On April 28, 2015 European parliament finally gave its consent on a new law capping the food crop based biofuels at 7% within its total target of 10% renewable transport energy by 2020. The member states can even decide on lower proportions. The earlier legislation allowed up to 8.6% biofuels in the total renewable transport energy by 2020 while currently 4.7% biofuels are under supply.
The argument of food vs fuel and the high amount of greenhouse gas emissions due to land use change and deforestation went against the food crop based biofuels. The new legislation will limit the palm oil, soy, rapeseed and corn based biofuel industry. As EU is the biggest importer of oil for biodiesel the new legislation will also affect the major transporter of oil for biodiesel to EU like Indonesia, Malaysia and Argentina.
The use of land for growing crops for biofuel purposes pushes the clearing of more land for food crops production. This is termed as Indirect Land Use Change (ILUC) and leads to increase in total greenhouse gas (GHG) emissions as against the decline of GHG emissions which was the basis of considering biofuels eco-friendly and pushing them initially.
Under the new law the European Commission and the producers will have to report the Indirect GHG Emissions. This will supposedly bring the transparency for assessing the impact of the policy.