Interview with Emanuel Proenca, ABA President

October 2022

ABA Interview: "As long as there is 1L of oil in national mobility, there is an opportunity for ABA to grow"

Much has changed in the advanced bioenergy landscape in the last three years. The balance is positive and shows us a growing market, with the potential to transform mobility, decarbonize the sector and value waste as a raw material of tomorrow. Get to know ABA's work in this interview with the President, Emanuel Proença, and learn about the goals and ambitions for the future.

Q. With 3 years and 15 associated companies, what highlights and achievements have marked these years of ABA's presence in the market? 

Looking at where we were three years ago, we felt that there was a great misunderstanding on the part of stakeholders, legislators, and even NGOs of what the sector is, what it represents and the contribution it can bring to the Portuguese economy, the society, the circular economy and the transformation of mobility through the use of green fuels.

Looking where we are today, we can see that legislation has evolved a lot and I believe this is because we have brought to the attention of policy makers and the various supporting bodies much more information about what we're really doing. We came out of the shadows (and of being closed in our factories) and went out to explain, both to the final consumer and to the various agents that influence the sector, what we do, how we do it, and why what we do is so important. Little by little, it seems that we are transforming the scenario in which the sector operates in a very positive way. 

Today we regularly have important discussions on how to transform the fuel sector for the better, and on how to change legislation that is often 40, 50 or 60 years old and was created with the aim of protecting fossil fuels or unique decarbonization paths. Participation in these discussions is essential to understand how we can adapt the legislation in line with the goals that we have as a society in the coming decades. Therefore, the waste bioenergy sector lives in a more favorable context, but is still undergoing transformation.

I remember that in 2019 we had a target for renewables in transport of 7%. Right now, we're at 11%. Anyone who understands the sector knows that it is a world of difference. There were companies that were on the verge of bankruptcy, despite doing everything possible to ensure that mobility decarbonized with added value for the country. The truth is that today these companies are much stronger, and are structuring themselves so they can invest and grow. 

There were no announcements of new investments for a long time, and today the picture is totally different. We began to realize that there are more ways of decarbonization apart from electric mobility, and also now understand that there is added value for Portugal through the companies that operate in this sector, as well as all those that depend totally or partially by it. I firmly believe that we are on the right track towards a successful path for the next 10 to 20 years.

Q. In which aspects did ABA support the recovery and growth of associated companies – a number that has grown over the years – which, in 2019, were on the verge of bankruptcy?

ABA is more of an actor in this teamwork, but it is an association that was needed to represent and support the industry and the various players that operate in this sector every day. It plays an important role in ensuring that all the work the sector does is more visible, more understood, and more cherished, dealing with any struggles along the way.

The truth is that when we are not involved in policy discussions and development, we tend to find problems in almost everything. Companies often felt that it was the fault of legislator X or politician Y, competitor Z or another association that they could not operate optimally. Today, our 15 member companies are called upon to actively participate in building something better for the sector. And so, everything can actually be better.

I believe that in the coming years the number of members will continue to grow. We continue to be a diverse association, willing to welcome different point of views that are complementary and well-founded, and that are supporting a common objective.

We also see several companies that are increasingly looking at this sector and what they can do in it - success stories being built, more positive developments, more available information - and, most importantly a tendency for more investments towards the sector.

We see expressions of interest in all emerging markets of the green fuels sector: pyrolysis fuels, synthetic fuels, electro fuels, etc. There are multiple ways to create more cohesion to the energy transition, and all technologies rely on the same aim: harnessing waste and green electricity to build complex molecules full of energy, direct and large-scale substitutes for petroleum products. It's a winning formula for everyone. And with our support, it will continue to accelerate.

Q. ABA believes that a diverse energy mix is ​​a more effective and immediate response to decarbonization efforts. Does the report ABA recently released showcase this evidence of growth? 

Yes, our reports have shown that the production system we have in Portugal is working with increasing technologies to process more waste, and to produce more green fuels and thus replace more oil. That's good news, but it's just the first step of what we can do. We believe that, even more than converting the existing system in place, we managed to bring in new factories, new technologies and, therefore, additional growth. There is still a lot of oil to remove from the system, and for that we will need a lot of investment and a lot of new factories.

In the domestic biodiesel market, we are producing more and more fuel from residual raw materials, often difficult to process feedstocks from diverse origins, and that is very positive. It now remains for more factories to be able to convert those novel feedstocks, since some of them are still tied to the practices of the past. There is still a lot to do. The numbers show a positive trend, but I believe that the important impact would be to see an increasingly interesting number of initiatives that break preconceived ideas we had so far: “You cannot mix more than 7% of biodiesel in diesel” or that “you can't put too much ethanol in gasoline”, which are ideas that are factually wrong and that were holding this industry back. 

Q. Do you feel that the issue of prejudices and myths that have been created end up being one of the biggest challenges in the sector? What does Portugal need to achieve higher rates of incorporation of biofuels, as already seen in several European countries?

I believe that the myths that have been created are partly our fault. We weren't actively explaining what we were doing and therefore we were letting these myths, which favored the status quo, persist. By participating more in the public debate, by showing who we are, by appearing on news, in the newspapers, and by making reports that show how this industry benefits society, we are step by step demystifying the various preconceived ideas and building upon the reality that this sector can bring much more to the Portuguese economy.

Changing mindsets takes a long time, however, I think we've taken very concrete steps in recent years. We spoke to environmental NGOs who, not realizing what we were doing, called us criminals. Today they are great supporters of the causes we defend and work directly with us. We talked to inspectors and they thought we were all simple opportunists looking only in the short term. Now they understand that a lot of cutting-edge work is being done in this sector, with advanced technology and solutions that are used as benchmarks worldwide. So I think now we're doing what we're supposed to do. 

It is no coincidence that our industry represents more than 90% of the CO2 reduction in mobility in recent years in Portugal. But at the same time all the media attention falls on electric mobility, which represents 1%. This is because the discourse of electric mobility has been very strong - a discourse that has been constructed over the last 20 or 30 years, by many actors, all of them with the aim of transmitting a common message and, therefore, occupying the media space. And partly it's a good thing, because it's a solution to be developed. However, and I hope I didn’t need to explain this, but this is just the tip of the iceberg, and that there is much more to do in parallel.

The decarbonization of the economy and the decarbonization of mobility, which is our outmost priority, is a much more complex issue than sometimes presented to the media. The wider public craves for immediate and easy solutions but sometimes that is simply not possible. I think the work is urgent but it is also long, done on many fronts in parallel, and done step by step with concrete measures and actions taken every day, and duly communicated. 

Q. Do you believe that this is somehow also your mission? Basically, to educate, to be closer to consumers, producers, the decision-making bodies themselves?

Yes, certainly. If we want to defend our sector and defend the best ways to decarbonize transport, we need to inform the wider public and help build these solutions and narratives. I think that's what ABA is responsible for doing, as well as creating as much harmony and cooperation as possible within the industry. Together, I think we've managed to do very interesting and impactful things - and in the last three years this has been possible to notice. 

‍Q. What opportunities exist for this relatively young sector, and how does ABA fit into this vision?

As long as there is 1L of oil in national mobility, there is an opportunity for ABA. As long as there is 1KG of waste with a lot of energy that could be used to bring ‘greener’ mobility, there is opportunity for ABA. And while other agents willing to develop this sector and bring interesting solutions that make Portugal competitive in this area also exist, i.e. in production, adding value to the Portuguese economy and eventually even exporting, there is an opportunity for development for ABA. As long as these three parameters exist (and there are still plenty of them!), we have work to do.

Q. In addition to the issue of biofuels – as the association's name implies – you address Bioenergy. Will this be a next step? The focus has been on mobility, but how can bioenergy production lead to other types of consumption?

The world of energy is a very big world and within that world there are many sectors for which there are interesting solutions that are being developed.

In mobility, there is a great need to do much more than what we have done in recent times. There are many case studies of interest around the world, in which entire countries have managed to scale up more solutions for their economy, and this is something we can replicate or even improve. I  can give 3 examples:

1) Biofuels: There are spectacular cases in Brazil with a light fleet 100% flexible between gasoline (which has 27% ethanol) and ethanol, or with a heavy fleet that consumes B14, or cases like California, Indonesia and several others in which diesel is already a mixture of 20% biodiesel and 80% diesel. We also see cases such as those in the Nordic countries, where it is already rare for a gas station not to have at least 100% green fuel compatible with traditional vehicles. Or finally Germany or Sweden, where dozens of synthetic fuel factories are opening. These are all excellent cases, which prove to us that we can do much more.

2) Biogas: When we see that thousands of units of renewable gases work daily in markets like the French or Dutch, contributing to the decarbonization of their industries and their gas (examples even come from China: there are now more than 100,000 factories of biogas in operation), we see that there is a lot of potential for evolution in Portugal also in this respect. And that is also part of advanced bioenergy: producing complex molecules, very dense in energy, with advanced technology, turning problems into sources of value, and decarbonizing energy production through the circular economy. And it is because of this that the national strategy should aim for renewable gases, and not just for hydrogen. If we don't say it, and if we don't develop it, the tendency will again be simplification and excessive focus on a single solution, which in many cases may not be the best.

3) Green fuels: Within bioenergy we are increasingly looking at all green fuels, apart from biodiesel. These include waste pyrolysis, synthetic fuels, electrofuels and hydrogenated fuels (HVO). All these technologies are in the industrial scale-up phase around the world, with some countries more advanced than others: in the Nordic countries already more than 15% of mobility is green because it is powered by HVO produced from waste from the paper industry, for example. If we are working on a single solution, once again, we will miss opportunities for the country's development and for accelerating the energy transition. And I don't think that's going to happen. In the last year alone, we have seen more than 10 expressions of interest for the installation of factories for these advanced green fuels in Portugal.

Q. What ambitions does ABA plan to work on in the coming years? Are there already concrete measures and actions? 

As long as those three challenges are on the table we have work to do. In our most immediate plans, we have several ambitions under construction and in preparation. Among them, we can highlight a strategy for renewable gases in which we want to participate, a European directive on renewables (RED-II) that has to be transposed into national legislation and in which we want to play an active role, some changes to concrete laws that are blocking the development of this sector and which we want to help adjust, as well as initiatives at the level of DGAV and the Portuguese Environment Agency. 

We have many fronts where we believe that, by contributing positively, once again, we can help to build a more favorable framework. At the same time as we do this, we want to give more visibility to this entire industry that is growing, as well as to explain to the Portuguese society that this wave of green fuels can work together, helping us to be as energy independent as possible from hydrocarbons within 10 years and be less reliant on political blocs. 

Russia reminded us why geopolitics is important. It is now easy to understand why it is important to have energy independence. It is as evident as it will ever be: as long as Portugal is able to value its endogenous resources and waste, it will reduce its carbon footprint, build value and have a more independent and resilient economy. I am convinced that the country and the world needs it.

‍Q. What should we expect from RED II? 

When looking at the packages of the European Renewables Directives (the RED-I, II and III), there are 3 lessons to be drawn. The first is that if we want to get very far and fast, we must do many things at once. 

The second is that, looking at the execution of RED I, Portugal turned out to be a great success. We managed to reach the target of 10% renewable in transport within the expected timeframe, with a very interesting reduction in our carbon footprint and making use of much more waste, such as used cooking oil, than the average for European countries. All this green fuel is produced in Portugal, and with almost imperceptible extra costs for the consumer. It was undoubtedly a great success, but it had many ups and downs. The legislative evolution between 2018 and 2019, which was catastrophic (we were one of the few countries to ever lower a target for renewables in transport), is a proof of this. But in the end, we got there.

Now we are still working within the framework of RED I, because RED II in transport is still being transposed, but we are already undergoing strong changes. There are many details to be taken care of to ensure that the transposition of RED II is done in a positive and constructive way, minimizing the risk as much as possible. It is today that the foundations for success in the next 10 years are defined. 

While we are actively preparing to work under this public debate in the best way possible, we are already working on RED III in Europe, which will bring even more ambition to be implemented by 2030.  We are actively working directly with the European Commission and with agents from several other European institutions, to help make RED III the basis for a much more ambitious renewables target and at the same time a realistic one, with economic and environmental value and controlled costs. 

Having built the ABA 2025 vision two years ago helped a lot, as it allowed us to analyze what we thought the industry could aspire to achieve at that time. This was the perfect foundation to help build RED III precisely with the goal of doing more. 

At the same time, in Europe, we are active supporting the construction of several other legislative packages: for example, the Fuels Quality Directive, the ReFuelEU and a set of other regulations that are very important for the future of this sector. It is common in European legislation that some objectives overlap, and it is necessary to fight so that everything ends up working in harmony and bringing the desired results. 

The third and final lesson resulting from our work is connecting Europe with Portugal. We see many things from RED I, the FDQ or other legislative packages that Portugal encountered obstacles in transposing into national law. Some of these measures were not in line with national legislation and this could easily end up producing contrary effects. Helping to improve this connection between Europe and Portugal, and alerting the inconsistencies and adjustments that need to be made, is critical to further develop this sector. 

All this, if done well, takes a lot of work and takes a long time. But we are 3 years closer today than we were when we started. And the good thing about working to defend a sector that builds a better world is this: just as the present is better than the past, the future is even more promising.

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