Make or break for the EU biofuels sector?

By Angel Alvarez Alberdi, Secretary General, European Waste-based & Advanced Biofuels Association 

It is likely that by the end of 2022, the EU legislator (the European Parliament and the Council of the EU) will have a final political agreement on most of the recent Commission proposals overhauling the EU biofuels regulatory framework.

This is both directly (i.e. the proposed revision of the Renewable Energy Directive – RED III, and the FuelEU Maritime and ReFuelEU Aviation Regulation proposals) and indirectly (i.e. the revision of the CO2 standards for cars and vans regulation, the Energy Taxation Directive, and the revision of the Alternative Fuels Infrastructure Directive), among other important legislative files within the colossal Fit for 55 package.

If that was not enough, early this year we will also get final decisions on highly relevant outstanding secondary legislation implementing the Renewable Energy Directive currently in force (RED II), such as the implementing act on revised standards for certification schemes, the delegated act revising the feedstock lists in Annex IX of the RED II, the delegated act on co-processing methodology and the delegated act on methodology regarding electromobility accounting (regarding direct connections and grid electricity for renewable fuels of non-biological origin). To this we must add it is also expected that by the end of the year, the Commission will launch a pan-EU track and trace database for all biofuels and bioliquids.

The waste-based biodiesel industry has a clear vision as to which are the best policy outcomes to further strengthen its contribution to the decarbonisation of the EU transport sector as a whole, comprising road, rail, maritime and aviation. We set out brief remarks on the most relevant of these legislative instruments below.

When it comes to the RED III proposal, while the proposed migration to a greenhouse gas (GHG) emissions reduction system still leaves wastebased biodiesel from Annex IX part B feedstocks as the top performer of the sector, it is regrettable that no further specific promotion mechanism was included in the draft legislation. This oversight needs to be corrected by the EU legislator to ensure that difficult wastes such as used cooking oil and animal fats are still processed and refined for its use as biodiesel feedstock.

The best mechanism for this vital promotion is a specific minimum incorporation subtarget beyond the artificial draft 1.7% limitation and mirroring the effective and necessary sub-target for biofuels produced with feedstocks in part A.

The RED III proposal also includes important provisions amending the Fuel Quality Directive (FQD) – here, our industry welcomes the inclusion of a possibility to increase the biodiesel blend in existing diesel standards up to 10% (B10). However, we believe that this possibility is curtailed by the presence of a 7% (B7) protection grade that would prevent a steady migration towards B10 across EU Member States.

The reality is that the vast majority of the vehicles sold in the EU today are compatible with even higher biodiesel blends and, therefore, the EU legislator could well go beyond B10 into B30 and B100 blends, which is a cost-effective solution to decarbonise the road sector, in particular heavy-duty vehicles.

The Fuel EU Maritime proposal states that sustainable maritime fuels produced from feedstocks in Annex IX part B of RED II are ‘essential’. However, we fear that waste-based biodiesel might not be able to play its well-deserved, important role to decarbonise EU shipping if the current drafting of the ReFuelEU Aviation proposal is not improved.

ReFuelEU puts forward a sustainable aviation fuel (SAF) blending mandate that will over-rely on waste lipids from Annex IX of the RED II (both parts A and B) during the critical 2025-2030 period and beyond. This would be a very regrettable policy choice as it would divert feedstocks from a much more efficient use – waste-based and advanced biodiesel for the road and maritime sector.

This will provoke a tangible and concerning reduction of the overall GHG reductions in the EU transport sector when taken as a whole and negatively affect investments for the development of the SAF that will eventually decarbonise aviation: alcoholto-jet, ethanol-to-jet, FischerTropsch and, of course efuels.

The EU legislator should avoid these negative effects by establishing ambitious subtargets for the incorporation of efuels and non-waste lipids advanced biofuels from part A of Annex IX as from 2025 while severely limiting the contribution of Annex IX part B for SAF production and widening the potential feedstock base beyond the proposed restrictive scope in the proposal. The way in which RED III, ReFuelEU and FuelEU will determine how renewable liquid fuels will help decarbonise the different parts of the EU transport sector has to be confronted with a crucial systemic development. This is a de facto ban on sales of internal combustion engines in road light vehicles, currently proposed for 2035 in the draft revision of the regulation on CO2 standards for cars and vans.

This measure is seen by many as a bit too bold and controversial, especially given the decarbonisation potential of renewable liquid fuels. The EU legislator should tread carefully and hopefully opt for a solution that combines electrification with higher blends of sustainable liquid renewable fuels.

Our industry has been an early proponent of revised standards for certification schemes and we will welcome the stringent measures about to be finally adopted via an implementing act during Q1. We would like to see a clear new approach to mass balancing that does not negatively affect longstanding industry practices. We will equally welcome an upcoming delegated act on methodology to determine the renewable share in coprocessing fuels which is widely expected to rely on carbon testing to determine the bio fraction of coprocessed fuels, which is an old request of our industry.

Finally, we would welcome a Revision of Annex IX including additional sustainable waste lipid feedstocks to parts A and B of Annex IX. To conclude, for a sector heavily dependent on regulatory support, wrong decisions might mean major, possibly fatal losses for dozens of companies, at a great environmental cost in terms of reduced climate mitigation for the EU as a whole.

Undoubtedly, this is then yet another high stakes, hypercharged year for the industry. The waste based and advanced biodiesel industry is proud of its longstanding contribution to the EU climate mitigation policies and trusts that the final deal(s) currently being negotiated will eventually be largely positive for our industry. We will certainly collectively work hard to that end.

The original piece was published in the Biofuels International January-February 2022 magazine edition.

Find the publication at: https://en.calameo.com/read/00548484421651d3d8a7c (pages 11-12)



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