EC’s Winter Package: an insoluble blend for transportation biofuels
Despite significant growth of renewable transportation fuels since 2009, European road, rail, water and air transportation fleets are still 94 percent dependent on fossil oil derived fuels to run. The proposed revision to the Renewable Energy Directive (RED) seeks to address this but for biofuels it's a seemingly insoluble blend.
According to the European Commission (EC), the proposed revisions to the Renewable Energy Directive (RED) aim to adapt the framework for renewable energy development to the 2030 perspective, provide certainty and predictability to investors and address the potential of renewable energy in a number of sectors. In order to “foster the decarbonisation and energy diversification” of the EU transport sector, the EC proposes the following in the revised RED:
- Introduction of an obligation on European transport fuel suppliers to provide an increasing share of renewable and low-carbon fuels, including advanced biofuels, renewable transport fuels of non-biological origin (e.g. hydrogen), waste-based fuels and renewable electricity. The level of this obligation is progressively increasing from 1.5 percent in 2021 (in energy terms) to 6.8 percent in 2030, including at least 3.6 percent of advanced biofuels. Preferential rules apply to advanced aviation fuels in order to support their deployment in the aviation sector (e.g. their energy content is accounted 20 percent more).
- Introduction of a cap on the contribution of “food-based” biofuels towards the EU renewable energy target, starting at 7 percent in 2021 and going down progressively to 3.8 percent in 2030 to minimise the Indirect Land-Use Change (ILUC) impacts.
- Introduction of national databases to ensure traceability of the fuels and to mitigate the risk of fraud.
As can be expected, the Commission’s proposals have had mixed reactions. The proposed “food-based” biofuels cap digression, from 7 percent in 2021 to 3.8 percent in 2030, has been met with mutual but diametrically opposed disappointment from biofuel producers and biofuel opponents.
“Ignores science and jeopardises biofuel investments”
According to a strongly worded statement from the European Renewable Ethanol Association (ePURE), the proposal “ignores science and jeopardises biofuel investments”. Furthermore, it is in conflict with the proportionality principle and subsidiarity of the EU Member States, as per the EU Treaty, in so far as it conflicts with the Member States ability to decide upon their own renewable energy mixes.
ePURE also points out that the proposed phase out means that the Commission has now proposed four different changes to the targets for renewable energy use in EU transport since the adoption of its first biofuels policy in 2003. It also backtracks on the compromise agreed by the EU institutions as part of the revision of the Renewable Energy Directive in 2015, which Member States have only begun the process of implementing.
This “permanent policy flux” is diametrically opposite to the Commission’s Better Regulation Agenda and has created an “impossible policy environment” that significantly jeopardises further investments in both conventional and advanced biofuels in Europe.
– This political decision is not justified and ignores the Commission’s own science which shows that ethanol is a low carbon fuel. It is purely a political decision that runs contrary to the Commission’s better regulation agenda. The biofuels sector feels betrayed by the Commission because of its complete disregard for the investments made in good faith on the basis of EU policy, said Robert Wright, Secretary-General of ePURE.
ePURE also highlighted that conventional ethanol produced in Europe has greenhouse gas (GHG) savings of 64 percent compared to petrol and the Commission’s research proves that it has a low risk of negative land use consequences.
– The Commission is totally detached from reality if it expects that its proposal will result in significant investments in advanced biofuels, given that most of the potential investors have already been burned by the Commission’s previous biofuels u-turns. ePURE calls on Member States and Parliament to seek the promotion of advanced biofuels in addition to conventional biofuels, said Wright
Serious threat to agriculture
In a joint statement the Vegetable Oil and Proteinmeal Industry (FEDIOL), European Biodiesel Board (EBB) and European Oilseed Alliance (EOL) also expressed disappointment highlighting that the proposal will result in a “dramatic” reduction of animal-feed protein worsening the current EU protein deficit, deprive farmers of an income stream and threaten rural jobs.
– This proposal, which does not take into consideration protein-generating biofuels, will have a dramatic impact on EU agriculture given the positive externalities of conventional biofuels produced from domestic feedstocks in reducing the animal feed and protein deficit in Europe, said Philippe Dusser, Secretary General, EOA.
The trio suggests that the proposed differentiation between biodiesel and bioethanol is “unjustifiable” as it is not science based – ILUC is a “theory” that cannot be observed nor measured. Long-term stability and legislative certainty can be achieved to the overall European value chain only by maintaining a 7 percent target for protein-generating biofuels, reversing the subsidiarity granted to the Member States which would allow them to differentiate between biodiesel and bioethanol and promoting a gradual and realistic phasing-in of advanced biofuels argues the trio, citing the US Environmental Protection Agency (EPA) decision this week to increase biofuels blending obligations in the US as “the best way” to achieve decarbonisation.
– The exclusion of conventional biofuels from the incorporation obligation of fuel suppliers is unacceptable. With the high costs for decarbonisation in transport, this exclusion would likely mean an increase of fossil fuels in transport due to lack of availability of advanced biofuels, and abandonment by the EU of the COP21 ambitions and objectives, said Raffaello Garofalo, Secretary General, EBB.
The European Farmers European Agri-Cooperatives, Copa – Cogeca also rejected the proposed conventional biofuel target cuts. It warned that it would reduce the EU’s ability to meets its climate goals and to decarbonise the transport sector while having a negative effect on the EU agricultural markets, mainly on the oilseeds sector and on the EU’s domestic supply of protein-rich by-products used in feed.
– This is because only a part of the rapeseed, wheat, maize and sugar beet is used to produce biodiesel or bioethanol. The rest is used for feed. Biofuels give farmers another outlet for their produce and an alternative source of income which is especially important now given the surpluses on the grain market, said Klein, Chairman of Copa & Cogecas Working Party, adding that the transport sector will continue to need liquid fuels in the future.
– Vehicles that run on electricity are still in their early stages of development and are not feasible in the long term for heavy duty trucks, agriculture machinery, air and marine transport. That is why we urge EU Ministers and MEPs to ensure that the limit is kept at least at 7 percent until 2030 for conventional biofuels with a review clause in 2025 to take into account the effective scale of advanced biofuels on the market, Klein said.
Doomed to backfire
Representing the interests of the world’s largest sugarcane ethanol producers, the Brazilian sugarcane industry association UNICA cautioned that the proposed policy is “doomed to backfire”. The Commission’s indiscriminate cutting back of conventional biofuels, some of which can cut GHG emissions by at least 70 percent, is “putting into jeopardy” the Commission’s plan to develop advanced biofuels. Allowing Member States to set different limits for different types of biofuels is very likely to lead to a “legislative patchwork” across Europe, with a subsequently negative impact on investment and on the homogeneous spread of higher biofuels blends. Moreover, it would still sanction first generation biofuels with high GHG emissions savings with a phase out, only at a different pace.
– The Commission falls short of making an effective differentiation between types of first generation biofuels and misses the opportunity to promote those that perform best in terms of GHG emission savings. The push for advanced biofuels is welcome and we hope that the industry will be able to deploy them according to the indicated timeline, said Géraldine Kutas, Head of International Affairs at UNICA.
Favours unproven biofuels over clean electricity
Opponents of biofuels in general and first generation in particular were equally disappointed. The European Federation for Transport and Environment (T&E), an umbrella NGO whose mission is “to promote at EU and global level, a transport policy based on the principles of sustainable development” focused its disapproval on “virgin oil” and palm oil derived biodiesel, claiming that the latter is driving deforestation and peatland drainage in Southeast Asia, Latin America and Africa.
– Despite all its promises four months ago about electrifying transport and stopping bad biofuels, this proposal means our cars and trucks will be burning almost as much palm oil and other food-based biodiesel in 2030 as they do today. The Commission again rushes into a huge market for new and unproven biofuels, but it does nothing to reward suppliers of clean electricity in transport. The inconvenient truth is that this proposal will not reduce Europe’s transport emissions to any meaningful extent, said Jelena Simjanovic, Clean Energy Director of T&E.
– Europe’s promotion of environmentally and socially harmful biofuels is a scandal, recognised by pretty much anyone who is not directly making money from the subsidy system. It is time for Europe to turn off the subsidy tap once and for all, said Ariel Brunner, Senior Head of EU Policy, BirdLife Europe & Central Asia, part of the world’s oldest and largest nature conservation NGO, BirdLife International.
Advanced producers welcome binding target
For those in the advanced biofuels space the response was more positive given the proposal to introduce an obligation on European transport fuel suppliers to have at least 3.6 percent advanced biofuels by 2030 with “preferential rules” for advanced aviation fuels. In a statement Leaders of Sustainable Biofuels (LSB), a coalition of seven European advanced biofuel producers welcomed the proposal as a “significant step” to enhance EU’s innovation capacity and stimulate green growth.
In particular LSB welcomed the binding target for advanced biofuels as “indispensable for creating a stable and predictable business environment and trigger new substantial investments” in advanced biofuels production capacity noting that “in this context the Commission proposal sets the right direction and framework for the advancement of advanced biofuels in Europe”.
Aviation and marine sectors
In a statement Finland-headed Neste, Europe’s largest renewable diesel producer and not a member of LSB, also welcomed the advanced biofuels mandate proposal, suggesting that it would secure the necessary predictability for companies to continue the long-term planning of operations and investments. In particular the company welcomed the eligibility of the aviation and marine sectors within the mandate as eligible
– As a whole, the Commission’s proposal consists of good propositions that support biofuels use and development in Europe. Neste wants to continue the discussions on enabling the industry to use as wide raw material portfolio as possible. This is likely to be brought up in the further work on the proposal. Compared to other players within the biofuels industry, we already have an exceptionally wide raw material portfolio, said Kaisa Hietala, Executive Vice President of Neste’s Renewable Products business area.