Ten Billion Euros of Investment in Advanced Biofuels

by James Cogan At a time when carbon emissions should be dropping by 40%-80% EU transport emissions will actually increase by that amount, becoming the number one EU contributor to catastrophic global warming. -- Transport emissions can only be reduced in the 2030 timeframe by traffic efficiencies, biofuels and lower tailpipe emissions. To date the EU has not taken bold measures to pursue such avenues and any gains have been offset many times over by traffic growth. Electric vehicles comprise only a miniscule fraction of the EU vehicle fleet, sales are under 1% and even the most optimistic forecasts for sales growth would not lead to an impact until well after 2040.

After a good start in 2009 biofuels uptake was halted by unsubstantiated concerns that the environmental benefits over fossil fuels were not great enough. In 2014 the European Commission quenched all progress by ratcheting down the targets for them in renewable energy legislation. Low blend E10/B7 biofuels currently available for use in the EU have only penetrated about half the market and are stalled there because there simply isn’t any incentive for fuels distributors to do more. And even if the current market was fully exploited there could be no further growth as the EU is not making real moves to eliminate regulatory barriers to higher blend biofuels. So in the extremely unlikely scenario that some company manages to produce advanced biofuels able to compete on cost they would find no demand for them.

Between now and 2018 the 28 member states will be designing disruptive climate and energy plans and their planners will be desperately seeking measures for reducing transport pollution.

Ten billion is tiny compared to the hundreds of billions going into wind and solar generation around the world but it is huge compared to the current level of investment in biofuels which is zero.

There are other resource efficiency measures that planners will have to exploit and these are crop yield increases, acceleration of the trend away from land intensive red meat, rebalancing of agricultural output as a consequence of reduced food waste and use of underused carbon poor land in and around the EU.

These measures will allow planners exploit proven conventional biofuels as well as emerging advanced biofuels. Member states could even combine their biofuels growth with common sense mitigation actions such as rewilding in the EU and cutting imports of agricultural products known to be unsustainable and linked with deforestation. They will exploit to the maximum the fact that making bioethanol results in a ton of home grown animal feed for every ton of fuel and that this is a direct and measurable way of actually reducing deforestation in developing countries brought about by EU demand for imported animal feed and beef.

The Commission recently proposed a revised energy tax directive designed to overturn the original version which actually taxes fuels in reverse order of their climate benefits.

If EU directives are left as they are, promoting and mandating low GHG biofuels will mostly be a job for individual member states. Each will devise its own package based on techniques similar to the old tax, energy and fuel directives but very much bigger and bolder. Critically, they will also have to reinforce their legislative efforts by putting biofuels at the centre of rural development strategies, and by directing structural, innovation and economic development funding at the sector. Agricultural ministries and industrial development agencies will need to make it part of their missions. Farmers and rural communities will thrive as dozens of EU regions get major foreign direct investment in biomass production and processing.

The Commission will still have a role, providing a common language for the process, accelerating standards development, clearing blend wall barriers and assuring real-time exchange between the member states of their policies and plans. The Commission will be more about removing disincentives than creating incentives. If there is one thing the Commission will be obliged to do well and soon it is the provision of a practical system for annualised scoring of biofuels suppliers – advanced or otherwise – according to their real GHG benefits. READ MORE and MORE (Reuters)