measures in road transport. Yet, the climate benefit of biofuels depends largely on the carbon intensity of their supply. Sound regulatory frameworks supported by transparent, science-based carbon intensity calculations will be required to attract the investments needed to scale up sustainable biofuel production.

Main take-aways:

• The development and use of transparent and internationally agreed GHG accounting is key for the deployment of sustainable biofuels. Large-scale deployment of biofuels, especially crop-based, raises sustainability concerns in some areas. These concerns can undermine the credibility of biofuels as a sustainable option, and in some cases pose a barrier to investment and trade. Using carbon accounting for policymaking purposes is complicated by mixed reports on biofuel GHG emission results and the lack of consensus across methodologies.
• GHG accounting is handled similarly across most biofuel policy frameworks, except regarding land use change. Results for “core LCA” values (that represent emissions associated with the supply chain, excluding land-use change) can vary widely among similar biofuel pathways, but methodologies are robust, and causes are well understood. The three main causes for the wide ranges in core LCA results are related to regional differences, methodological choices, and data input quality and representativeness.
• Impacts of land use change can be considerable and are a major source of disagreement across different policy frameworks. Emissions caused by direct land use change can be observed and quantified. However, indirect land use change deals with international economic dynamics that need to be modelled and cannot be measured or verified. Indirect land use change is the main cause of disagreement around biofuels GHG accounting, due to the high uncertainty of results and the risk of arbitrariness when attributing an indirect land use change (iLUC) value to a certain feedstock and biofuel pathway. This calls for alternative policy approaches.
• Biofuel carbon intensity can be improved with supportive policy frameworks and appropriate verification procedures. Several aspects of biofuel production can be improved to reduce GHG emissions, for example, more sustainable farming practices and using renewable energy to supply process heat and electricity demand. New technologies such as carbon capture, coupled with biofuels production, can potentially lead to negative GHG emissions values. However, such interventions are likely to increase costs and require market and policy frameworks that reward biofuel pathways with higher GHG emission reductions, underpinned by measurable and verifiable lifecycle data.

• Policies need to enable the measurement and verification of data for GHG accounting. Relevant frameworks should foster consistent application of system boundaries across different biofuel pathways based on various feedstocks (including wastes and residues), manufacturing processes and coproducts, as well as the fossil fuels they replace. Collection and use of data that correctly reflect actual practices and regional conditions should be systematically encouraged.

• To significantly accelerate the deployment of sustainable biofuels, policies should stimulate upscaling of the best technologies as well as promoting continuous improvement based on up-to-date GHG performance metrics. More specifically, governments should consider:

• • Establishing policies that reward better GHG performance and drive continuous improvement
  • Prioritising support to measures with significant GHG reduction potential that can be quantified with high certainty and fostering additional measures with less certain quantification while ensuring robust verification steps.
  • Addressing indirect land use change (iLUC) concerns by adopting risk-based approaches in the near term and striving to develop global land use policies over time.
• Carbon accounting should be part of a broader portfolio of policies encompassing other sustainability criteria and compliance methods to minimise undesired impacts. Policies should protect food and water security, monitor and shelter biodiversity, while taking other socioeconomic factors into account. Biofuel policies would need to be designed to be flexible during periods of tightness in global agricultural markets, to avoid amplifying the size or duration of agricultural price spikes.
• Enhanced stakeholder engagement and international cooperation is key for increasing consensus on carbon accounting for sustainable biofuels. This includes further strengthening active collaboration among international organisations such as the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO), fostering cooperation with agriculture policy developers, including biofuels and relevant coproducts in broader policies promoting an integrated circular (bio)economy, and encouraging consistent protocols and regulations for carbon accounting in voluntary carbon markets.