EU laws requiring member states to use “at least 10%” renewable energy in transport will be scrapped after 2020, the European Commission confirmed, hoping to set aside a protracted controversy surrounding the environmental damage caused by biofuels.
The European Commission will table a revision of the Renewable Energy Directive at the end of 2016, aiming to further push renewable sources like wind and solar across the European Union.
On transport, “we will look specifically at the challenges and opportunities of renewable fuels including biofuels”, said Marie C. Donnelly, Director for Renewables at the European Commission.
The current directive, adopted in 2008, requires each EU member state to have “at least 10%” renewable energy used in transport by 2020 – including from biofuels and other sources like green electricity.
This has drawn criticism in Britain, where reaching the 10% target will require doubling current biofuel supply, adding a further penny per litre on pump prices, according to a leaked memo by the Department for Transport.
But the 10% target will be dropped in the new directive, Donnelly told a breakfast seminar organised at the European Parliament on Tuesday (3 May).
“What’s not going to be in the text is a target for the transport sector,” she said, confirming a decision by EU leaders in October 2014 to have only one target for renewable energies across the 28 EU member states that “will not be translated into nationally binding targets”.
“The continuation of the sub-target for the transport sector is something that has not been accepted and will not be continued in our proposal at the end of this year,” she told the event, organised by Kaidi, a Finnish firm producing biodiesel from wood-based biomass.
Cap on food-based biofuels
First generation biofuels – those derived from food crops – have been at the centre of an intense controversy regarding their effects on the environment, with scientists warning they contribute to deforestation and food scarcity.
A recent study for the Commission found the indirect land use change of biofuels to be bigger than previously thought, leading environmentalists to warn they are more polluting than fossil fuels, a claim strongly refuted by the industry.
Hoping to end the controversy, EU legislators passed a separate directive last year to reduce the indirect land use change of biofuels.
The new law limits to 7% the use of harmful biofuels which compete with crops grown on agricultural land, while allowing member states to set lower national limits. It also sets an indicative 0.5% target for so-called second generation biofuels, whose contribution would count double towards the 10% renewable energy target for transport.
So end of story? Not quite.
Environmentalists are now worried that the European Commission will continue pushing biofuels in the form of an “incorporation obligation” requiring minimum amounts of ethanol to be blended in automotive and aviation fuels.
The idea was first floated in November when the executive launched a public consultation to revise the renewable energy directive (see p.22 of the consultation document).
“The subtle shift is to tell the fuel suppliers what to do instead of telling the member states what to do,” says Jos Dings, Executive Director of Transport & Environment, an environmental campaign group. “If a blending mandate is off the table, we would be very happy about it.”
CEN, an EU standardisation body, currently allows for up to 10% ethanol to be blended into gasoline, a standard called E10 which created defiance among consumers in Germany when it was first rolled out five years ago.
With the 10% target for transport gone after 2020, biofuel makers are hoping a mandatory standard can be introduced to have a minimum blending of biofuels into petrol or gasoline.
“An important element is the blending mandate, setting clear percentage of biofuels,” said Pekka Koponen, Managing Director of Kaidi Finland, the Finnish energy company that was supporting the Parliament event.
Koponen stressed the importance of setting a blending target for the biofuels industry, saying it would be more efficient than any other tax incentive or direct subsidy. “Now for the EU 2030 target, please continue setting the target and make it aggressive enough,” he said at the event.
7% cap in question
Donnelly said “a key element” of the new regulatory framework for renewables post-2020 will be to decide what happens with the 7% cap on biofuels that can be counted towards the 10% target for renewable energy in transport.
“Clearly this is an important question,” she said insisting that the biofuels sector needed regulatory stability after 2020 when the 10% target expires.
“It is important, I believe, that the legislative framework delivers a clear message that gives clarity to that sector,” she stressed.
Donnelly refused to be drawn on how this could be achieved however, saying it will be “a political decision” by the 28-strong College of Commissioners.
“For the moment we are in dialogue. We will continue with our modelling regarding the costs and implications” of dropping the 10% target, she explained, mentioning that the analysis will look into wider impacts on the economy, including imports of biofuels and jobs in Europe.
Jos Dings, from Transport & Environment, said he was worried that the minimum blending standard would become obligatory.
“Interesting,” said Donnelly when asked by Dings about plans for an “incorporation obligation” on automotive fuels. “Actually, I should take note.”
Angel Alberdi, the secretary-general of the European Waste-to-Advanced Biofuels Association (EWABA), said, "The absence of a transport sub-target for 2030 is regrettable, but it has been clear since heads of state and government agreed on a climate and energy policy framework in October 2014. On the positive side, the Commission has been consistently sending clear signals of its intention to promote certain alternative fuels after 2020, in particular those with greater levels of sustainability and a better carbon footprint. In this context we believe that enacting ambitious volumetric targets for the incorporation of sustainable advanced biofuels with high greenhouse gas savings produced from wastes, such as used cooking oil, is a very good option for the EU to achieve its ambitious decarbonisation objectives."
Sustainable 2nd generation biofuels are considered an important element in efforts to decarbonise the transport sector.
The international aviation industry is committed to achieving "carbon-neutral growth" by 2020, but that can only happen with a substantial increase in biofuels use in air transport. The International Air Transport Association (IATA) has set a target of ramping up biofuels use to 10% of all consumption by 2017, saying that they have the potential to reduce the industry's footprint by up to 80%.
Truck makers also see a potential for biofuels in heavy-duty vehicles, where electrification is still a relatively distant prospect. “We already have around 7% biodiesel, but in the future, we will have more Hydro-Treated Vegetable Oil, or HVO. Then we also see natural gas in the form of methane or biogas. And in the longer term, we see Dimethyl ether (DME) as a promising fuel,” said Niklas Gustafsson, Chief Sustainability Officer at the Volvo Group.
The market size for biodiesel in the EU was 10 million metric tons per year in 2012. This is likely to increase to approximately 21 million metric tons by 2020, according to Kaidi Finland, a company making 2nd generation biodiesel from wood-based biomass.