As Petroleum Prices, Demand Soars, US, EU Dither on Biofuels
by Jim Lane (Biofuels Digest) … US gasoline prices are at a three-year high, says CNBC.
This time, the response has been to dither on biofuels and to point to reasonably dismal sales of EVs as evidence that an electrics solution is on the horizon.
In Texas, IHS Markit reports that current global total liquids oil demand is approximately 100 million barrels per day, expects global GDP to grow by 3.4 percent in both 2018 and 2019, respectively, due to convergence of robust economic activity in many markets around the world.
What about EVs? “Although EVs undoubtedly have the potential to disrupt the energy and automotive sectors in the longer term,” IHS says, “they currently make up around 1.5 percent to 2 percent of total global vehicle sales, and account for less than 0.5 percent of the global vehicle fleet; so their influence on the oil market, in the short term, is limited.”
Meanwhile, backtracking, dithering on biofuels
The power once held by a coalition of interests that once propelled first-generation biofuels to their current usage levels has crumbled in so many ways. Though there have been significant challenges to the expansion of first-gen biofuels in recent years — now, we are seeing evidence of real fall-back in mandate levels. Groups of first-gen producers are responding via co-ordinated analyses and declarations to rally their supporters, technological innovation to reach deeper into advanced biofuels.
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EPA Data: Small Refiner Waivers lower RFS mandates by 1.6B gallons
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Conventional biofuels phase out?
Meanwhile, in Europe, the European Parliament voted in favor of the RED II (Renewable Energy Directive) proposal in January. Probably the most notable (or at least covered in the news the most) was their decision to remove biodiesel made from palm oil from its list of biofuels that can count towards the EU’s renewables target from 2021. But more may be on the way — a complete phase-out of ethanol made from conventional crops.
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Reaction in the US: technology shift
Examples abound of US ethanol producers adding small amounts of cellulosic ethanol production.
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From Europe: Ditching palm is OK, but not us Euro producers
In Europe, the strategy has been more around accepting the demise of palm oil and focusing on joint political action to oppose any declines in ethanol production volumes.
“Long term sustainable solution in line with market realities” – is the message from the Visegrad 4+3 group representing the biofuel industry in seven Central European countries in a joint declaration to the RED 2 Directive trilogue process published today. The group represents biofuel associations and 31 biofuel companies from Poland, Czech Republic, Hungary, Slovakia, Lithuania, Latvia and Bulgaria.
The joint declaration calls on policy makers to ensure the use of proven crop based biofuels is not reduced or capped and to set a minimum 12% level of actual (not multiple counted) renewables in transport by 2030. It advocates reasonable policy support for advanced biofuels. It adds that multiple counting supports fossil fuel, increases oil’s market share in transport, leads to higher GHG emissions and precludes private investments in renewables.
“We propose reasonable and realistic phasing in of advanced biofuels, on the top of crop-based biofuels; taking cost, sustainability and viability criteria into account.” said Zuzana Jakubičková, Director of Legal Affairs, Slovakian Biofuels Association.
The group supports the European Parliament decision to ban palm oil.
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Meanwhile, consolidation in the US READ MORE
Central, Eastern European nations condemn crop-biofuel cap post-2020 (Platts)
