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EU RED II: Trade protectionism and lost sustainability vision
Indonesian industry also saw the opportunity to contribute to sustainability by developing its own biofuel business.
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The government is planning to issue a regulation on the production of 25-percent biodiesel ( B25 ) early next year. Once issued, the policy will replace the current regulation on 20-percent biodiesel ( B20 ) production. (Shutterstock/File)
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n many respects, the European Union’s first Renewable Energy Directive (RED) represented a beacon of sustainability for Europe and for the EU’s major trading partners. The emphasis on renewable energy and the use of edible vegetable oils for biofuels resulted in substantial investment into the sector, not just in Europe but also internationally.
Europe indeed took the lead in encouraging sustainability and European industry, and was quick to support the policy through large capital investment that generated jobs in both the upstream cultivation of oil seeds and downstream biofuel production. It was an industry that was willing to invest and innovate in this important sector in support of EU policies.
A number of countries also replicated the EU policy approach by setting their own domestic biofuel targets in an effort to reduce their use of fossil fuels, and this in turn encouraged the development of innovations in other alternative energy sources. Among others, Indonesian industry also saw the opportunity to contribute to sustainability by developing its own biofuel business to supply not only the European market, but also the domestic market.
In spite of all the progress, by no means does RED II constitute an inspiration for sustainability, but instead appears to be an attempt to reorientate EU industry away from first-generation biofuels to alternatives that also require substantial investment. It is hardly surprising that the EU biofuel industry has responded with caution to RED II, as the return on investment (ROI) has barely been recovered for existing investment.
