Chris Malins: Advanced Alternative Fuels Can Meaningfully Contribute to Decarbonized Transport

11.08.16 | Podcast | By:

Recently, I spoke with Dr. Chris Malins of Cerulogy about the Biofrontiers project (see post Oct. 12, 2016) which focused on advanced alternative fuels. Under the project, the European Climate Foundation and its stakeholder partners put forward policy recommendations to the European Commission on how better to support their development in the EU. Among other findings, the group has called for prioritizing support for them. What follows are a few highlights from the discussion.

On the Biofrontiers project:

“I think the first thing to say is that this is a European-facing project. This is all in the context of the European Union, looking at developing a new climate and energy strategy for the period 2020 to 2030. So, we’re expecting to see the biofuels and alternative fuel policy put in place over the next year or two that will replace the framework which we have at the moment. And in that context working with European Climate Foundation and the International Council on Clean Transportation (ICCT), we wanted to try to bring together some of the major stakeholders around advanced biofuels and build a little bit of consensus about what a really effective policy environment would look like.

 

In particular with Biofrontiers, we have tried to bring together voices from industry and technology developers with environmental think tanks and environmental NGOs because as I’m sure most, if not all, of your listeners are aware, discourse around biofuels has been quite vexed in Europe as in the United States and elsewhere for the last few years. Things like indirect land use change, questions like food versus fuel and issues around sustainability more generally have created a situation where often industry and civil society have been loggerheads rather than in synchrony. So, we were really keen to build on some previous work that we called Wasted, specifically looking at the opportunity for advanced biofuels from waste residues, to bring together as much as we could voices from industry and from civil society to bring forward something to the European institutions that can be agreed on and that we think could be the basis of a strong alternative fuel framework to 2030.”

On the Three Themes That Kept Coming Up Over and Over for Advanced Biofuels in the Project:

“I guess there are sort of three themes that I think do come up over and over and that you really can’t get away from doing this sort of work. In some sense this was the starting point to Biofrontiers because it built on this project we did looking at the potential for developing an advanced biofuel industry from waste and residues. The first observation is that there are genuinely significantly resources out there and it can be sustainably mobilized and used to produce bioenergy either for heat/power or liquid biofuels. I think that is important to state.

 

I personally do not believe that that bioenergy is a sort of a one-stop solution for all the world’s climate problems. And one has to be realistic about the potential size of these industries. I think what we found is that this an industry that can be launched, that can deliver a really meaningful and significant contribution to transport sector decarbonization. But it must stand alongside other initiatives such as vehicle efficiency standards and vehicle electrification. There is a theme in Biofrontiers of complementarity both within bioenergy and the bioeconomy and in the sense of transport sector, decarbonization, so that is the first theme.

 

I think the second theme, and it was part of the work we did with Ecofys and the Jeff Passmore Group out of Canada, was looking specifically at the investment case for advanced biofuels. This is something that you hear people say time and time again and correctly: you need a solid stable policy framework to support investment in this industry for new technology advanced biofuels which show the greatest growth potential.

 

We also have existing sustainable biofuels. Used cooking oil biodiesel is a great example in Europe and we’ve worked with European Waste to Advanced Biofuels Association within this project. You have those technologies which are relatively mature.  But for new technologies, cellulosic ethanol production, pyrolysis, Fischer Tropsch fuels, and various other things, we’re talking about high capital expenditure requirements. You need a policy framework that provides a clear value proposition, that provides certainty moving forward and ideally that is genuinely targeted to support investment. I think there is a difference between the most effective policies to support production and expansion in a mature industry and policies that are most effective at supporting this new development.

 

The third theme that I come back to again and again is sustainability and being serious and effective in dealing with the sustainability of these fuels. It is absolutely crucial, not only from an environmental point of view in terms of giving you effective safeguards, but because if there isn’t an effective sustainability framework, and if civil society doesn’t see that there is an effective sustainability framework, then you can’t have policy certainty. If the environmental community have come to believe that you are doing more harm than good with your advanced alternative fuel policy, then there will be opposition. When you have political opposition, you have political uncertainty, and I think the indirect land use change debate provides an excellent example of that.

 

There is no question there were legitimate issues there, in my opinion at least, that needs to be discussed, but there is also no question that going through that discussion it did introduce uncertainty. It did make it more difficult for people to think about investing. So, the message from Biofrontiers is that if you can deal with the new and the real sustainability issues that go with using some of these new resources and get ahead of the curve rather than sort of waiting for five years and then trying to play catch up, then you can start off with a much more solid footing and give industry and investors a basis to know what the parameters are that they have been asked to work with.”

On the Vicious and Mutually Reinforcing Cycle of Chilling Investor Confidence and Not Meeting Renewable Targets:

“When I was at the ICCT a few years ago, we did a paper looking at this, looking directly at the financial performance of some of the sort of the early adopted second generation biofuel technology. And sadly, the reality is that performance has been very poor. These companies have not been a good investment often in the last 10 years. Investors are aware of this. You can’t pull the wool over people’s eyes and get them to ignore history. There is someone who once said to me at a conference, which I thought was quite apt, which was perhaps the second-generation biofuel industry had too many salesmen and not enough chief executives.

 

The people who were pushing for these very strong cellulosic biofuel mandates under the Renewable Fuel Standard as it was being developed were doing so for exactly the right reasons — for the same reasons that I and those we work with in Biofrontiers are looking for ambitious advanced biofuel targets to 2030. Clearly with the benefit of hindsight and contextualized by the financial crisis that made everything more difficult in that period than it otherwise would have been. Nevertheless, it is clear with hindsight. And the ambition probably went too far and I feel, and I know a lot of other people feel, that when you have this constant sense of an industry that is going slower than it has promised to go, that does undermine confidence. I think that there is a sort of a calming down and a retrenchment and a keenness in all quarters to be much more moderate and think and model through what is reasonable level of achievement to look for.”

On the Commission’s Low Emission Mobility Strategy and the Future of First-Generation Biofuels in Europe:

“So, as you say the European Commission has made a very clear statement that it sees advanced alternative fuels as the priority for European development for 2030. And there is various language about food-based fuels having a limited role. So, I think everyone would be enormously surprised, given that message has been so firm in these various communications, if we do not see a proposal for some sort of specific support for advanced alternative fuels or at least advanced biofuels hopefully, more broadly, advanced alternative fuels in the 2030 package.

 

And there are various forms that might take and there are always definitional questions — exactly what will the European Commission put into the advanced box and what might get left out. For listeners in the United States, it’s worth always remembering that the Environmental Protection Agency’s Renewable Fuel Standard definition of an advanced biofuel has been premised solely on carbon intensity reduction. When we are talking in the European context, we are talking very much about non-food resources and certainly at least some people talk specifically in terms of advanced technologies. So, we expect to see something there. There are various forms it could take.

 

I think the report does say where there are biofuels that are not delivering on climate objectives that there isn’t a case for continued support for those and I think that is a reasonable statement. And of course, for the representatives of those industries, we are going to have an ongoing discussion about what the evidence says about which first generation biofuels are better than which, what case there is to continue supporting things. I would personally be a little bit surprised if we saw a sort of an immediate zeroing out of support for these industries on first of January 2021 or whenever things come into effect.”

On Electrification and Biofuels Going Forward:

“This brings me back to something that we put up front and center in our framing and introduction to the Biofrontiers report, which is that even with electrification going well, moving forward and delivering emission reductions and growing the fleet to zero emission vehicles…even with efficiency standards delivering reductions in demand…coming from the International Council on Clean Transportation it is incumbent for me point out that vehicle efficiency standards have been enormously successful policies in this regard and will continue to be so.

 

With all of that, you are going to have a really large rump if you like of fuel demand come 2050, certainly at the global level and even in a region like Europe, which sort of looks to be ahead of the rest of the world in this regard. So, if you have technologies that can decarbonize, deliver low carbon fuels, that can do it with the correct legislative framework, that can do it sustainably and that while doing it can reduce import dependence, improve the balance of trade, deliver jobs, deliver investment, etc. why wouldn’t you want to do that?”