Ecofys puts biofuels back on track!

Géraldine Kutas — posted 13/11/2014

A Ecofys study published yesterday – on behalf of the European Oilseed Alliance (EOA), the European Biodiesel Board (EBB) and the European Vegetable Oil and Protein meal Industry (FEDIOL) – gives new life to biofuels and certainly brings new elements to the debate on ILUC, currently at a standstill. After months of speculation and criticism on the little emission reductions actually provided by biofuels when ILUC is factored in, this study re-energises pro-biofuels arguments. It argues that the European Commission based its conclusions – hence its legislative proposal to amend the RED and FQD – on wrong assumptions and underestimated the benefits of biofuels by as much as 50%. Check this EurActiv articles that provides a useful summary.

In fact, benefits of biofuels should be calculated by comparing the carbon footprint of the fossil fuels they would replace in the market. Ecofys found that in the absence of biofuels, fossil fuels used in the market would not be traditional fuels, as considered by the Commission, but marginal fuels which are mainly unconventional fuels such as oil sands, tar sands and oil shale. The starting assumption of the Commission would therefore considerably underestimate the GHG reduction impact of biofuels. The fossil comparator used by the commission is 83.8 gCO2eq while the study estimates that the marginal GHG emissions reduced by the use of biofuels would amount at 115 gCO2eq.

Without entering into too many details such as estimated carbon intensity and average blend comparator, the key point of this study is that unconventional fuels have a higher carbon footprint compared to traditional fuels and they cover – and are likely to cover even more in the future – a growing share of the market. Calculation of GHG savings for biofuels should therefore be based on this assumption.

As I always argued in my previous blogs, biofuels are one of the few realistically viable ways to decarbonize transport and it is reassuring to see that this study re-legitimises them in their original role. The intense debate on biofuels which took place in recent years resulted in a lack of a clear legislative framework and uncertainties for the future of both the Fuel Quality and the Renewable Energy Directives. On top of all this, the implementation of the FQD is still unfinished, with MEPs currently trying to reject the implementing measure on Article 7a. Needless to say that the biofuels sector will benefit greatly from the extension of the FQD post-2020 and even more if the fossil comparator is adapted to take into account the carbon footprint of non-conventional fuels as recommended by this Ecofys study and by the MEPs advocating for the rejection of the current text of Article 7a, something that has not been done yet for, presumably, political reasons. As the study itself says: “Proper implementation of Article 7a of the Fuel Quality Directive could provide a strong incentive to avoid the fuels with the worst greenhouse gas performance and thereby reduce the average emission factor of EU transportation fuels […]while at the same time driving improvements in the greenhouse gas performance of biofuels”.

Let’s hope that the Commission will take into account these new findings as well as the call by EU leaders to examine instruments for “renewable energy sources in transport” post 2020.

More on transport and biofuels at our event “Think Energy. Think Brazil. Perspectives on the 2030 Energy and Climate Package” on 19 November!

European leaders give hopes on transport post-2020

Géraldine Kutas — posted 06/11/2014

On 24 October European leaders reached an agreement on the framework which will set the energy and climate scene for the next 15 years. The deal embraces several elements which will form the basis of the legislative proposals to be developed by the European Commission.

I complained in the past already about the lack of ambition of the 2030 Climate and Energy Package in terms of transport-specific targets and I keep on arguing that, if Europe does really want to meet its climate targets, transport should remain high on the agenda.

The conclusions call on the Commission to examine instruments for “renewable energy sources in transport” post 2020 in a comprehensive and technologically neutral way, which could possibly involve an extension of the Fuel Quality Directive (FQD) after 2020.

The biofuels industry needs certainty after 2020 and an extension of the FQD could provide it. UNICA encourages the European Commission to start discussions on this as soon as possible. My hopes are quite low, especially after I heard that some MEPs in the ENVI Committee, using their power of scrutiny under  comitology, tabled objections to the new implementing measure proposed by the Commission on Article 7a of the FQD. Should the objection go through, we could expect additional delays for the implementation of the existing Directive. This would postpone any meaningful decision on fuel quality after 2020.

If you want to hear more on the transport framework post-2020 and on how Brazilian Sugarcane can contribute, join us on 19 November in Brussels for a discussion on “Think Energy. Think Brazil. Perspectives on the 2030 Energy and Climate Package”. Our experts will exchange views with policymakers and E4TECH will present a new study on GHG emissions from road transport by 2030.

Look forward to seeing you at the Residence Palace on 19 November!

Biofuels, the missing link

Géraldine Kutas — posted 23/10/2014

After two intense weeks of confirmation hearings in the Parliament, highly political discussions in Brussels, Strasbourg and EU capitals and after a mini re-shuffle of portfolios, the Junker Commission has been confirmed by the Parliament.

It was described by Mr Juncker himself as the “last-chance Commission”.

I can only agree with him. To regain trust, the EU needs to demonstrate its commitment to ‘Better Regulation’, as well as consistency and ambition in the policy proposed.

When it comes to climate and energy policy however, Mr Juncker’s team failed to go down that ambitious route by omitting an important contributor to future emission reductions in transport: biofuels.

I can only express concerns and regrets about this oversight.

At the hearings, discussions largely focused on the 2030 Climate and Energy targets and the ETS reform, but there was no meaningful debate over the role that transport can and should play in meeting these overall emission reduction targets. Remember that transport represents as much as 30% of EU greenhouse gas emissions!

We now have no fewer than three relevant Commissioners for biofuels: Maroš Šefčovič (Vice-President for Energy Union), Miguel Arias Cañete (Energy and Climate Commissioner) and Violeta Bulc (Transport Commissioner). However, none of them stressed the role of biofuels in helping the EU deliver on its 2030 climate and energy agenda.

Comments on the absence of transport-specific targets in the 2030 Climate and Energy package were voiced a few times by MEPs but received no concrete answers from Commissioners-designate.

Mr Šefčovič, who becomes Vice-President for the Energy Union, underlined his reluctance towards first generation biofuels, due to concerns around their GHG emission reduction performance and on their impact on food prices.  On the other hand he supported second-generation biofuels and stressed the need to quickly reach a compromise on the ILUC proposal. As said before, biofuels urgently need regulatory certainty. But it doesn’t mean that policymakers should hastily close a deal. The second reading should provide opportunities for a more nuanced approach.

As for Mr Cañete, our new Energy and Climate Commissioner, he did not even mention biofuels during his hearing and carefully avoided questions on a new target for renewable energy in transport post-2020.

Ms Bulc, the new Transport Commissioner, did quickly stress her commitment to introduce a fair share of alternative fuels and renewables in the transport sector, without further details on how she would make this possible.

As the second reading of the ILUC file is soon to start in the Parliament and the Council, it is critical for the Commission to play a strong role in driving the dossier to a satisfactory close.

In the Parliament, the rapporteur Nils Torvalds wants discussions to resume quickly. But the Council is now only scheduled to communicate its common position in January, which means the second reading examination will be delayed in the Parliament.

In the Council, strong divergences amongst Member States led to a rather weak agreement. The Italian Presidency gave low priority to the issue and the dossier will likely be handed over to Latvia in January.

Once again, I ask policymakers to give a new impulse to the policy debate on biofuels and work together for a solution which takes into account the role of transport in reducing emissions and the environmental contribution of biofuels such as sugarcane ethanol. A more comprehensive analysis on the unbalance between diesel and gasoline in Europe is needed and low-ILUC biofuels should be incentivized in a decisive way. Disruptive measures affecting first generation biofuels will only harm the entire biofuels sector, making it difficult to invest in advanced biofuel technologies.

I hope this argument will be raised at the European Council this week and form part of discussions on the 2030 framework for climate and energy.

A policy framework for biofuels post-2020 is needed, or we will lose a major instrument to reduce emissions in transport. It is the missing link of the new Commission’s agenda.

Biofuels: The Clock is Ticking

Géraldine Kutas — posted 08/09/2014

After an intense summer break, which saw Brussels far from quiet but rather busy speculating about the nominations to top EU posts, business has resumed in the institutions.

In the Parliament, the Environment committee has already met to vote on the questionnaire to be addressed to the Commissioner-Designates for Environment and Climate in upcoming hearings. The committee will soon reopen discussions on the ILUC proposal in second reading, under the leadership of the new rapporteur, Nils Torvalds, and newly designated shadow rapporteurs such as Christopher Fjellner for the EPP. As I mentioned already in previous posts, in second reading only the leading committee is involved in developing the Parliament position and the associated Committee (ITRE) is only entitled to propose amendments ahead of the plenary vote.

Member States, which agreed on a Council position on 13 June, have not yet transmitted their common position to the Parliament. We hear that this will only happen in November. All this tells me that Member States are not particularly eager to resume what they see as a controversial debate.  With such a sluggish approach, the file is unlikely to see a conclusion before mid-2015.

Once more: delay, delay, delay! Despite the ticking clock in the background, EU policymakers fail to realise the urgency of the situation.

A report published at the end of August highlights the consequences of these inconsistent and delayed policies – in the EU and elsewhere. In its 2014 medium-term forecast on Renewable Energy, the IEA notes that “biofuels for transport face a slower growth and persistent policy challenges”. The lack of clarity in how the EU aims to address the sustainability of biofuels and the difficulty in foreseeing a rapid epilogue to the ILUC proposal have a clear detrimental impact on the biofuels industry, which is in no condition to plan long-term investments.

Even the Commission, which initially put forward the legislative proposal to fix the ILUC issue, now seems to be turning its back to the whole debate. It appears that the line of the new Transport Commissioner for the next five years will be to focus more on alternative fuels (EVs, LNG, CNG, etc) than on biofuels, given the legislative uncertainty on ILUC.

Bottom line, the climate around biofuels seems even more complicated than before the summer. Policy makers are taking time and industry is struggling. The EU should decide a line of action and implement it if it wants the biofuels industry to be able to help in the decarbonisation of transport and in the development of advanced biofuels. A more balanced approach is necessary to allow good biofuels (whether conventional or advanced) to contribute to the fuel mix and align Europe with other countries where gasoline is preferred to diesel and higher blends of ethanol are in use.

Until a more balanced approach is adopted, the clock will continue to tick – worryingly so

Let the second reading start!

Géraldine Kutas — posted 15/07/2014

After a short break occasioned by the European elections in May, it will soon be time for new and returning Members of the European Parliament to embark on second reading discussions on ILUC. Member States adopted their common position on 13 June and, as soon the text is presented to MEPs in Plenary, the second reading phase will start. In this important new step of the process, UNICA would like to send a few words to the members of the recently formed Environment Committee, who will have a special role to play on the dossier in the second half of the year.

Dear Members of the Environment Committee,

As you are aware (or soon will be), the ILUC proposal, described by the Commission as a tool “to limit global land conversion for biofuel production, and raise the climate benefits of biofuels”, has been subject to discussions for already 18 months. The proposal has triggered heated debates and to date the positions of the three institutions still diverge. After a first reading position was adopted in the Parliament last September, Member States’ Energy Ministers reached a common position on 13 June, driven by the Hellenic Presidency. Where have discussions led to? Member States proposed a cap on conventional biofuels at 7% and a non-mandatory sub target for advanced biofuels at 0.5%, while the Parliament favoured a 6% cap on conventional biofuels and a 2.5% sub-target for advanced biofuels in 2020.

As if the gap between Parliament and Council was not clear enough, a group of 8 countries (Czech Republic, Estonia, France, Spain, Hungary, Poland, Romania and Slovakia) sent a declaration to the Greek Presidency right before the June Council meeting stressing that the 7% cap was an absolute red line and that any tripartite agreement on a lower cap would not be acceptable.

We were glad to see Member States realise how important it is to provide certainty for investments by keeping a cap at least at 7%. However, we still think the cap is not the best way to tackle the ILUC issue and that a more balanced and nuanced approach is to be found. The Council’s common position will now be subject to your amendments and eventually to tripartite negotiations. You probably remember how tight the vote was last year – the position could only be adopted in plenary by a slim margin of 29 votes, with a majority composed by ALDE, S&D, Greens and GUE/NGL. In this Parliament more than half of members are newly elected and a new majority will need to be formed to reach an agreement in second reading. UNICA counts on the new rapporteur, still to be appointed, to bring negotiations to a close as quickly as possible, in cooperation with the Italian Presidency. If the EU is serious about reducing transport emissions, agreement must be found shortly to provide sustainable biofuels with the certainty they need on EU markets.

From our side, we will use this occasion to reiterate once more that a biofuels policy based on a cap on all conventional biofuels doesn’t provide the necessary instruments to really identify and encourage biofuels that are performing better in terms of CO₂ emission reductions. With its black and white approach, the Council’s common position does not acknowledge the sound environmental performance and sustainability of certain conventional biofuels, like Brazilian sugarcane ethanol, and fails to promote their use even when they have superior environmental credentials when all emissions and environmental factors are taken into account.

Of note, a dedicated 7.5% sub-target for renewable energy in European petrol, as adopted by the previous Parliament in September 2013, is essential because it will help the EU to reach more cost-effectively its GHG emission savings target and in a more environmentally responsible manner.

We also strongly support the development of new and innovative biofuels technologies and we suggest a better incentive system than double-counting and a modest 0.5% sub-target.  For stimulating the production and consumption of advanced biofuels, we will advocate for a sub-target for advanced biofuels of at least 2% by 2020.

We hope that the result of upcoming negotiations will bring us to a more nuanced outcome for biofuels policy and we hope that MEPs will bring to the debate on the 2030 framework the important topic of a specific target for renewables in transport post-2020, as we believe it would trigger innovation in the advanced biofuels sector.

Yours sincerely,

Géraldine Kutas

Head of International Affairs, UNICA