Renewable Energy Directive and the challenges for the Global Biodiesel Industry

Master's Thesis from the year 2012 in the subject Energy Sciences, grade: 1,0, École des hautes études commerciales de Paris (FGV Sao Paulo), language: English, comment: Area of sustainable Supply Chain Management, Sustainable Development, Commodity Trading and International Studies , abstract: In response to climate change and unsustainable energy consumption, the European Parliament launched a climate and energy package in 2009. This included the 20:20:20 Energy Strategy aimed at decreasing the effects of climate change, in particular by lowering greenhouse gas (GHG) emissions by 2020. This 10-year action plan proposes measures to increase the current efficiency levels of energy use and raises the share of renewable energies within the energy mix for all 27 EU Member States. As a result the increased use of biofuels, particularly in the transport sector, will be an important part of a more complex framework. Although biofuels represent only two per cent of total transport fuels used, political incentives, technology and efficiency improvements could increase this by eight per cent in Europe by 2020. In line with the 20:20:20 Strategy, the Renewable Energy Directive (RED) was introduced to regulate the overall biofuel market, amongst others. Based on the RED s definition of sustainability, different certification schemes emerged, aimed at creating a uniform biofuel standard within Europe. At present, the overall scale and scope of environmental and social impacts associated with the biofuel supply chain are not well defined and this will be evaluated within this thesis. Furthermore, close ties between the biofuel supply chain and other sectors including food and crude oil industries lead to associations with issues such as deforestation, pollution and food supply shortages. Thus, this thesis will analyse whether RED actually supports such a low-carbon pathway or it mainly supports the local industry. As such, the RED has been critically regarded as a market protectionist mechanism for the European agricultural and biofuel industry against the comparatively more competitive biodiesel imports from Argentina and Indonesia. Finally, the EU set a tone with its Directive, encouraging international collaborations with other governments to work towards sustainable energy measures as part of a universal climate change solution.