EU aims at oil firms on way to low-carbon future[fr][de] 

The European Commission presented new fuel-quality standards on 31 January that have far-reaching implications for the oil industry.

The new standards aim to achieve, by 2020, a 10% reduction in CO2 emissions along the whole product life-cycle, when petrol and diesel is refined, transported and used.

Overall, this should prevent some 500 million tonnes of CO2 from being released into the atmosphere or the "equivalent to the total combined emissions of Spain and Sweden today", according to the EU executive.

"This is one of the most important measures in the series of new initiatives" to fight global warming, EU Environment Commissioner Stavros Dimas said in a statement. "It is a concrete test of our political commitment to leadership on climate policy and our capacity to translate political priorities into concrete measures."

The proposed new standards will also allow increased blending with biofuels - including up to 10% ethanol - which emit less CO2 along their life-cycle. The measure, Dimas said, should "open the way for a major expansion in the use of biofuels, especially second-generation biofuels" which are made from a wide range of agricultural residues instead of just agricultural crops such as sugar cane or rapeseed.

The standards also aim to cut pollution from fuel burning with two additional measures due to take effect from 1 January 2009:

• A cut in sulphur emissions from diesel from 15 parts per million (ppm) to no more than 10 ppm. This should help cut emissions of dust particles causing lung damage, although this will come at the expense of  increased CO2 emissions from refineries as the processing needed to achieve requires more energy, and;
• reducing PAHs (Poly Aromatic Hydrocarbons) emissions from diesel by a third, which should also lead to a reduction in emissions of particulate matter.

Finally, in order to make up for the expected increase in VOC (Volatile Organic Components) pollution resulting from increased ethanol use, the Commission will put forward a proposal later in the year to introduce compulsory vapour-recovery equipment at filling stations.

Commission officials insisted that the proposed measures have to be looked at separately from a pending proposal to cut CO2 emissions from cars, which was delayed several times after heavy lobbying from the auto industry.

"We are looking at the whole life-cycle of fuels, not the tailpipe emissions," one official said at a briefing with journalists on 31 January.

But the oil industry was furious at the proposal, saying that CO2 reductions only came late in the directive's review process which started in 2005.

"The particular issue of carbon intensity only came on the agenda in November 2006," said Peter Tjan, secretary-general of Europia, the European petroleum industry association.

"The Commission always said it would go forward in combination with CO2 emissions from cars," Tjan told EurActiv, adding: "The biggest scope for CO2 reduction is in car technology."

"If the Commission is serious about its 20% greenhouse-gas reduction by 2020, it will have to do something with the car industry," Tjan said.

But this claim was rejected by ACEA, the European Automobile Manufacturers Association. "The focus of the Commission is still far too much on vehicle technology," said Communications Director Sigrid de Vries who believes it is "important that the fuel industry takes part" in reducing emissions.

De Vries dismissed claims that the measures amounted to an acceptance by the Commission of its 'integrated approach', which would see the oil industry, infrastructure managers and driver behaviour all contributing to reducing transport emissions. "This is not a victory for the car industry at all," she said.

However, according to the oil industry, lower CO2 emissions from fuels can only be met with increased biofuels blending. The EU target "will never be achievable with products in the EU, Tjan said, adding: "This is good news for Brazil".

And he is sceptical that second-generation biofuels produced in Europe will come in time to make up for the difference. "Technology breakthroughs have not come yet and will not come in the desired timeframe," he said, adding that they are "not economical and will need lots of subsidies".

"What you see here is [the Commission's] environment DG regulating what [Energy Commissioner] Piebalgs announced" on biofuels, Tjan went on. "Who are we supposed to make happy?" he asked. "This is messy, unprofessional legislation."

The proposed measures were greeted with more enthusiasm from environmental NGOs with BirdLife, the European Environment Bureau (EEB) and Transport and Environment (T&E) welcoming EU plans to introduce carbon-reduction targets for transport fuels.

However, they slammed the failure to announce a legally binding target for car fuel efficiency which they attributed to "a high-level intervention by the German car industry".

"What we are seeing is mindless scaremongering from the German car industry," said T&E director Jos Dings. "They are saying that makers of larger cars will have to close and thousands of jobs will be lost - it's absurd. The EU approach has always been that emissions should be cut across the whole fleet in order to reach an average target."

On biofuels, the NGOs welcomed the Commission's approach to favour cleaner, second-generation products.

"Until now Europe's approach to alternatives like biofuels has been to promote them regardless of whether or not they are good or bad for the environment. If it's designed right this commitment to reducing carbon emissions will ensure that only the cleanest biofuels are promoted and the production process of fossil fuels is cleaned up. That is a very good approach and we welcome it."