Decarbonising transport: This is the time to get it right*

Géraldine Kutas — posted 09/01/2018

The European Parliament will soon vote on the recast of the renewables directive (RED II), one of the key elements of the clean energy package. RED II is critical in ensuring that we harness the potential of renewable energy effectively, and in decarbonising the economy while keeping energy affordable.

Transport accounts for about 25 per cent of total EU greenhouse gas (GHG) emissions. According to the European Environment Agency (EEA), transport, together with refrigeration and air-conditioning, are the only sectors whose emissions have increased over the last 25 years. Therefore, RED II must set the course for a much faster decarbonisation of transport to have a realistic chance of reaching the EU’s climate targets.

One of the most effective solutions available today to decrease carbon emissions in transport is the use of sustainable biofuels. In Brazil, the use of bioethanol in flex-fuel vehicles has led to a decrease of 370 million tonnes in carbon emissions in just 13 years – the equivalent of carbon absorption of 2.5 billion trees over 20 years. In fact, Paolo Frankl, the Head of the Renewables Division of the International Energy Agency (IEA), agrees that we need biofuels to decarbonise transport.

Therefore, MEPs will soon vote on several important provisions that could determine whether biofuels can make the needed contribution to the decarbonisation of transport.

First, a renewables target in transport – decarbonising transport is a critical challenge, therefore a mandatory renewables target in this sector is needed.

Compared with the Commission proposal, the fact that member states and the European Parliament have included such a target demonstrates progress. While a 20 per cent target would be best and in support of the overall decarbonisation objectives, 15 per cent appears to be a realistic compromise (especially since the Council agreed on a 14 per cent target and the European Parliament only on 12 per cent).

Second, continuing the current cap on crop-based biofuels: To ensure a sustainable future for biofuels, it will be vital to maintain the seven per cent cap on conventional biofuels, of which some have high GHG savings and a low indirect land use change (ILUC) factor.

The seven per cent cap was agreed two years ago after very lengthy and detailed discussions. Reducing this cap would not only diminish the sector in Europe but also any prospect of producing advanced biofuels, which are often dependent on the same companies and feedstocks. In addition, for investors, it would be another sure signal that Europe is not a reliable destination for investments.

Third, maintaining feedstocks for advanced biofuels (annex IX): The feedstocks for advanced biofuels were agreed and based on scientific assessments and after lengthy discussions in 2015. Therefore, this annex should not be reviewed and amended.

Lastly, inclusion of ILUC into GHG emission calculation: ILUC can only be calculated through economic models (it cannot be observed) and the calculations are extremely sensitive to underlying (and often differing) assumptions. Therefore, results vary considerably. In fact, this has been acknowledged by the authors of the GLOBIOM study as well as by a recent literature review for the European Commission.

Consequently, given that ILUC is an evolving science, if we are going to include ILUC factors, EU legislation must be able to deal with changes, new findings and an inherent uncertainty, in a fully transparent way.

In order to deal with ILUC, new EU rules must include periodic updates of the underlying numbers, clearly describe the methodology (type of model, hypothesis and data source) and submit it to public consultation.

It must also be made public who will be in charge of reviewing these numbers. ILUC estimates have far-reaching consequences on the whole sector. Therefore, it should be fully in line with EU regulatory standards and not be an arbitrary and opaque process that adds to the already existing uncertainty.

At COP23, there was a strong consensus that we need every sustainable solution available if we want to have a realistic chance of reaching our climate targets. The European Parliament needs to make sure that we harness solutions that can tackle climate change in the short-term. Sustainable bioenergy, particularly sugarcane ethanol, is one of those options.

I am counting on MEPs to make the right choice.

* Article originally published on The Parliament Magazine website http://bit.ly/2AJBiu4

The end of a busy year – a time for pause

Géraldine Kutas — posted 20/12/2017

As we come to the close of a busy year, it’s worthwhile to take time to pause and reflect on everything that we’ve achieved this year.

For UNICA it has indeed been an interesting and eventful year, full of activity on two key dossiers that are of critical importance to the Brazilian sugarcane industry: the proposals for the next edition of the Renewable Energy Directive (REDII), and of course, the EU-Mercosur trade negotiations.

While there was a certain amount of disappointment among those who had hoped that an EU-Mercosur trade deal could be concluded by the end of the year, it has been pretty clear for weeks that achieving a deal before Christmas was going to be the exceptional rather than the expected outcome. Negotiators going into the round were aware that further significant concessions were required from both sides: Mercosur offers on dairy products, cars and machinery for the EU, and better offers on beef, ethanol and sugar from the EU for Mercosur.

Rather than focusing on what has not been achieved – a deal by the end of the year – we need to reflect on the massive progress that has been accomplished by all sides during the course of the past year. Let’s not forget that these negotiations began almost two decades ago. And it is far better to wait to arrive at an equitable deal with which both sides are happy than to rush into an agreement that satisfies no-one.

So in that spirit, perhaps the timing could not be better. Both sides should welcome the break that the end-of-year festivities offer to take pause and reflect, and come back to the negotiating refreshed, revived, and ready to secure the deal that will benefit the almost 800m citizens in both blocs.

We have also achieved much regarding the proposed REDII texts. This was something of a rollercoaster ride, from the Commission’s initial proposal to more than halve the cap on conventional biofuels, to the ENVI committee’s proposal to cut them altogether. At each stage of the process we engaged constructively and robustly with all relevant stakeholders to correct false claims, provide accurate information and defend the critical role of first-generation biofuels in contributing to renewable energy targets. A draft general approach on REDII adopted by the Perm Reps proposes keeping the cap of 7% for first generation biofuels, and we are vindicated that the Council has accepted that proposal in its discussions on Monday 18 December.

We want to end the year on an optimistic note, and look forward the finalisation of a great EU-Mercosur deal and a fair REDII directive by the spring. In the meanwhile, it remains for me to wish you all a restful, reflective, and very happy festive period and a peaceful and prosperous 2018.

Brazil to Launch Ambitious Biofuels Program

Leticia Phillips — posted 04/12/2017

Building, in part, on the successes and lessons learned from two signature American policies, Brazil is poised to launch a government program that will support the continued development and use of low-carbon, clean biofuels. This new initiative, dubbed RenovaBio, will play a key role in meeting Brazil’s ambitious commitments made at the Paris climate summit in December 2015.

Brazil pledged to reduce its greenhouse gas (GHG) emissions by 43 percent of 2005 levels by 2030. Achieving that goal will require biofuels to supply approximately 18 percent of the country’s energy mix by 2030 through greater sugar cane ethanol production, expanded second-generation biofuels and additional biodiesel for transportation.

Ethanol and bioenergy produced from sugar cane already constitute 15.7 percent of Brazil’s energy mix, replacing more than 40 percent of gasoline demand and avoiding 600 million tons of carbon dioxide emissions since the beginning of the ethanol program in the 1970s. Growing to 18 percent in a developing country is a reasonable target, but the right incentives and policies will be necessary to support this progress. That’s where RenovaBio comes in.

HOW IT WILL WORK
Brazilian drivers today consume ethanol in two ways. First, all gasoline sold in Brazil is required to contain 27 percent ethanol. Second, most Brazilians drive flex-fuel vehicles allowing ethanol to compete directly with gasoline on price at the pump. But Brazilian consumers have enjoyed subsidized gasoline prices for many years, which weakens demand for ethanol. RenovaBio will alter this dynamic and encourage fuel distributors to boost sales of ethanol versus gasoline by requiring them to lend a hand meeting GHG reduction goals.

The Brazilian biofuel program is expected to incorporate two elements that will be familiar to American policymakers and industry representatives.

Similar to California’s Low Carbon Fuel Standard, RenovaBio will assign a carbon intensity rating to the specific biofuel produced at each mill. This system will reward producers who invest in manufacturing biofuels as cleanly and efficiently as possible.

Fuel distributors will then be encouraged to buy more of this clean biofuel through a credit trading program that works much like renewable identification numbers (RINs) under the federal Renewable Fuel Standard. With RenovaBio, distributors will be required to purchase Emissions Reductions Certificates (or CBIOs in Portuguese). Mills that produce fuels with low carbon intensity rankings will receive a larger allotment of CBIOs than mills producing fuels with higher carbon intensity.

Just as the U.S. EPA is required to publish renewable volume obligations annually, Brazil’s National Economic Policy Council (CNPE) will adjust the number of available CBIOs and distributor purchasing requirements each year. Fuel producers and distributors will then be allowed to buy and sell CBIOs on the open market, introducing a new price signal that places a value on low carbon emissions.

RenovaBio enjoys support not only from biofuel producers but also Brazil’s automotive sector. Earlier this year, UNICA and our country’s national association of automobile manufacturers, Anfavea, signed a joint memorandum aligning each industry’s strategies for delivering efficient transportation that meets Brazil’s commitments under the Paris climate agreement.

WHAT’S NEXT
Informed observers expect action soon—either by Brazil’s congress or an announcement by Brazilian President Michel Temer issuing what is essentially an executive order to implement the program—that will clarify many key details. What is clear already, however, is that RenovaBio will be another evolution in smart biofuels policy that deserves emulation by other countries.

Last year in this space, I argued that successfully meeting Brazil’s climate commitments will depend on three fundamental pillars: predictable policy, sustainable production and technological innovation. With RenovaBio, Brazil’s government will take a major step forward on the first pillar. Meanwhile, biofuel producers remain laser focused on the second and the third. Working together, we can make a cleaner, lower-carbon future possible for our children and grandchildren.

NOTE: This article originally appeared in the December issue of Ethanol Producer Magazine.

ITRE vote on RED II – taking on the Bonn spirit

Géraldine Kutas — posted 24/11/2017

Next Tuesday the EU Parliament’s ITRE committee (Industry, Research and Energy) will vote on the Commission’s RED II proposal. This directive will provide the framework for renewables support in the EU and will be a critical element to ensure that the EU can fulfil its climate target and do its fair share to keep global warming below 2⁰C.

The committee’s vote is a crucial step towards the adoption of the text in the European Parliament. It is therefore important to get it right before the text goes to the whole house for approval on 13 December. This is not an easy task in view of the complexities and sometimes unintended consequences of renewables support schemes.

While attending COP23 in Bonn it became blatantly clear to me that climate change demands urgent action in transportation. Simply waiting for full-scale electrification in transport – still decades upon decades away – is simply not an option. So far the transport sector in Europe has contributed far too little to getting carbon emissions down.

An ambitious renewables target for transport is one measure that would help move the decarbonisation of Europe forward. The 12% renewables target for the transport sector proposed by Rapporteur José Blanco López is a step into the right direction, in particular compared with the Commission’s approach that wanted no transport-specific target at all. But I think we should be even more ambitious: 15% should be the minimum target, but 20% represents a level that would provide for a meaningful and adequate reduction of CO2 emissions.

In Bonn it also dawned on policy makers and climate advocates alike that we need every sustainable solution available if we want to have a realistic chance of reaching our climate targets. There is no single silver bullet that can tackle the issue alone. Electrification is certainly critical to achieve the climate goals in the long term but cannot achieve the necessary emission savings in the short/medium term. One of the options we need to harness now is sustainable bioenergy and biofuels. In Brazil, sugarcane ethanol, a sustainable biofuel with 90% CO2 savings compared to petrol, has directly cut transport CO2–equivalent emissions by 370m tonnes in just 13 years. In contrast in the EU greenhouse gas emissions in transport are still rising.

Next Tuesday the ITRE Committee should make sure that the EU can use all sustainable solutions to fight climate change that are at our disposal. We can’t wait for the perfect solution. We need all available solutions NOW.

COP 23 – We are here!

Géraldine Kutas — posted 12/11/2017

– Visit UNICA’s booth at COP23 in Bonn, Germany
– Attend our discussion on how biofuels can fight climate change and promote sustainable development at the Brazilian Pavilion on 15 November at 14:00 CET with speakers from ApexBrasil, SE4ALL / Below 50, the World Bank, and UNICA.

Last year was the warmest year recorded to date, and 2017 is on course to become the second or third warmest year, according to the World Meteorological Organisation. There were many weather-related natural disasters in 2017: the Atlantic hurricane season was one of the most active on record, major monsoon floods caused hundreds of deaths in the Indian subcontinent, and even the Republic of Ireland experienced some of the most extreme weather the island has seen in decades. Fundamentally, climate change threatens crops, wildlife and freshwater supplies. At the opening ceremony of the UN Climate Change Conference (COP23) in Bonn, Germany, the host country Fiji’s Prime Minister Frank Bainimarama said, “The need for urgency is obvious. Our world is in distress from extreme weather events caused by climate change.”

The progress achieved at COP21 in Paris was significant, but agreements alone are not enough. We need action. While most of the United Nations countries have already ratified the agreement, the momentum needs to be sustained, and ambitious policies need to be implemented in order to curb GHG emissions and limit global temperature rise to less than 2 degrees Celsius above pre-industrial levels. It is now time for countries to think about their renewed pledges in time for the COP24 meeting next year where participants will take stock of national progress toward achieving climate goals.

EU’s 2030 target of cutting emissions by 40% is “very robust”, according to the European Commission’s climate negotiator Elina Bardram. However, EU’s progress against that target will depend on implementing the policies that will help achieve different sub-targets, such as those in the transport sector.

Transport accounts for a quarter of all EU GHG emissions in the EU, 70% of which come specifically from road transport. To address this sector, the Commission recently published the second batch of legislative proposals in its Mobility Package “Europe on the Move”, including the post 2020 CO2 standards with the target of 30% fewer CO2 emissions from new passenger cars by 2030.

The 30% CO2 reduction is certainly a much needed step towards decarbonizing the sector, but will this be enough to meet the Commission’s unofficial transport sub-target of a 60% CO2 reduction by 2050? The Renewables Energy Directive (REDII) provides an opportunity to complement the Mobility Package – which decarbonizes the vehicle technology – by decarbonizing transport fuel. This sector must be addressed holistically in order to reach the 2050 scenario and fuels are an inextricable part of the solution.

Unfortunately, not only has the 10% transport target in the first RED been removed, but REDII specifically proposes to reduce conventional biofuels from the current 7% cap to 3.8%. Instead of cutting conventional biofuels the EU should allow for cleaner more sustainable fuels that are readily available and can make a different in the short and mid-term decarbonization efforts. Brazilian sugarcane ethanol can and should play a bigger role in the EU as it reduces GHG emissions by 70% compared to fossil fuels, and has a low ILUC impact as assessed by the Commission itself.

This is already happening on a global scale. In Brazil, the use of bioethanol in flex-fuel vehicles has led to a decrease of 370m tonnes in carbon emissions in just 13 years – the equivalent of carbon absorption of 2.5 billion trees over 20 years.

It is important to look at the transportation sector in a comprehensive manner and deploy all available solutions now, while in parallel investing in future fuels and technologies if we are to meet the overall Paris Agreement targets. Fuels are a critical to the solution, and conventional biofuels in particular have the potential to significantly decarbonize the sector today.

Come visit the UNICA booth in Bonn to learn more about how this is working in practice in Brazil and around the world.

UNICA Booth is located in the Bonn zone, exhibition area, 1st floor in front of the coffee bar.

On 15 November at 14:00 CET the Brazilian Pavilion will host a panel discussion entitled “Biofuels: fighting climate change and beyond”.

– Ambassador Roberto Jaguaribe, the president of the Brazilian Trade and Investment Promotion Agency (Apex-Brasil), will tell us more about how Brazil can cooperate with other countries to help them in their transition sustainable biofuels.

– Gerard Ostheimer, Global Lead for the SE4ALL Sustainable Bioenergy High Impact Opportunity / Below 50, will address the deployment of biofuels as a cleaner and affordable fuel, especially in developing countries.

– Celine Ramstein, Climate Change Specialist at the World Bank will explain how carbon-price mechanisms can stimulate the use of biofuels, creating a higher income for renewable energy producers.

– Géraldine Kutas from UNICA will provide concrete examples of the contribution of Brazilian sugarcane ethanol to climate change mitigation and of social inclusion, revealing data on IDH, income and education rate in municipalities where sugarcane is produced.