January 12, 2015
By Nusa Urbancic, Transport & Environment‘s energy programme manager.
We live in a world where governments struggle to address climate change. Scientific advice on what needs to be done to stop warming our planet is very clear: stop burning fossil fuels. Even the rather conservative International Energy Agency (IEA) agrees: we need to leave more than two-thirds of proven oil reserves in the ground to avoid catastrophic climate change. It would seem logical that we start with the dirtiest and costliest oil, euphemistically dubbed ‘unconventional oil’. But logic does not always guide political decisions – they are often more about power, influence and how many bucks someone has to oil the lobbying machine. The Fuel Quality Directive (FQD) – a EU law devised to reduce the carbon footprint of transport fuels – is the latest victim of the power of vested interests over science and the common good.
We have worked on the FQD from the start and have always seen it as a smart piece of legislation. This is a law that could have been a technology-neutral way of bringing cleaner fuels to market without picking winners. Policymakers would only have to ensure that the carbon footprint of different fuels was aligned with the best available evidence and then let the market decide which fuels are worth investing in and which ones should be left in the ground. The scientific advice was unquestionable: the knowledge available was robust enough to label the significant variations in the carbon intensity of different fossil fuel sources, including higher values for fuels such as coal-to-liquid, tar sands, oil shale and gas-to-liquid.
Once again, the call of the scientific community fell on deaf ears: following almost eight years of heavy-handed lobbying by Canada, the US and oil majors, in October 2014 the Commission re-tabled a diluted proposal that fails to discourage oil companies from using and investing in the world’s dirtiest oil.
The European Parliament tried hard but failed to veto the watered-down proposal. Now EU countries can finally implement a law that was enacted in 2009 – it’s noteworthy that this was the last unimplemented law of the 2008 Climate and Energy package proposed by the first Barroso Commission. The result is rather poor: emissions from ‘unconventional’ fuels will not be properly accounted for, while the other critical part of the law – how we account for indirect emissions from biofuels – is still being discussed by the Parliament and the Council. In a perfect world, the FQD would follow the best available science and enable fuel suppliers to make their choices based on the true environmental impacts of fuels. In practice, we will probably see some ‘unconventionals’ coming to Europe and loads of unsustainable biofuels to meet the FQD’s 6% reduction target.
We take three key lessons from the lobbying battle:
1. The technology-neutral approach failed due to the massive amount of lobbying
First and foremost, the passing of this law marks the failure of the technology-neutral approach, which used to be quite a holy grail for the Commission. The technology-neutral approach looks great in theory: politicians just set targets, do not pick winners, all that needs to happen is for the science to get the numbers right and the market will do the right thing. But real life works with imperfections. It was impressive to see the amount of ‘evidence’ that was fabricated by businesses and third countries, chiefly Canada, to muddy the scientific waters. In a nutshell, they argued that either unconventional oil values or ILUC values were not the “right ones” or that there are other sectors that are equally bad or, in some cases, worse (for example, Russian oil). The Commission, who should have been the guardian of science, failed to defend its own research and impact assessment and caved in to special interests. This makes it very difficult for the Commission to publicly defend its technology neutrality. We think that the Commission should learn from the oil industry’s utter refusal to clean up their products. Much more emphasis should be placed on electrification of transport in combination with renewable electricity sources, which are truly domestic and truly sustainable – a no-regret option.
2. Trade deals threaten environmental legislation
The FQD is the first casualty of negotiations of free trade agreements with Canada (CETA) and with the US (TTIP). These negotiations have given these countries and their respective oil industries additional venues to influence the outcome of the FQD. While Canada was very candid about its intentions, stating publicly that it will not hesitate to defend its interests in front of the WTO, US officials were much more subtle. They publicly said that they were only concerned about the transparency of the process, but we have the evidence that they played a much dirtier game behind the scenes, pushing for the FQD to be weakened. The Commission dropped the ball because of this pressure, and not because the original proposal would have been too costly or too difficult to implement. It clearly shows that much more public scrutiny is needed on how trade negotiations impact on the democratic right of countries to regulate.
3. More democratic decision-making is needed
The peculiarity of the comitology procedure and the immense power that it gives to the Commission made it very difficult for progressive member states and the Parliament to improve the proposal. Once the Commission decided to weaken the FQD, the only thing the other two institutions could do was to veto it – with the risk of never getting anything better out of the Commission. There is a case to make this process more democratic – after all we are deciding on the future of the planet and not just a small technical issue, as is often the case in comitology. The same conclusion could apply to the process that led the Commission to unilaterally scrap the decarbonisation target for fuels post-2020 in its communication on 2030 climate and energy framework. They first got rid of the target and then used this decision to argue for weaker implementing measures until 2020.
How to move ahead
Perhaps it is too early to proclaim technology neutrality as dead. It is now up to the new Commission to decide whether they will revive the FQD after 2020 or not. In any case, there are some no-regrets measures that they can and should take. These are: an aggressive push for the electrification of transport; tougher efficiency standards for all vehicles; and finalisation of the reform of the biofuels policy including the phase-out of high-ILUC biodiesel. On oil it is clear that demand should be curtailed – transport is Europe’s biggest client for oil companies – and that the most polluting unconventional oil should stay in the ground. Reporting trade names in the FQD is the first step in this direction, but it should be strengthened and made mandatory in a way that oil companies are accountable for what they place on the market. With the commitment of at least a 40% domestic greenhouse gas (GHG) reduction by 2030, transport will have to cut its GHG emissions aggressively and there is no space for ever-dirtier fossil fuels in this equation.transenv