Narrow Focus on Electrifying Vehicles Will Harm Climate Efforts, Says Fuels Industry

July 13, 2021

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by Sean Goulding Carroll (EURACTIV.com) Favouring electrification while ignoring low-carbon liquid fuels will hinder the bloc’s efforts to decarbonise road transport, a prominent industry body has said ahead of the release of the EU’s climate law package.

The Renewable & Low-Carbon Liquid Fuels platform, a lobby group comprised of key players in the liquid fuels business, warned the Commission against choosing technological winners, a reference to Brussels’ increasing support for battery-powered vehicles over combustion engines.

“Just as there is no single type of car, there is no single way to decarbonise road transport. In the fight against climate change, the EU needs every sustainable solution it can muster – and that includes renewable and low-carbon liquid fuels,” the group said in a statement.

The EU should “adopt a technology-neutral approach that makes the best use of available options with proven emissions-reduction credentials, including biofuels from crops that meet stringent sustainability criteria,” according to the lobby group.

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Environmental groups have pushed back against the statement, however, arguing that a focus on biofuels will delay the switch to zero-emission vehicles.

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“The biofuels we produce are sustainable in every sense of the term,” Xavier Noyon, secretary general of the European Biodiesel Board (EBB), told EURACTIV.

Noyon emphasised the sustainability framework that EU biofuel producers must adhere to, which he said “encompasses traceability along the value chain, as well as third party certification”.

Noyon also accused green groups of choosing attention-grabbing statements over a more nuanced and realistic presentation of biofuels, particularly in their depiction of indirect land use change (ILUC).

ILUC refers to how biofuel demand may influence producers in the developing world to expand croplands, either to grow biofuels or to grow food crops to replace any shortfall caused by a switch to biofuels. This expansion can lead to the release of more carbon emissions as a result of the land-use change. Industry has questioned the complex formula behind ILUC measurement.

“If you include an updated ILUC impacts estimation based on the newest GLOBIOM insights and the actual development of biofuels and not on the scenario elaborated 10 years ago, every tonne still saves over 2 tonnes of CO2 emissions”, he said.

The criticism from green groups also overlooks the biofuels industry’s contribution to the circular economy, said Noyon, highlighting that the industry provides a means to productively reuse waste and residues from agriculture.

“Our biofuels are affordable, which facilitates inclusive climate policies. They also have the benefit of being available immediately for use in all transport modes,” he added.

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A leaked draft of the EU’s renewable energy law, seen by EURACTIV, reveals plans to increase the target for renewables to 38% – 40% by the end of the decade, with a planned increase in renewables in the transport sector from 14% to 26%. A sub-target has been set to boost the use of advanced biofuels from 3.5% to 5.5%.

Biofuel producers are anxiously awaiting the final version of the directive, which will strongly influence the future of the industry in Europe.

The industry is also waiting to see the updated CO2 standards for new cars and vans, which are expected to require vehicles to be almost emissions-free.

An early draft of the regulation includes a target of a 60% to 90% reduction in emissions from new vehicles by 2030.

Critics, such as the liquid fuels industry, say the move violates the European Commission’s commitment to “technology neutrality”, as it penalises combustion engines in favour of a shift towards e-vehicles. READ MORE

Opinion: The unintended harm of subsidizing electric vehicles and charging stations (Market Watch)

Excerpts from Market Watch: The Biden-Harris administration is seeking $174 billion in federal government support to build EV charging infrastructure and increase consumer EV adoption. It also seeks to bolster domestic production of inputs along the EV supply chain—particularly advanced batteries. This plan amounts to what may be the largest government intervention in U.S. industrial history.

However, in 2019 only 2% of vehicles sold in the U.S. were electric. We still have a lot to learn about the ability of electric vehicles to meet our transportation and climate needs, and there are risks in moving to artificially inflate EV demand while uncertainties remain about the ultimate climate benefits.

Driving a mile in an electric vehicle can be worse for the climate in cold weather locations where coal is the marginal source of electricity generation.

The Facts:

The pollution footprint of electric vehicles is determined by how the electricity that powers them is generated. In the U.S., 60% of electricity production is from burning fossil fuels (compared with 58% globally). Moreover, coal and gas generation are likely to be “on the margin” in most of the U.S.—that is, when an electric vehicle is plugged in, coal and gas are the primary fuel sources generating that charge.

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EV heating and cooling is drawn from the same battery as EV propulsion, so when the temperature is cold, the battery range can be reduced by as much as 25% to 60%. In places such as Minneapolis, where winters are cold and coal is the marginal source of electricity generation, driving a mile in an electric vehicle can be worse for the climate than driving a gasoline car.

The transition to a renewable electricity grid is still in its early stages, and barriers remain. While some consider a transition to 100% renewables within reach, others point to the technological advancements still required. As widespread power outages in California in 2020 and Texas in 2021 demonstrate, maintaining a reliable electricity grid is already a challenge. Making the grid cleaner requires shifting away from coal, but some steady sources of electricity remain necessary since wind and solar power produce electricity only when nature allows.

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New electric vehicles do not necessarily replace driving in gasoline-powered cars.

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We also find that, on average, households do not give up their gasoline car when they purchase an electric vehicle—the EV is an “extra” car 98% of the time. In contrast, when households buy a gasoline car, it replaces another car in four out of 10 cases (see chart). If miles driven in electric vehicles are not displacing gasoline miles, that matters for carbon reduction.

Subsidizing electric vehicles creates unintended consequences that harm the environment. An optimal policy would reduce the number of cars on the road; EV subsidies do the opposite by making electric vehicles cheaper while leaving the price of gasoline cars the same. In areas where electricity is generated from fossil fuels, EV subsidies send the wrong signal: “Here’s $7,500 to buy a car that you should feel free to charge using cheap coal electricity.” Drivers respond to these signals, both in terms of the cars they buy and the amount they drive. If the overall goal is to reduce pollution, EV subsidies are not the best way forward.

Subsidizing EV charging infrastructure may or may not encourage EV adoption. EV purchase subsidies are expensive, so policy makers hope that subsidizing charging infrastructure will also accelerate the transition to electric vehicles. While this strategy may work, we have yet to see the evidence.

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Increasing the cost of polluting is the best policy for reducing excess emissions. Economists overwhelmingly support putting a price on carbon. When the price of polluting is higher, it pushes consumers and firms to find cleaner alternatives—including alternatives that don’t exist yet in the market. READ MORE