Advanced Biofuels: Avoiding a Second Missed Opportunity

The recast of the Renewable Energy Directive (REDII) marks the first time that a European Directive needs to be significantly amended just a year and a half after its adoption and before even it was transposed into national law, write a group of experts.

This implies that the European institutions in 2018 failed to recognize the urgency of introducing appropriate measures in the REDII that would have been compatible with the Paris 2050 Agreement and the wider objectives of the European Union in fighting climate change. The opportunity missed by the European Institutions in 2018 should not be repeated in 2021.

The Sub-Group on Advanced Biofuels (SGAB) consisted mainly of industry representatives. It was created in 2016 as a consultative group to the DG MOVE Sustainable Transport Forum (STF) to assist the STF in recommending appropriate strategies for advancing the implementation of the revised RED directive, notably through issuing recommendations aimed at facilitating the deployment and use of alternative and renewable sustainable fuels at EU level.

The main recommendations of the SGAB were issued in 2017 and are still valid. Actually, the SGAB editors believe that the 2017 SGAB targets are the minimum that the REDII revision should incorporate and should be doubled if the European Union indeed intends to take on global leadership.

Despite that the fact that the renewable fuels sector to date has realized the majority (>95%) of GHG emission savings achieved in the transport sector, the lack of stable policies and financial support has resulted in the biofuel and alternative fuel industry not having been mobilized to its full capacity.

The EU has been successful in creating instruments and support structures for long term R&I developments but has been considerably less successful with respect to the phase that follows: the commercialization and deployment phase. This has led to built up experiences disappearing, IPR portfolios losing value and a risk that developed technologies are commercialized elsewhere.

The EU has instituted robust sustainability regulations; this system should go hand-in-hand with innovative agriculture and forestry management practices to increase the availability of sustainable biomass resources. However, crop-based fuels, even if fully meeting the requirements, are capped. Despite this, there are still parties advocating a full phase out.

For a true and transparent decarbonisation policy, double counting is ineffective as a promotional driver. The instrument of ‘double counting and multiplier” results in lower physical shares of renewable fuels and in that way leads to lower actual GHG emission reduction and a lower public understanding of the renewable fuels area. The instrument should be replaced by one that favours high GHG emission savings.

In addition, member states have enormous freedom to select many aspects of their policies ‘a la carte’, e.g. double-counting or not, lowering of caps, the acceptance of RCF in the RE-T target, leading to a fragmentation of the Single European Market for certain biofuels and renewable fuels, increased uncertainty among industrial and financial players, and last but not least, confusion for the European citizen.

It is urgent that this REDII revision should carefully consider the recommendations of the low carbon fuels industry, which is actually the only stakeholder that will shoulder the technology risks and carry the investment burdens to make the Paris RE-T decarbonisation targets come true.

The EU’s Green Deal and the Recovery plan demonstrated the missing urgency thus far in addressing climate change. This is welcome, and this valuable opportunity in recasting a robust REDII should not be missed.

The 2030 REDII advanced biofuels target of 1.75% (i.e. 3.5%/2) is clearly inadequate in view of the Paris Agreement goals, given the climate urgency. The advanced biofuels target needs to be increased significantly. The SGAB work, based on the assessment provided by industry, concluded that the advanced fuels industry can contribute between 7.2% and 10.7% of total EU transport energy needs by 2030, without any double counting.

Sustainable biofuels derived roughly equally from lignocellulosic feedstocks (Advanced biofuels, Annex IX Part A feedstock) and hydrogenated lipid fuels (both crop-based and Annex IX Part B feedstock) can provide between 6% and 9%; in addition, e-Fuels (Renewable fuels of non-biological origin) can contribute between 0.5% and 0.7% and Low Carbon Fossil Fuels (Recycle Carbon Fuels) between 0.7% and 1.0% of transport fuel needs by 2030.

However, such a contribution can only be delivered if an appropriate policy framework is put in place which creates the conditions enabling the substantial investments required to develop, demonstrate and deploy the technologies. The ongoing revision of REDII provides for such an opportunity that should not be missed. This includes several aspects:

• Options open to member states on double-counting should be discarded as it is not effective.
• All member states should accept alternative and renewable sustainable fuels, including RCF, that meet the sustainability criteria defined by EU-common regulations and thereby assisting in the fulfillment of the Paris obligations of each Member and the Union as a whole.
• Support measures that have been proposed in other policy initiatives, notably in the Hydrogen Strategy, e.g. Carbon Contracts for Difference and associated changes required to the State Aid regulations are announced, should be structured to be also fully compatible for other fuels, e.g. advanced biofuels, and other technologies, and not be hydrogen-specific only.
• Crop-based biofuels should not be phased out as these are already subject to stringent sustainability requirements including minimum levels of green-house gas savings.

The Subgroup on Advanced Biofuels is comprised of Kyriakos Maniatis, Lars Waldheim, Ingvar Landälv, Eric van den Heuvel and Stamatis Kalligeros. This article originally published on EURACTIV on Oct. 27, 2020. Republished with permission of the authors.