Seeing RED over biofuel changes brought in by EU

Certainly, in our own area, where much of the arable land has been subject to the meandering of the local rivers over the aeons, the variations in soil type and depth within a single field has led to an interesting patchwork of disparity in ripening of the crops.

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Perversely, where gravel swathes and rock heads led to the frazzling of crops during the June’s dry spell, the reviving rains of July led to sporadic secondary growth and these areas now stand out as green islands within the ripening crops.

I guess you could say that these are first world problems when compared with other areas of the world where Russian aggression in Ukraine and the drought and wildfires on the continent continue to represent the major drivers in the cereal markets.

But as oilseed rape crops move into the crosshairs of many combines, it looks like a fly could be set to crawl into the ointment on the home front for those growing for the renewable biofuel market.

For behind the scenes, the farm assurance schemes have been working hard in a race against time to secure continued market access for the estimated 120,000 ha of UK-grown crops which are destined for the growing renewable energy sector.

If changes to the European Commission’s rules which are set to affect UK growers can’t be sorted out through their efforts by the end of the year, the trade could face some considerable disruption.

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Now, in what is a pretty under-appreciated service, SQC and the UK’s other major cereal assurance schemes – through their affiliation with UKAS, the UK’s Accreditation Service – have so far filled the role required by the EU to ensure that biofuel crops are grown sustainably. An obligation which was brought in more than a decade ago to stop uncultivated land being ploughed up simply to meet the needs of this growing market.

I guess the move was probably prompted by the explosion of planting of palm oil in many tropical areas order to supply this expanding trade – which initially resulted in good deal of rain forest and other virgin habitat being ploughed up for planting vast swathes of these trees.

In an effort to be fair to all, though, the EU’s Renewable Energy Directive II (RED II) stipulated that to continue to have access to the lucrative biofuel market on the continent, growers had to undertake that they would not grow the crop on previously uncultivated land – and this had to be verified by an overseeing body with the credentials recognised to do this.

SQC has had the effective accreditation of RED accreditation as part of its scheme standards for 10 years or more and, regardless of whether or not we send out oilseed rape or wheat off to be used for biodiesel or bioethanol production, we’ve grown used to having that extra wee box at the bottom of out grain passports which has to be filled in for crops being used for this.

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And this is pretty much all the additional paperwork required for us to gain access to the main renewable energy market on our doorstep.

But, out of the blue, the European Commission decided back in June to bring in changes that meant only organisations operating within the EU would be able to provide the necessary validation to meet the Renewable Energy Directive – and brought in a deadline of December 31 for this new obligation to be met.

Of course, since Brexit, being a national body, UKAS effectively no longer meets the requirement to operate within an EU member state – and as a result is no longer recognised.

So, without a swift solution the move threatens what has been widely described as an important developing market both in the UK and Europe which not only provides farmers with alternative markets but which also helps governments to decarbonise the wider economy.

With less than six months to rectify the situation, SQC, Red Tractor and AIC have swung fairly swiftly into action and have made an urgent plea to the European Commission to continue to recognise UKAS and all that it represents through the assurance schemes in the UK.

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“Without recognition by the European Commission of UKAS, which will come to an end on December 31, 2023, there would be major disruption and cost to the biofuel and crops’ supply industry, and we urgently need this to be resolved,” SQC managing director, Teresa Dougall, told me.

While there were initially worries that the move was yet another case of 'Brex-shit', with the European Commission once again playing hard-ball with the UK, it now appears that the move was a bit of an oversight which simply wasn’t properly thought through – because UK-grown biofuel stock feed plays an important role in meeting the requirements on the continent.

While the best-case scenario for all parties would be for the European Commission to recognise the existing validation processes – a move which would allow trading to continue seamlessly – alternatives strategies are also being investigated.

Of course, these would require new procedures and validation bodies to be set up – which would, inevitably incur extra costs for growers, costs which would offer no real tangible benefits over the requirements already in place through the existing voluntary schemes.

However, these alternative measures do have to be investigated though as a means of staving off the considerable problems which could arise for anyone with contracts to supply energy crops beyond the end of the year current calendar year.

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These new arrangements include persuading some of the UK’s certification bodies to gain additional accreditation under an EU body which is recognised by the EC – as well as getting the UK’s Department for Transport (DfT) to recognise the UK-based RED II Schemes – which would at least allow continued compliance with domestic renewable fuels legislation.

For, while the thing isn’t totally clear, there’s a perverse possibility that the changes could stop producers supplying the domestic biofuel market as well.

But if none of these work out and the existing UK schemes lose their RED assurance status, then a new body altogether might need to be set up to validate RED II compliance for current certified companies in order to meet customer requirements.

The importance of reaching a sensible solution has been recognised by the assurance schemes and they have written to the UK’s Secretary of State for Transport, Mark Harper, to urge him to recognise that without some sort of compromise being reached growers could lose access to the EU as a vital outlet for biofuels.

“And, we have stressed that this would not only impact on farm incomes, but it would seriously undermine the UK’s ambition in renewable fuels and decarbonising the wider economy,” they warned the minister.

Of course, while we might not be in that market ourselves, there’s little doubt that the loss of an alternative outlet for OSR and wheat would be likely to push more produce onto the traditional markets – a situation which would have only one outcome on prices.

Let’s all hope for a sensible outcome …