Indirect Effects of Biofuel Production

While bioenergy is a key form of renewable energy for low carbon sustainable development, the recent increase in bioenergy production has led to concerns about the sustainability of such large scale production. Key concerns include deforestation for energy crops, greenhouse gas (GHG) emissions from land-use change, impacts on the local environment and competition with food. On the other hand, biofuel production can contribute to economic development and energy security, e.g. through job creation, value addition and displacement of fossil fuel imports. The effects of bioenergy production and consumption can be divided into direct effects and indirect effects.

One of the main direct effects is direct land-use change (LUC). A direct LUC occurs when new areas (e.g. forest areas or grasslands) are taken into production to produce the additional feedstock demand for bioenergy. This can have both positive and negative consequences on aspects such as biodiversity, carbon stocks and livelihoods.

The indirect effect that is currently dominating much of the debate on the sustainability of biofuels is indirect land-use change (ILUC). ILUC can occur when existing plantations are used to cover the feedstock demand of additional biofuel production. This displaces the previous productive function of the land (e.g. food production). This displacement can cause an expansion of the land use for biomass production to new areas (e.g. to forest land or to grassland) if the previous users of the feedstock (e.g. food markets) do not reduce their feedstock demand and any demand-induced yield increases are insufficient to produce the additional demand. Where this indirect LUC will take place is uncertain and is out of control of the bioenergy sector.