Governments around the world need to urgently address this year’s 11.6% drop in biofuel output, caused by the pandemic, in order to meet transport’s decarbonisation goals, the head of the renewable energy division at the International Energy Agency (IEA) told EURACTIV in an interview.
Paolo Frankl said the IEA has already highlighted the need for policymakers to pay attention to the bio energy sector. “What the BioFuture platform now says more explicitly is that there is an immediate need to implement the five principles for recovery that the platform published back in August in order to support the biofuel sector,” he said.
The reasons behind this biofuel fall, according to the report, is the lower demand due to the pandemic as well as lower oil prices that hit some markets hard, like ethanol in Brazil.
A rebound is expected in 2021 but even this could be jeopardised due to the second lockdown imposed in many countries. “If cash flow problems continue, less robust companies will be at risk of survival,” Frankl warned, adding that the bank sector also has a role to play in helping the biofuel sector survive and therefore decarbonise transport.
BioFuture platform’s five principles include granting temporary economic relief to less robust companies, not reducing the ambition of targets, reviewing the fossil fuel subsidy agenda, putting environmental conditions to bailouts especially in the aviation sector, and rewarding sustainability.
“In the end, what really matters is to have real sustainability and continue to design and implement policies that have this as a real concrete outcome,” Frankl said.
All options are needed
Referring to transport’s electrification by 2030, he said that IEA is, of course, supportive of electric vehicles but that it is only one component of transport’s decarbonisation and all sustainable options will be needed.
“We are in favour of electric vehicles. But we don’t think that this is the only solution,” he said.
Frankl stressed that electric vehicles are still expensive and still need the proper infrastructure in terms of charging stations, as well as a robust power system to support it.
In order to meet transport’s goals, he said first-generation biofuels, such as bioethanol and biodiesel, will be needed to decrease the use of fossil fuels.
At the EU level, in its revised Renewable Energy Directive (RED II), the European Commission has capped first-generation biofuels at 7% by 2030, while 3.5% should be reserved for so-called second-generation or advanced biofuels.
For Frankl, putting hard lines between first- and second-generation biofuels is “not optimal” from an industry point of view and there is space for both.
“The sectors are connected, some of them have synergies […] this is something the private market and companies should decide by themselves,” he said.
“What should be rewarded anyway are the sustainability and environmental performance over the lifecycle. Full stop. This is a quite strong position of the IEA.”
Referring to advanced biofuels, he said they are at a much earlier stage of maturity and need special support even with earmarked quotas.
“There has to be a period in which these new technologies can develop. If they are successful, they need to demonstrate that costs can go down, that you have economies of scale. If they fail, they failed. We cannot pretend that all technologies work,” he explained.
“The challenge is so strong and in the time is so tight, that we really need all of these technologies,” he said, adding that the World Energy Outlook 2020 suggests that by 2030, both conventional and advanced biofuels should massively increase.
Europe’s ILUC drama
The “food vs fuel” argument and deforestation in third countries, such as Malaysia and Indonesia, were among the EU executive’s arguments to phase-out first-generation biofuels.
The industry has rejected both arguments as scientifically groundless while the Commission itself has admitted policing biofuels according to public opinion.
“Palm oil and deforestation in tropical forests is a very serious concern, but biofuels are only a relatively minor fraction of the use of palm oil. Most of it goes to the food and cosmetic industry,” Frankl said.
An EU method to measure sustainability is the so-called indirect land use change (ILUC) from biofuels. For Frankl, setting good sustainability standards needs to be the driving force but one should look at the lifecycle benefits.
“I have never been a fan of ILUC modelling. I have always said the real issue is sustainable management of land use resources, whatever uses you make, and trying to model this with sophisticated computers is something that we leave very happily to universities.”
“But in terms of policies, the approach should be the other way around, looking at the land resource and making sure that that one is sustainable, whatever happens afterwards,” Frankl said, adding that the European debate over the issue has gone on for too long.
He said if there is a real radical problem of feedstocks coming from tropical areas, it is better to put a ban rather than make sophisticated calculations.
“We are working closely with Indonesia to look at different ways how they can increase their biodiesel mandate, but without affecting the sustainability of the resource. So, the problem is complex, but I think it needs to be solved with strict standards, well-defined, transparent, and increasing ambition over time.”
Regarding ethanol, he said the energy technology perspective graphs show that its contribution even in 2050 is still there.
He defended imports of sustainable ethanol, such as sugarcane ethanol, which he said has very high lifecycle emission gains with respect to gasoline.
“It is an important part of decarbonisation and fuel demand in Europe as well. And this is how it should be.”
The more these biofuels production expand, he added, the more difficult the sustainability of the overall feedstock becomes and, at this point, the more waste-based feedstocks should step in.
“But at least for this decade, there is an expansion, then there will be flattening, but in our very long-term scenarios, ethanol from first generation is still there,” he concluded.
[Edited by Zoran Radosavljevic]