20 June 2022
This blogpost series by the European Liberal Forum engages with policymakers, industry experts and academics to contribute to a better understanding of how to shape the “Road to net-zero” in the context of the EU sustainable transition.
By Leonidas Kanonis, Director for Communications & Analysis at the European Waste-based & Advanced Biofuels Association (EWABA)
The European vision towards a “net zero” future by mid-century is preceded by the EU’s goal of reducing net greenhouse gas (GHG) emissions by 55% by 2030, compared to 1990 levels.
The Fit-for-55 package is indeed an ambitious step in the right direction. But the complexity and interconnection of the legislative files make success very challenging.
Decarbonising the European economy can have broad economic benefits, including GDP growth, employment growth, energy security and reduced energy costs for households and businesses. But the transition should be done in a sustainable and cost-optimal way.
To become a renewable energy super house, the EU must first tackle the most imminent climate issues it is currently facing. When it comes to transport, road is still the most significant emitter amongst sub-sectors, and emissions are still rising today. Electrification will become the norm but until it penetrates our electricity grid at full-scale, available low-carbon sustainable solutions like waste-based biodiesel should be used extensively today to slash GHG emissions.
Following the European Commission’s proposals for the Fit-for-55 package, it is evident that one of the EU’s core principles is under threat.
Sustainable and cost-efficient solutions are much needed for transportation to reach the “net zero” goal. To that end, a separate aviation blending mandate for sustainable aviation fuels (SAF), promoted by the Commission, is fundamentally flawed and risks impacting the concept of technology neutrality, which has been endowed by the EU to promote all technologies through a neutral and fair approach. The SAF proposal relies too heavily on waste feedstocks (from both parts A and B of Annex IX of the Renewable Energy Directive, REDII), even though those feedstocks have been used more efficiently, cheaply, and sustainably in road and maritime transportation for close to 15 years already.
Over the past years, the legislator has diverted significant investments from traditional crop-based biofuels towards large-scale waste-based biofuels production, in a shift to promote circularity and improve waste management. Waste-based biodiesel achieves GHG emissions savings of up to 90% compared with fossil diesel (the highest record under Annex V of the REDII) and has provided significant emission reduction for road transport. In 2021 alone, members of the European Waste-based & Advanced Biofuels Association (EWABA) produced over 2 million tons of waste-derived biodiesel, leading to around 6.3 million tons less CO2 emissions compared to fossil diesel.
Despite its significant contribution to climate mitigation efforts, the Commission’s REDIII proposal: i) eliminates the double counting mechanism for waste-based biofuels, a strong incentive to promote the use of waste-based biodiesel for road uses and ii) introduces a ‘hard’ 1.7% limitation to the contribution of biofuels from part B Annex IX feedstocks of the REDII.
Yet at the same time, waste lipids for aviation are being over-supported via an unrestrictive promotion mechanism, the proposed ReFuelEU blending mandate. Therefore, different sustainability criteria apply to different EU transport sectors. This would lead to significant additional GHG emissions, and hamper attaining relevant EU targets in the REDII, FQD and EU Hydrogen Strategy.
Quite importantly, the ReFuelEU proposal put forward a usage obligation that breaks the principle of technology neutrality and eliminates the level playing field between renewable liquid fuel technologies supplying the road, aviation, and maritime sectors.
Waste feedstocks should be equally promoted through the same multiple counting in the road, aviation and maritime sectors, respecting the principle of technology neutrality and protecting a European industry with +50 production facilities, mostly SMEs, evenly distributed across the EU and supporting an extended supply chain comprising +25.000 jobs.
Breaking the technology principle is regrettable. But doing so to promote technologies that exacerbate climate mitigation efforts of the worst GHG emitter in transport is a policy that should be reconsidered. Waste lipids being used in aviation instead of road and maritime will in fact increase GHG emissions for the transport sector as a whole.
Under the current aviation proposal, the legislator knowingly chooses to divert waste feedstocks used for road and maritime towards the Hydroprocessed Esters and Fatty Acids (HEFA) technology that is more energy intensive, costly, requires more feedstocks to produce less fuel and achieves less GHG emissions savings in comparison. This at a time when large-scale waste-based biodiesel production facilities are expected to come into operation this year with the aim of slashing GHG emissions further for cars, trucks and ships.
Following the Commission’s logic, 1 million tons of additional GHG emissions could be released in the atmosphere already in 2025, and for every year thereafter, with this figure rising by 2030. Aviation is expected to reduce its sectoral emissions by substituting fossil kerosene with bio-derived fuels, but the whole EU transport emissions would suffer as a consequence.
Supporters of HEFA, one of the several different pathways to produce SAF, will defend this mature technology indicating that aviation lacks alternatives while road is on its way to electrify. But does this fully reflect the reality?
Electromobility holds a promising future for the light-duty vehicle sector indeed. But even the passenger vehicle sector will need time to fully electrify. The International Energy Agency (IEA) has estimated that e-mobility would account for 230 million cars by 2030. Still, under this optimistic scenario, IEA forecasts this to represent fewer than 12% of all vehicles on the planet. But even this low figure would require no less than 140 million home EV chargers, for transportation alone. In addition, electrification is extremely difficult to fully penetrate the heavy-duty vehicle and maritime sectors, while waste-based biodiesel is the most sustainable and cost-efficient fuel to reduce emissions towards the 2030 objectives.
To sustainably decarbonize aviation in the medium to long-term, promising and scalable pathways that are not yet fully commercialized should be prioritized through promotion mechanisms over cheaper, supply-limited and already commercially available solutions like HEFA. This is a very practical approach but unfortunately policymakers avoid addressing this issue.
It can take up to 15 years for a technology to reach commercial scale following lab testing and pilot phases. This means that promoting a nascent SAF pathway today will take a significant amount of time to achieve the desired results for Europe’s climate aviation objectives.
Now, in which circumstances would an investor choose to put their money towards a novel and expensive technology, which receives no direct promotion, instead of one that is commercially available, cheaper and supported by the EU?
Leonidas Kanonis is the Director for Communications and Analysis at the European Waste-based & Advanced Biofuels Association (EWABA) since January 2021. Leonidas has acquired extensive experience on the biofuels industry after his stint at Argus Media for the past 3,5 years, where he became deputy editor for the biofuels desk after covering the market for crop and waste feedstocks as a senior market reporter.
EWABA is a Brussels-based association representing the interests of the European waste-based and advanced biofuels industry before EU institutions, national governments, industry, civil society and the media. We promote the inclusion of waste-based and advanced biofuels in the EU fuel mix as a sustainable means of reducing greenhouse gas emissions in EU transport. Our +35 members active in most EU Member States collect and use waste and advanced feedstocks listed in parts A and B of Annex IX of the Renewable Energy Directive (REDII) to produce sustainable biodiesel with the highest GHG savings (up to +90%) when compared with fossil fuels, thus enabling “near-term decarbonization” of the EU road and maritime transport sectors.
DISCLAIMER: Published by the European Liberal Forum. The opinions expressed in this publication are those of the author(s) and do not necessarily represent those of the European Liberal Forum.