Biofuels Production and Consumption in Germany: Status, Advances and Challenges

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May 29, 2020

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by Franziska Müller-Langer, Nicolaus Dahmen and Gabriel Costa de Paiva (Deutsches Biomasseforschungszentrum/Karlsruhe Institute of Technology/IEA Bioenergy) ... This feature article summarizes the current status of transport sector biofuels in Germany including major policy drivers, decarbonization strategies and initiatives as well as recent advances in technology development.

2. Current status of transport sector biofuels
In 2018, Germany’s transport sector energy consumption (63.6 Mtoe w/o electricity) was 96% fossil fuels (52.5% diesel, 26.1% gasoline and 16.4% jet fuel, CNG/LNG about 0.2% and LPG 0.5%) and only 4.3% renewable fuels, primarily biofuels such as biodiesel (FAME) with 1.93 Mtoe and bioethanol with 0.76 Mtoe. Usage levels of other renewable fuels like vegetable oils, HVO/HEFA and biomethane were less than 0.1 Mtoe (Naumann et al. 2019; UBA 2020; FNR 2020).

Lack of incentives translates into modest market demand for fuels like E85, pure FAME or vegetable oils.

Germany’s biofuel sector has been heavily influenced by changing political conditions in recent years.

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While the fraction of pure biofuels was around 60% (2.7 million tons) of total renewable fuels in Germany in 2007, by 2018 it had dropped to well below 1%. Similarly, HVO/HEFA had a significant use share of 17% (0.47 million tons) in the middle of this period, however this declined to 1% in 2017/2018. HVO/HEFA is not produced in Germany, it is completely imported. In contrast, Germany is currently a net exporter of biodiesel (0.8 million tons). The production volumes of biodiesel (FAME) were at about the same level as domestic use until 2011. Since 2012, production volumes have been rising slightly despite decreasing biodiesel use.

The biofuel market for gasoline substitutes has developed comparatively continuously and since 2011 has accounted
for up to 23% (1.2 million tons) of total biofuel used (by energy content). The remaining demand is imported. Biomethane has established itself on the market and recent trends show increasing use (biogaspartner 2019).

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In 2018, Germany’s use of biofuels avoided 9.5 million tons GHG emissions. The average specific GHG mitigation potential of biofuels within the GHG quota is 83% for biodiesel (FAME), 77% for HVO/HEFA, 86% for bioethanol and
90% for biomethane. This increase compared to 2017 is due to new fossil reference values but also to an increasing shift to using biobased residues for fuel production (mainly used cooking oil, UCO). (BLE 2019)

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3. Policies driving production and consumption

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Key to fulfilling the European Union’s (EU) Renewable Energy Directive (RED) and Fuel Quality Directive (FQD) targets is the GHG-emissions based quota system that was implemented starting in 2015.

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In addition to REDII and ESR, one of the main public drivers is the EU’s CO2 regulation for vehicles. By the end of 2020, for instance, a fleet consumption limit of 95 g(CO2)/km will apply to all newly registered passenger cars, with a fleet consumption reduction of 37.5% in 2030 targeted compared to the reference year (2021). Following this, debate shifts to electric mobility and battery-powered vehicles.

Recently, the EU’s new Green Deal with its goal to reduce GHG emissions to net-zero by 2050 has come to dominate
policy discussions in Brussels and Berlin, which will also influence transport fuels policies.

4. Strategies and initiatives with links to renewable (bio)fuels

Biofuels are considered to be one important renewable alternative for the transport sector out of several different
alternatives, each of them further promoted by ongoing strategies and initiatives.

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The most important strategies and related public funding are highlighted as follows.

The 7th Energy Research Programme issued by the Federal Government of Germany, asking for new kinds of improved
fuels, e.g., biofuels from waste substances and residues, fuels from renewable electrical energy, or solar fuels.

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Public funding for alternative motor fuels on the national scale is also supported by the Ministry of Transport and Digital Infrastructure (BMVI) with regard to, e.g., infrastructure, e-mobility, LNG, CNG, jet fuel, and by the Federal Ministry of Education and Research (BMBF) with the “Kopernikus Projects”. Moreover, the Ministry of Economic Affairs and Energy (BMWi) is focusing on e-fuels in its “Energy transition in transport” programme. Under the Renewable Resources Funding Scheme of the Federal Ministry of Food and Agriculture (BMEL), 23 R&D projects have received funding.

Examples of the main topics funded include novel routes for the production of fuels or fuel additives and adapting
internal combustion engines for multiple fuels. However, bioenergy research is also influenced by the sustainability
strategy, the biomass action plan, the bioeconomy research strategy and policy strategy, as well as the forestry and
wood products strategies.

To decarbonise the transport sector, high priority has been given to electro-mobility for short-distance traffic and
passenger cars and to using methane as a transport fuel, e.g., like liquefied natural gas (LNG) for heavy-duty land and
waterborne transport. Expert groups like the Federal Government convened National Platform Future of Mobility
(NPM) are involved in these often controversial discussions.

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5. Advances in renewable (bio)fuels technologies

5.1. Conventional biofuels
As mentioned above (e.g., Fig. 1) conventional biofuels such as biodiesel (FAME) and bioethanol are the main fuels used to fullfil Germany’s GHG reduction quota. A shift is occurring in greater use of biobased residues (mainly used cooking oil, UCO) and in the use of by-product CO2 from ethanol production. Biomethane and HVO/HEFA still contribute minor shares.

5.2. Advanced biofuels
There are many projects focused on developing advanced transport biofuels. These are funded by a variety of different
funding programs focused on the development and implementation of new kinds of improved fuels (e.g., biofuels from
waste substances and residues, fuels from renewable electrical energy, or solar fuels), with projects spanning a wide
range of technology readiness levels (TRL) or fuel readiness levels (FRL).

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5.3. Other renewable fuels
Power-based fuels (PtX or e-fuels) have attracted particular attention in Germany´s energy transition for mobility.
Through the Federal Ministry for Economic Affairs and Energy’s funding initiative “Energy transition in the transport
sector”, fifteen research associations have been formed to work on different aspects of the production and utilization
of innovative, power-based fuels. Methane, diesel, gasoline, marine and aviation fuels are covered; synergistic use of
biomass as carbon or hydrogen source is also considered here. (BMWi 2020).

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A more recent focus is on waste-to-fuel strategies (or recycled carbon fuels), stimulated by the EU´s and national
renewed emphasis on circular economy concepts, with a focus on chemical recycling prior to energetic use.

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Decomposition to platform molecules as building blocks chemicals and fuels are practically not established. Therefore, thermal depolymerization of plastics is studied to produce fuel components, supported by catalytic process steps to increase product quality.

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6. Prospects of biofuels in Germany
Market developments for renewable (bio)fuels are mainly set by policy. Stronger policy support by market incentive programmes as well as a greater rate of innovation will be required to reduce the cost of developing and scaling up sustainable fuel production. In fact, fulfilment of Germany’s climate protection plan (requiring about 40% GHG reduction in transport by 2030) will require a significant reduction in final energy demand as well as a higher share of
renewables in the transport sector, which can only be achieved when several fuel options are considered in addition to e-mobility and other measures. At the latest, new production facilities and infrastructure for advanced fuels including
BTL/PTL will be required from 2021 (Meisel et al. 2020). There is a urgent need to elaborate the support framework
and formulate reliable ramp-up scenarios.

Not only is the production of advanced fuels important, but also a variety of supplementary work. This includes, for
example, fuel blending and testing in view to fit the standards, the adaption and extension of existing norms, development of adequate fuel analysis and testing devices and protocols (which are generally optimized for fossil fuels
and not necessarily well-suited for other types of fuels), and many other time consuming, often underestimated aspects
of feedstock provision, fuel production and market implementation.

Despite the EU’s Green Deal and related directives and regulations and their national transposition, it is very likely that
the GHG emissions reduction quota will be continued after 2021, with additional CO2-related instruments also coming
into effect. Measures discussed above to promote e-mobility, methane as well as hydrogen as transport fuels, will in
general have a positive impact on the market however not necessarily for biofuels. Of course, the Covid-19 pandemic
also has and will have heavy impacts on all issues related to sustainable survival and development. These risks will
discourage fuel producers and the related market. READ MORE