EU biofuels going nowhere fast
According to the European Commission (EC), the 2014 share of renewables in transport, double counting included, was 5.7 percent. The target for 2010 was 5.75 percent.
Worse is that there is nothing to suggest that the situation in the EU will improve any time soon, judging from the discussions during Platts 5th EU Biofuels Seminar in Geneva, Switzerland in mid-April.
Caroline Midgley, Head of Biofuels and Bio-based Chemicals Research, LMC International discussed the effects on ethanol and biodiesel consumption in Germany with its GHG mandate. 2015 data indicates that ethanol has not been disadvantaged whereas biodiesel consumption fell by 6.4 percent despite a 2.6 percent increase in diesel consumption suggesting the mandate had reduced demand by 9.0 percent.
– The lesson from Germany is that accurately quantifying the GHG savings from biofuels is key. As technology improves the GHG savings of biofuels over time, such mandates will tend to reduce physical demand for biofuels, Midgley cautioned.
Kathyln Saillen, Biofuels Analyst with Platts gave a quick review of the Asian ethanol markets many of which have introduced blend mandates or increased existing ones. The region is the world’s fastest growing transportation fuel market offering some hope for US and European producers who see stagnating domestic markets.
– Living in a low oil price environment is a game changer. Demand is available, even though new capacities are being built, ethanol supply cannot keep up with the increasing gasoline consumption, she said.
Saillen pointed out that in the face of low gasoline prices mandates are becoming more expensive to achieve, blending may not make economic sense, consumers may question them prompting governments to revise their ethanol programmes.
It sounds a familiar scenario and is why the EU policy recommendation for an energy products taxation based on the energy content and carbon footprint of the fuel, suggested by ePURE Secretary General Robert Wright is urgent. It “would allow for a level playing field between fossil and non-fossil energy sources, and between alternative fuels.”