Countdown starts for the biofuels’ verdict in the EU

Géraldine Kutas — posted 10/12/2013

Ahead of the adoption of the Political Agreement on the ILUC dossier in the Energy Council on 12 December 2013, a group of NGOs put out a briefing on the biofuels policy review and on the three main issues in the debate: the cap for land-based biofuels, the weakening of the 20% RED target and the inclusion of ILUC factors for accounting purposes.

The briefing claims that “ILUC is a real and tangible problem affecting the sustainability of biofuels” and that “most land-based biofuels currently marketed in Europe offer no or limited carbon emissions savings compared to petrol and diesel”.  On this basis, the NGOs criticise the suggestions of the Lithuanian Presidency and proposes 1) to have a cap for first generation biofuels at current consumption levels (or lower) also applied to the Fuel Quality Directive, 2) to make sure that biofuels produced from waste and residues are actually sustainable and 3) to include ILUC factors for accounting purposes in both the RED and FQD.

A cap such as the one proposed by the Commission and defended by the NGOs is just a clumsy attempt to find a quick remedy to issues that remained unsolved in 2009, bringing no evident benefit in the long term. In fact, such a black and white approach would not take into account the good performances of well-performing conventional biofuels such as sugarcane ethanol. It would actually cut them off the European market and – even worse – it would not take into consideration the bad performances of some advanced biofuels. Within another 5 years the EU might risk finding itself in the exact same situation as today.

Granted, not all the biofuels considered as advanced are actually sustainable. However, NGOs should have applied the same logic the other way around to conventional biofuels. Sugarcane ethanol achieves among the highest greenhouse gas (GHG) emission savings (over 70% relative to fossil fuel alternatives, according to the default values in the EU Renewable Energy Directive, and more than 55% when estimated ILUC emissions are accounted for) of all biofuels produced at scale because of its relatively low indirect impacts and the resource efficiency of its production. Let’s not forget that Brazilian sugarcane ethanol is considered an advanced biofuels in the U.S., and especially in California. Nevertheless, there would be no market for it in Europe if the cap ever enters into force.

While the argument for the introduction of ILUC factors in both the RED and FQD could actually be understood and would take into account important differences between biofuels’ environmental performance, having a strict cap wouldn’t match with it and would penalize, in any case, well-performing conventional biofuels.

Is it not perhaps the time to keep calm and work on a more nuanced and consistent approach to biofuels, without putting any extra burdens on the industries? These, after all, have already invested on biofuels and – this needs to be reminded from time to time – might not be able to invest more in advanced biofuels as a result of the implementation of the current proposal and the absence of a regulatory framework for the medium-long term.

A more structured and effective action to resolve the imbalance between diesel and gasoline in Europe would support the EU climate change policy objectives, and incentives to introduce higher blends of bioethanol in vehicles would help moving away from the most polluting biofuels. Sugarcane ethanol is definitely a good candidate for this purpose and could help the EU reach its objective of decarbonizing the transport sector.

Sustainable Biofuels Are Still the One to Help Decarbonizing EU Transport

Géraldine Kutas — posted 29/11/2013

A couple of new reports released this month in Brussels carry a similar message: Sustainable biofuels, like sugarcane-based ethanol from Brazil, will need to play a significant role if the decarbonization of European transport is going to happen longer term.

There’s also another important message in the two studies, one by E4Tech and the other by CE Delft/TNO:  the EU still has an opportunity — especially with a new Commission and new European Parliament taking over in 2014 — to cultivate the right policy environment in order to move industry toward producing more advanced biofuels and enabling higher blending rates of sustainably produced biofuels for gasoline and diesel.

“Currently there is no 2030 policy environment for biofuels. There is also an urgent need for specifications for new biofuel blends for policy to promote high quality advanced biofuels and compatible vehicles, and a framework that addresses biofuel sustainability issues,” says E4Tech, a consultancy, which released its findings on Tuesday. E4Tech’s report was commissioned by a consortium of Daimler, Honda, Neste Oil, OMV, Shell and Volkswagen.

Through the E4Tech study, that group of automakers and fuel producers is pushing an Auto-Fuel Roadmap that recommends a series of achievable steps, based on evidence, that can be put into place in the coming years by policymakers and industry alike.

In particular, the E4Tech study lays out a timeline for a series of key actions, including an EU policy and fuel standards’ aim for the roll-out of maximum 10% ethanol, or E10, into gasoline by 2020; introducing E20 by 2025; and mandating, via policy, that all new gasoline vehicles are E20 compatible from 2018.

Such goals are already feasible with current technologies and with the direction that budding technologies are taking. The targets are also achievable in parallel with meeting critical sustainability requirements and cutting greenhouse emissions. In Brazil, the introduction of flex-fuel vehicles (FFVs) ten years ago has allowed Brazilians to freely decide which fuel they want to use. FFVs can run on either petrol or pure ethanol, or any blends of the two. That freedom of choice in Brazil also comes with the benefit of benefit of reduced carbon emissions, given the high CO₂ emission reductions (71% according to EU Renewable Energy and Fuel Quality Directives) that sugarcane ethanol achieves versus fossil fuel. And Europeans should have the same freedom of choice and environmental benefits, particularly in light of recent World Health Organization assessments showing that air quality remains a pressing problem in many European cities and countries.

The E4Tech study’s findings are also echoed in another report unveiled earlier this month from CE Delft/TNO, which produced its study at the request of the European Commission. “It is essential for governments and industry to decide within 1 or 2 years on the way ahead and take necessary actions covering both, the fuels and the vehicles, to ensure their effective and timely implementation,” CE Delft/TNO said in its report.

Like the E4Tech study, CE Delft/TNO says higher blending ratios are technically feasible and would move Europe toward greater decarbonization in transport, which remains one of the main sources of global carbon emissions.

To be sure, to realize the projections and recommendations of both reports — like biofuels accounting for 15% of transport fuel in 2030 in Europe versus about 5% today, as E4Tech projects — a lot of things need to happen. Yet it’s an important signal that some key automakers and fuel suppliers are working in parallel to move Europe closer to its climate abatement and energy supply security goals.

But will the EU play its role in providing the proper longer-term policy signals? Let’s hope that the new Commission and Parliament will size this opportunity next year.

EPA Signals Retreat on Greenhouse Gases by Minimizing Contributions from Foreign Producers of Advanced Biofuels

Leticia Phillips — posted 15/11/2013

In response to the Environmental Protection Agency (EPA) unveiling a proposal that could cut next year’s Renewable Fuel Standard (RFS) target for advanced biofuels by 20 percent, Leticia Phillips, the Brazilian Sugarcane Industry Association’s (known by the acronym “UNICA”) North American Representative issued the following statement.

Slashing the 2014 target for advanced biofuels would be a huge step backwards from the Obama administration’s goal of decreasing greenhouse gases and improving energy security. Advanced biofuels, including Brazilian sugarcane ethanol, reduce carbon dioxide emissions by at least 50 percent compared to gasoline, and EPA has traditionally promoted these clean renewable fuels. That is why we are surprised and disappointed that EPA’s proposal minimizes the 650-800 million gallons of sugarcane ethanol Brazil is poised to supply to the United States in 2014.

Since the beginning of the RFS program, EPA has been a strong supporter of the modest but important role Brazilian sugarcane ethanol plays supplying Americans with sustainable fuel, certifying that it cuts carbon dioxide emissions by more than 60 percent and designating it an advanced renewable fuel. This federal proposal also dramatically impacts states like California, which considers Brazilian sugarcane ethanol the low-carbon fuel with the best performance today and the only fuel available at commercial scale to contribute to its low-carbon fuel standard.

Our association looks forward to commenting on this inadequate proposal and will continue to play an active role in the RFS rulemaking process, serving as a source of credible information about the efficiency and sustainability of sugarcane ethanol. Likewise, Brazil will continue to be a strong, dependable partner helping America meet its clean energy goals.

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The Brazilian Sugarcane Industry Association is the leading trade association for the sugarcane industry in Brazil, representing 60 percent of the country’s sugarcane production and processing.  More information on sugarcane ethanol and its role as an advanced biofuel is available at www.sugarcane.org/rfs.

European Parliament Committee Upholds Opposition to Quick Bargain Discussion on Biofuel Dossier

Géraldine Kutas — posted 08/11/2013

As an indication of how the European Union biofuels dossier remains stuck in a holding pattern, the European Parliament’s Energy Committee has canceled a planned vote on whether to give the EU’s Parliament Rapporteur  a mandate to hold negotiations (so-called “Trilogue talks”) with EU Member States and the European Commission to come up with a grand compromise on the dossier.

An Energy committee vote would have been more a formality than anything else because the Parliament’s Environment Committee already voted weeks earlier to reject giving the Rapporteur a mandate to initiate Trilogue discussions. These inter-institution discussions are an important indication in the EU policymaking phase that signals that a conclusive policy text is likely to be around the corner. But this was not the case for the EU biofuels policy.

If there is a good thing though about the protracted biofuels debate in Brussels it is that policymakers can deepen their responsibility to have a more nuanced discussion about biofuels – and move away from the black and white debate that has dominated discussions in this town. This would mean taking more clearly into account ethanol’s environmental benefits, such as high potential greenhouse gas (GHG) emission reduction for example.

Well-performing first generation biofuels, such as Brazilian Sugarcane Ethanol (BSCE), should be incentivized and not categorized as an under-performing biofuel.

BSCE is an advanced biofuel in places like the U.S., in part because it does not contribute to deforestation, as it is grown mostly on degraded pasture land and produced almost entirely in the south-central part of Brazil, far away from the Amazon rainforest; and it achieves among the highest GHG emission savings (over 70% relative to fossil fuel alternatives, according to the default values in the EU Renewable Energy Directive, and more than 55% when estimated ILUC emissions are accounted for) of all biofuels produced at scale.

What next?

EU Member States could still agree to a “Common Position” as they have been deliberating in coming months. But even if that happens, the Parliament will still need to consider and debate the Member State Common Position, and there simply isn’t enough time to do this when the Parliament’s final full session (plenary) is in April, just ahead of European Parliament elections across all 28 Member States in May 22-25.

Thus, the EU biofuel policy debate is unlikely to be resolved until perhaps 2015, six years after the biofuel/ILUC policy discussion commenced in earnest in Brussels.

A History Lesson on the World’s “Most Successful Biofuel Industry”

Leticia Phillips — posted 21/10/2013

The 40-year anniversary of 1973’s OPEC oil embargo is an important milestone in the world’s transition toward renewable sources of fuel. Many media outlets and respected energy leaders have been looking back over the past four decades, searching for lessons learned.  Among the best retrospectives I’ve read is a feature story in E&E News’ ClimateWire – a respected policy-insider publication headquartered here in Washington – that recounts how price spikes and fuel shortages prompted a renewable fuels revolution in Brazil and helped create “the most successful biofuel industry in the world.”

This “Brazilian experience” with renewable energy and sugarcane ethanol reads like a primer on how stable policy and investment in new technologies can fuel a green economy while cutting emissions and dependence on foreign oil. Today, sugarcane ethanol has replaced almost 40% of Brazil’s gasoline demand while cutting nearly 200 million tons of carbon dioxide emissions.

The full ClimateWire article is an excellent read, and a few key excerpts jump off the page to underscore the power of clean and renewable fuels:

Stable government policy was necessary at first – Brazil initially relied on government mandates to start the transition away from gasoline. By mandating ethanol blending in gasoline, requiring installation of pumps dispensing pure ethanol, funding research and development, and encouraging carmakers to build vehicles that could run on ethanol, sugarcane ethanol became a reality virtually overnight.

“By 1977, gasoline-ethanol blends had arrived at the pump. The sugarcane industry invested in new fields. New ethanol mills dotted the landscape. The World Bank and national financial institutions structured a financing system to support the investment.”

Sudden policy changes threatened growth – When Brazil transitioned to a democracy and the price of oil dropped in the 1980s, the national government considered dropping ethanol support, threatening a fast-growing industry even though consumer demand was clear.

“The government could not shut it down in one step because so many people had ethanol cars…there was a lot of tension between fiscal pressure and the number of cars in the street.”

But stable technology investments saved the day – Even though Brazil’s cut funding, automakers maintained investments in new ethanol vehicle technologies. By the time oil prices rose again in the early 2000s, flex-fuel vehicles were ready to meet market demand.

“The decision on which fuel people would use was transferred from the government to consumer…Flex-fuel vehicles rapidly became the best-selling cars in Brazil.”

Brazilian consumers have real options at the pump – The combination of technological investments, environmental and economic benefits, and steady government policy helped create a booming domestic biofuels economy and holds lessons for America’s policymakers.

“’We need to focus on being as smart as the Brazilians,’ R. James Woolsey, former director of the CIA and chairman of the Foundation for Defense of Democracies, said in a discussion on energy security and independence.”

“Because the United States had not widely encouraged the development of flex-fuel vehicles, the country now faces the possibility of a blend wall: too much ethanol and not enough gas tanks to take it…The goal for the United States shouldn’t be to completely displace oil, experts said, but to encourage a greater mix of fuel sources.”

Indeed, as debate over the future of advanced biofuels policy intensifies, it’s important to remember that a stable Renewable Fuels Standard (RFS) has encouraged advanced biofuels use in the U.S. while driving innovations in renewable fuels that boost American economic growth and energy security while cutting emissions.

Brazil will continue to be a strong, dependable partner helping America meet its clean energy goals.  And Brazilian sugarcane producers will continue to play an active role in the RFS rulemaking process serving as a source for credible information and analysis about the efficiency and sustainability of sugarcane ethanol.