Scheme for Mitigating Indirect Land Use Change (ILUC) Risks in the Use of Biofuels Proposed

The risk associated with "Indirect Land Use Change (ILUC) Risk" in the production and use of biofuels has been a contentious issue in the assessment of biofuels sustainability. Within the context of biofuels production, the International Union for Conservation of Nature describes ILUC risk as: "the risk that expanding biofuel production could displace some agricultural production activities onto land with high natural carbon stocks, such as grasslands and forests, leading to significant greenhouse gas emissions, biodiversity loss and potentially threatening food security". Indirect land use change is also said to be difficult to observe or measure directly.

The European Energy Review website mentions a report published by Ernstand Young, (and commissioned by a consortium of industry/NGO partners) which aimed to: (1) establish the facts surrounding the issue of ILUC by examining existing literature, and (2) investigate "issues concerning implementation of practical ILUC mitigation measures and their effectiveness in biofuels production". The report indicated that "indirect land use change (ILUC) risks can be mitigated by incentives that encourage existing and additional sustainable practices in biofuels production, as well as other sectors that use agricultural commodities". The proposed scheme is said to be different from the options being considered by the European Commission (EU) to address ILUC issues, but it provides opportunities to combine incentives with penalizing provisions for those who do not take action. The proposal involves the application of an "ILUC mitigation credit scheme", which could work alongside with, and remain subject to the existing polices of the EU Renewable Energy Directive. This may include the extension of the application of carbon incentives established under the Renewable Energy Directive. The complete report can be accessed from the URL posted above.

Related information on Land Use Change: http://www.isaaa.org/kc/cropbiotechupdate/article/default.asp?ID=8230.