The proposed new RED continues the re-orientation of biofuels strategy towards advanced biofuels made from waste and away from crop derived biofuels. But how much will the new RED, as currently worded, really encourage investment in advanced biofuels?
All fuel suppliers will be mandated to include an increasing share of ‘low emission and renewable fuels’ in their transport fuels, including advanced biofuels. The minimum share increases from 1.5% in 2021 to 6.8% in 2030. Biofuels from used cooking oil and tallow (and now waste molasses) are included in the mandate, but this technology is already well established. To encourage innovation, there will be a cap on how much of the mandate they can take. Part of the mandate can be provided by a new category of fuels – ‘waste-based fossil fuels’. The definition is very broad; waste gases are mentioned but waste plastic, waste mineral oil, refinery wastes and even waste coal could comply. Electric transport also counts. So the contribution of truly advanced biofuels (including biogas), from waste wood, municipal bio waste, agricultural and forestry waste, algae etc. is whittled down to a minimum of 0.5% in 2021, rising to 3.6% in 2030.
Fuel suppliers will be able to transfer their obligation to provide ‘low emission and renewable fuels’ to others. To oversee this transfer and the increasingly fluid biofuel supply situation, each Member State will be required to set up a database, to a specification to be laid down by the Commission, to record all biofuels transactions and obligation transfers between companies and countries throughout the EU. There are also other changes which will increase the administrative complexity. For companies co-processing biomass and fossil fuels, which is a capital efficient option, rules are set out for allocating the biomass content between different fractions. There are changes to the mass balance rules. These extra administrative burdens will be a drag on the sector.
Crop based biofuels will be partially phased out over the following ten years, with a cap of 3.8% on their contribution in 2030. Unfortunately the Commission has not taken the opportunity to take certified low ILUC crop based biofuels out of the cap. Member states have the freedom to reduce the cap for different categories of crop-based biofuels. So globally higher ILUC biofuels like crop based biodiesel could be penalised with a lower, or even zero cap, leaving more room for globally lower IULC crop-based bioethanol. But relying on globally averaged ILUC figures ignores the fact that underused land brought into use to produce biofuels does not contribute to ILUC. Nor do biofuels produced hand-in-hand with yield increases. The wholesale phasing out of crop-based biofuels, ignoring that not all cause ILUC, will perpetuate the negative thinking about biofuels, which will not be good for advanced biofuels.
In conclusion, the mandate for ‘low emission and renewable fuels’ is good news on the surface. But so much of the mandate can be taken by existing waste-based biofuels, biogas, electricity, hydrogen and waste based fossil fuels; add that to the ongoing negativity towards crop-based biofuels and the extra administration, and it not clear how much advanced biofuels will actually benefit.
Published: 7 December 16
