Author Archives: Chris Malins

A leap forward for European advanced biofuel policy

01 Dec 16
Chris Malins
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Yesterday, the European Commission released its proposal for the renewable energy regime for Europe through to 2030. The proposal includes a framework for supporting and regulating the supply of alternative fuels, including biofuels, fuels produced from power-to-liquids technologies, and fuels produced from non-renewable waste streams, notably technologies such as Lanzatech’s carbon monoxide fermentation. As is the way with these things, much of the initial reception to the package has been hostile – the European Biodiesel Board accused the package of being “a worrying weakening of ambitions”, the ethanol association ePURE said that the package “ignores science”, Birdlife International said that the Commission was “ignoring science” (after all, there’s a lot of science to take into consideration…), Transport and Environment asserted that the Commission had “today proposed to keep supporting planet-wrecking biofuels,” and CNBC reported* that the, “death of Castro could free Cuba to produce biofuels.”

Now, there is context for all of these statements, and a little hyperbole is all part of the fun of the democratic process, but here at Cerulogy we’re a good natured bunch and we see a great deal in the new proposal that can be welcomed. Most importantly, the proposal sets a clear and ring-fenced target for a defined set of advanced biofuels, primarily those produced from cellulosic material (also stuff such as algae and municipal waste). This target increases to 3.6% (of European road and rail transport energy demand) by 2030. There are various ways that one could incentivise the commercialisation of advanced biofuels, but a nice clear production mandate, while lacking the sophistication of measures such as low carbon fuel standards, has the potential to do the job pretty effectively. The level that this part of the target has been set at is undoubtedly ambitious – 3.6% of 2030 road and rail fuel demand is around nine million tonnes of oil equivalent, which is a lot of fuel. Meeting this ambition from European production could require as many as a couple of hundred commercial fuel production facilities, so we’re talking about building up to 20 new, high capital expenditure, advanced biofuel plants in every year of the 20s. On the other hand, the ambition is not out of control – compare it to the American cellulosic fuel mandate, which in 2009 set a target to deliver an extravagant 30 million tonnes of oil equivalent a year by 2022. To my mind, the European Commission has found a pretty appropriate balance between recognising the urgency of the challenge of dealing with climate change, recognising the limits on the capacity to deploy capital for technologies that have had only limited testing at commercial scale., and recognising that unachievably ambitious targets can be a barrier rather than a spur to investment and innovation. The ‘Leaders of Sustainable Biofuels’ (see artist’s impression below) duly bucked the trend of Brussels-lobby negativity by calling the proposal a “significant step to enhance the EU innovation capacity and stimulate green growth.”

The author conflates the Lego Justice League with the 'Leaders of Sustainable Biofuels' for comic effect

Artist’s impression of a meeting of the Leaders of Sustainable Biofuels

Beyond the core incentive for “advanced” biofuels (defined by the Commission through a list of relevant feedstocks), there is an overall target that by 2030 6.8% of transport energy** should be supplied from a defined set of alternative fuels. The additional 3.2% is to be split between biodiesel from used cooking oil and animal fats, ethanol from molasses, waste-based fossil fuels, electricity in road transport, and ‘renewable fuels of non-biological origin’ (presumably fuel produced using renewable electricity).. The incentive for the supply of biodiesel from used cooking oil is maintained, but new biofuel technologies are not being asked to compete directly with the supply chain for an already commercialised product, which is eminently sensible in driving new innovations to market. The Lanzatech technology for ethanol from waste carbon monoxide in flue gas, previously overlooked by legislation, is now able to receive support. Technologies to use renewable electricity in transport are included. As with the 3.6% target, 3.2% for these other fuels combines a degree of realism with a commitment to achievability. In short, it’s a B+ to the Commission for supporting the deployment of a more sustainable next generation of alternative fuels.

At risk of interrupting the flow of positivity, a notable fly in the ointment is the failure to properly address issues around the sustainability of these fuels. The criteria in the new Directive should generally ensure that production processes are fairly efficient, and provide a degree of protection to the most valuable ecosystems, but they fail to directly address any of the issues related to sustainable extraction rates for agricultural residues, fail to directly address the local sustainability of energy cropping systems (e.g. impact on air, soil, water or biodiversity), fail to ensure that waste-based fossil fuels are actually low carbon (although power is delegated to the Commission to revise this), and will fail to give European civil society confidence that the Commission is taking seriously the many sustainability concerns that have been raised since the adoption of the original Renewable Energy Directive in 2009.

The justification for largely failing to expand the scope of sustainability governance is a little perplexing. For instance, the impact assessment notes that, “Stakeholders were also of the view that sustainability criteria haven’t adequately addressed the protection of soil and water.” This, however, is followed almost immediately by the assertion that, “The content of the criteria as such was not put into question,” a pair of statements that I personally am having trouble stitching together. It is not only environmental groups that see a case for expanded sustainability oversight – work for the Commission itself on the need for criteria on air, soil and water impacts concluded that, “risks to sustainability from biofuel cultivation exist, particularly risks to soils and to water quality and water availability. Given these risks…, introducing some form of environmental safeguards is necessary to avoid further aggravation of existing adverse impacts.” The Commission have pointed to the REFIT on the Renewable Directive to justify the failure to expand criteria, saying that it concludes that the “criteria have effectively reduced direct environmental impacts of the biofuels used in most of the EU.” However, this requires one to take the REFIT report wilfully out of context. While the authors CE Delft do indeed state that the existing criteria “have been effective in the prevention of the direct environmental impacts of biofuel production”, the very same paragraph continues by noting that “the criteria do not regulate direct impacts as water pollution by waste water, social impacts, etc. Therefore not all direct impacts are covered. In the EU, other legislation covers the prevention of such local impacts (see also Art. 17(6)), but whether effective safeguards are in place for feedstock from countries outside the EU is currently unknown.” The REFIT also notes that, “Because the indirect impact of biofuel feedstock is not included in the criteria there is still a risk biofuel feedstock production might result in an increase in GHG emissions rather than reduction of emissions, and a net loss of biodiversity and loss of land with high carbon stock.”

In short, the new directive represents a missed opportunity to deal upfront with legitimate sustainability concerns, and therefore we can look forward to the next two years being punctuated by a return to the sort of rear-guard campaign action to expand sustainability coverage that resulted in an ILUC review clause being inserted in the original RED, and much subsequent uncertainty for both the environment and industry. Slightly ironically, while the new text falls short on the points I noted above, it does make important progress on sustainability in forestry specifically. New clauses require that forest biomass should only be harvested in areas where legal requirements or active project oversight guarantee that removals will be followed by forest regrowth, that “impacts of forest harvesting on soil quality and biodiversity are minimised” and that “harvesting does not exceed the long-term production capacity of the forest”. There will no doubt be important questions about how this will be implemented in practice, but the focus in this new text on making appropriate sustainability assessment at the local level echoes work by the Institute for European Environmental Policy for the Biofrontiers project, which proposed that regionally adapted environmental impact assessment should be a precondition for developing new biomass supply chains for an expanding advanced biofuels industry. I am convinced that it’s in everyone’s interest to make sure that a more comprehensive set of criteria is included in the Directive by the time it’s been through the Parliament and Council, as inadequate sustainability governance is a guarantee of policy uncertainty for years to come.

Before I close, it would be remiss to comment on the new proposal without noting that the Commission has laid out a firm pathway for a gradual phase down of first generation biofuel use in Europe, capping the maximum utilisation of food based fuels in any given Member State at 3.8% by 2030. The use of food and feed commodities for fuel remains contentious, and it was almost inevitable that whatever the Commission proposed would be seen as unsatisfactory by all the most interested parties. With the Commission having indicated that food-based biofuels would have ‘no place’ in the post-2020 framework, we can expect that development campaigners will call for a more rapid reduction, while on the other side the first generation biofuels industry is bound to oppose reduction in its support, pointing to the ‘direct’ carbon savings that they are able to claim under the existing carbon accounting system. While the precise level of the 2030 limit will undoubtedly be debated incessantly until the new package is finalised, I’m pleased to see a proposal that sets an extremely clear direction of travel for Europe towards a new advanced industry, while providing an opportunity for a (relatively) graceful exit by businesses that made investments in good faith in response to the original legislation. The new text is also quite explicit that Member States can consider providing greater support to lower-ILUC ethanol than higher-ILUC biodiesel production, and I hope to see government embrace this option and provide differentiated support that recognises that food-based ethanol has better performance than food-based biodiesel, and that there are options to transform first generation ethanol facilities over time into advanced biofuel plants – options that are not really available for biodiesel plants. At the same time, the gradual reduction in food-commodity demand for European renewable energy targets will avoid pressure on food prices and stocks, and sets an example that the rest of the world is bound to look to.

In conclusion, the new proposal doesn’t dot every ‘I’ or cross every ‘t’ required to be anybody’s ideal instrument, but it has a lot to offer, and I think that it should be welcomed as a constructive response to the challenges of the current policy. I shall be hoping that yesterday fired the starting pistol on an aggressive program of industrial development in European advanced alternative fuels for the coming decades.

 

*Admittedly, this article may have been only incidentally inspired by the release of the Commission’s proposal.

**Strictly, an amount of transport energy equivalent to 6.8% of transport energy consumption for road and rail.