EU Is ‘Driving without a Map’ on Biofuels Policy, Auditors Find

Aviation Fuel/Sustainable Aviation Fuel (SAF)Business News/Analysis certification China European Union (EU)Feedstocks Field/Orchard/Plantation Crops/Residues Infrastructure Marketing/Market Forces and Sales Not Agriculture Opinions Policy Sustainability

December 14, 2023

Print This Article Share it With Friends

by Sean Goulding Carroll (Euractiv.com) The EU’s complex policy approach to biofuels lacks a long-term outlook and risks undermining the bloc’s transport decarbonisation targets, an analysis by the European Court of Auditors (ECA) has found.

The ECA, an independent watchdog, examined the EU’s support for biofuels to cut transport emissions, and found that the ever-shifting web of policies have led to an unclear road ahead for the fuels.

In the early 2000s, the European Commission considered crop-based biofuels as a key means to achieve clean mobility and pushed forward legislation to ensure they reach 10% of energy use in road transport by 2020.

However, the policy was reversed years later following concerns that biofuels could contribute to deforestation abroad, a concept known as indirect land use change. In 2015, EU legislators decided to place a 7% limit on how much crop-based biofuel can be used in the road transport sector.

Since then, EU policymakers have bet largely on electrification to decarbonise passenger cars and attempted to set ground rules that mitigate potential environmental harm whilst harnessing biofuels to decarbonise the transport sector.

But according to auditors, in doing so policymakers have created a “foggy future” for biofuels in the EU.

...

As biofuels are generally more expensive to produce than fossil fuels, policies are used to boost their attractiveness, such as allowing advanced biofuels, made from residues and wastes, to count twice towards transport renewable energy targets.

But the use of multipliers for advanced biofuels was criticised by auditors as obscuring the true progress made in cutting emissions.

...

Despite the EU’s renewable energy directive setting out sustainability criteria for biofuels, lingering concerns remain over their level of carbon savings, according to auditors.

The narrative that biofuels will increase Europe’s energy independence was also questioned, as feedstock imports have increased in line with rising demand for biomass. The report highlights the example of Finland, where 90% of biofuels consumed used non-EU biomass.

...

ReFuelEU Aviation mandates that a progressively increasing percentage of green jet fuel is blended with fossil kerosene to decarbonise the aviation sector, while FuelEU Maritime sets carbon-reduction targets for the fuels used in shipping.

However, Europe’s ability to produce second-generation biofuels is not expected to be able to meet demand in the short term – a reality partially attributable to the unstable policy landscape.

...

The report calls on the European Commission to “increase biofuels policy stability” by preparing a pathway for the sector beyond 2030. The EU executive should also better categorise feedstocks to provide clarity to member states and stability to industry.

Finally, auditors recommend that the Commission improve the level of data it collects around biofuels, including on the origin of feedstocks (which is currently missing), as well as increasing transparency around the effect of multipliers on the renewable energy share in transport. READ MORE

Related articles

Calls for tighter rules on biofuels imports to root out palm oil fraud -- Investigations suggest a large share of ‘used’ cooking oil being imported could be wrongly labelled as demand outpaces supply (The Guardian)
Foggy future for biofuels in the EU (European Court of Auditors)

Excerpt from European Court fo Auditors: The EU allocated €430 million, mostly for research, but deployment of advanced biofuels is taking longer than expected; EU biofuels policy lacks a long-term perspective; Biofuels are not yet competitive and not always environmentally friendly, and production is limited by biomass availability issues

The road ahead for biofuels is unclear and fraught with pitfalls, warns a report published today by the European Court of Auditors. The lack of a long-term perspective has affected investment security, while sustainability issues, the race for biomass, and high costs constrain the deployment of biofuels.

Biofuels are considered as an alternative to fossil fuels, the aim being to help reduce greenhouse gas emissions in the transport sector and improve the EU’s security of supply. For the 2014-2020 period, around €430 million in EU funding was allocated to research projects and the promotion of biofuels. But moving from initial laboratory research to the production phase can take at least a decade. On top of that, EU biofuels policy, legislation and priorities have often shifted, making the sector less attractive and impacting investors’ decisions.

“Biofuels are meant to contribute to the EU’s climate-neutrality objectives and enhance its energy sovereignty. With its current biofuels policy, however, the EU is driving without a map and runs the risk of not reaching its destination”, said Nikolaos Milionis, the ECA member who led the audit.

The absence of a clear roadmap is an issue the EU auditors particularly highlight. Take, for example, aviation. The sector is difficult to electrify, and so advanced biofuels could be a good option for decarbonisation. The new ReFuelEU Aviation legislation adopted in 2023 set the required level of sustainable aviation fuel (SAF) – including biofuels – for 2030 at 6 %, or about 2.76 million tonnes of oil equivalent. But at present, potential production capacity in the EU hardly reaches a tenth of that amount. And there is still no EU-level roadmap on how to speed up production, unlike in the US. The future of biofuels in road transport is also very much unclear. The heavy bet on electric cars, combined with the planned end of new petrol and diesel cars by 2035, could mean that biofuels have no large-scale future in road transport in the EU.

The EU auditors also point to three main issues that biofuels are facing on the ground: sustainability, biomass availability, and cost.

The environmental benefits of biofuels are often overstated. For example, biofuels from feedstock that requires land to grow (and so may entail deforestation) may adversely affect biodiversity, soil and water. This inevitably raises ethical questions about the relative priorities of fuel and food.

In addition, the availability of biomass limits the deployment of biofuels. The European Commission expected biofuels to increase energy independence. However, in reality, reliance on third countries (e.g. imports of used cooking oil from China, the UK, Malaysia and Indonesia) has soared due to rising demand for biomass over the years. The fact is that the biofuels sector competes with other sectors for raw materials, especially with the food sector, but also with cosmetics, pharmaceuticals, and bioplastics.

Lastly, as biofuels are more expensive than fossil fuels, they are not yet economically viable. And emission allowances are currently cheaper than reducing CO2 emissions by using biofuels, which fiscal policies in EU countries do not always favour.

All this means that the deployment of advanced biofuels is slower than expected. As required, all EU countries imposed obligations on fuel suppliers to ensure that the share of renewable energy was at least 10 % by 2020 in the road and rail transport sectors, and 14 % in all transport sectors by 2030. However, a majority of EU countries missed their targets in 2020, including Greece, Poland, Romania, France and Spain, to name but a few.

Background information

Biofuels are defined in the latest EU Renewable Energy Directive as “liquid fuels for transport produced from biomass” and must meet certain sustainability criteria. In 2021, most biofuels consumed in the EU were crop-based (mainly ethanol and biodiesel).

Special report 29/2023, “The EU’s support for sustainable biofuels in transport: an unclear route ahead”, is available on the ECA website. Special report 29/2023: The EU’s support for sustainable biofuels in transport – An unclear route ahead READ MORE