Advanced BioFuels USA

A proposed reduction trajectory for fossil fuel use towards zero in 2050, starting from the actual 2018 energy consumption in Netherlands transport (2018 data based on CBS, Statistics Netherlands)

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 Non-fossil energy sources are required to cover this rising energy demand. The transport sector, worldwide and also in the Netherlands, still depends for more than 95% of its energy demand on fossil sources. The sector will have to prepare itself for solutions without deployment of fossil feedstocks to meet that energy demand.

The proposed limit, which provides for a fossil reduction pathway, is a clear signal to fuel and energy suppliers and parties in the transport sector to focus in the next three decades on switching to renewable energy carriers and renewable energy mobility services. It provides an incentive for innovation and encourages investments in climate-neutral options. A cap on fossil ensures cooperation and at the same time encourages healthy competition between all existing market players and new entrants to come up with cost-effective solutions.

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According to information from the Netherlands Emission Authority 24 PJ of renewable energy has been introduced into road transport, in accordance with the annual obligation Renewable Energy in Transport. This is based almost entirely on the basis of certified, sustainable biofuels. Though 0.7 PJ of electricity was supplied to road vehicles, the share of renewable electricity in 20189 in all generated electricity in the Netherlands is still at moderate levels (only 15%)[5], so only 0.1 PJ can be attributed as renewable electricity.[6]

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How could a cap on fossil fuels work?

The question is which parties in the market in 2030 can supply the limited volume of 300-330 PJ fossil for that year to the market. There are several methods to design a cap on fossil use. One possibility is to sell the ‘right to sell fossil’ to market players. The volume of fossil is sold per auction, up to the set limited amount. This creates a threshold on the fossil side and as results opens up the market volumes for renewable solutions. Market parties are invited to come up with further suggestions.

In the current regulation landscape, the renewables share is capped to annual obligation limits. There exists no limit to the use of fossil and as a result the fossil volumes can grow when energy demands grow. Setting a target for renewable means that the market does not go beyond the target. The renewable share remains limited. This limit gives too little incentive to reduce the costs of green options. It is necessary to reverse the situation. Making the share of fossil resources scarce must better position the alternatives.

Under the proposed ‘limit on fossil’ system the amount fossil allowed is capped (and the ceiling is lowered over the years) and any further energy demand increase needs to be fulfilled with renewable energy, be it via ‘electrons’ or ‘molecules’. This is how the market operation can be transformed and become based on renewable as the ‘new normal’.   READ MORE