US-EU Transatlantic Trade Offers Biofuel Incentives But Puts Climate at Risk, Say Critics

So much for the G20 recent pledge to stop climate change. According to an article published last week by the Guardian, EU transatlantic trade negotiators are already eyeing new loopholes that may allow member states to slip out of their obligations to reduce fossil fuel use within the next decade.

The proposed Transatlantic Trade and Investment Partnership (TTIP), which is designed to increase investment deals in the EU and the US has always had its vociferous critics, but the latest draft has environmentalists on alert. According to the Belgium-based advocacy group, Friends of the Earth Europe (FOEE), the new proposal, which arrived in form of a leaked draft, will work against energy efficiency by encouraging companies to "self-regulate" rather than comply with oversight requirements that are designed to improve energy efficiency, not just meet the minimum requirements.

"There is a body of evidence that suggests that self-regulation is not effective in order to achieve public-interest objectives," says FOEE.

A spokesperson for the European Environmental Bureau agreed with the assessment.

“Voluntary agreements have a place, but are generally ‘business as usual’ and no substitute for the real thing. If they became the norm, it would seriously harm our fight against climate change,” Jack Hunter told the Guardian.

But it is the impact that the TTIP could have on natural gas production that has the FOEE and other environmental organizations most concerned.

The TTIP analysts suggest, could open up the trade route for U.S. natural gas. And doing so, says the FOEE, would mean less focus on ramping back fossil-fuel energy production and "more fracking in the U.S."

Paolo Natali, Christian Egenhofer and Gergely Molnar, authors of "Energising the TTIP: Political Economy of the Trade Policy Rationale" point out in order for the U.S. to export natural gas, it must, by law, have a trade agreement in place. But that's assuming, say the authors, that Europe would actually be interested in U.S. natural gas -- something they suggest may still be open to speculation. "LNG exports to Europe will depend on regional pricing, which however is in flux right now. Europe would have to want LNG for this pattern to be put in place."

What is more likely to garner interest, however, say the authors, is the U.S.' resilient biofuels industry, which remains one of the largest in the world. According to the U.S. Energy Information Administration, the nation's biodiesel production stood at 119 million gallons in April 2016, slightly down from the previous month. With almost 100 biodiessel plants in production, the U.S. offers a viable market to a hungry region.

But the FOEE isn't the only organization keeping an wary eye on the TTIP's fine print. Other critics find the availability of "get-out" clauses that don't demand absolute adherence to climate commitments worrisome. Clauses that allow participants to consider the risk of trade distortions as countries adjust to new energy policies also may allow them an "out" to sticking to cleaner energy.

The vagueness of wording, says Cecile Toubeau, who serves on the European Commission's advisory panel, points out that the simple answer is ensuring there is a chapter that addresses energy policies and climate mandates in "a legally binding chapter. Without a concrete timeframe to end fossil fuel subsidies,"  notes Toubeau, "it will be impossible to stop our oil addiction and therefore uphold the Paris deal.”

While Natali, Egenhofer and Molar's research was released as much as year prior to the recent TTIP leak, their analysis offers one more insight into whether the global climate is really at risk from the transatlantic trade agreement: Europe's own fuel quality directive. Under EU law, potential fuel quality imports are rated by their carbon intensity. Fuels coming from Canada's tar sands or the U.S. crude sources would face opposition to entry. That's not to say those barriers couldn't be relaxed, note the writers. But EU guidelines would probably have to be rewritten -- or removed to allow for U.S. fossil fuel imports. The EU Fuel Quality Directive, while practical in its design, the authors point out, has still to be converted to enforceable standards.

Images: 1) Flickr/USDA; 2) Flickr/Global Justice Now