Alternative fuels are essential to delivering the Green Deal

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Stakeholder Opinion

One of the toughest challenges facing the EU Green Deal is the need to decarbonise road transport, which despite much effort is still far too reliant on conventional petroleum-based fuels. [Shutterstock/Mopic]

Decarbonising road transport requires making the most of low-carbon solutions that work in the vehicles Europeans continue to rely on. In a new joint position paper, a coalition of EU alternative fuels producers and suppliers offers a way to turn failure into success when it comes to reducing transport emissions.

The coalition includes UPEI (Europe’s independent fuel suppliers), Liquid Gas Europe (the European LPG association), ePURE (the European renewable ethanol association), and EBB (the European Biodiesel Board).

One of the toughest challenges facing the EU Green Deal is the need to decarbonise road transport, which despite much effort is still far too reliant on conventional petroleum-based fuels.

Europe can’t just snap its fingers and make every car on the road a zero-emission vehicle. To have any chance of turning its emissions-reduction ambitions into reality, the EU needs to make better use of cost-effective, easily implemented, low-carbon solutions in the cars Europeans are driving now and will be driving for many years to come.

Fortunately, the EU has those solutions at hand and can leverage them with some key policy shifts to promote the uptake of alternative and renewable gaseous and liquid fuels with lower GHG intensity. These fuels represent a unique opportunity to reduce the GHG footprint of both new and existing vehicles.

The situation is quite urgent. Transport represents almost a quarter of Europe’s greenhouse gas (GHG) emissions, with road transport accounting for more than 70% of this share – and it also has a major impact on air pollution in urban areas.

Driven by a growing demand in mobility and freight, and despite improvements in the efficiency of engines, the sector has not seen the decline in emissions other sectors have experienced.

Transport decarbonisation policy should be about more than just urging Europeans to buy new cars with lower emissions – especially during a time of economic recession when new car sales are forecasted to drop by 25%. Europe will need to deploy other measures to ensure a just social transition towards the overall goal of carbon neutrality and clean air.

The vast majority of the 313 million vehicles already on EU roads run on petrol and diesel. According to statistics from the European automotive industry association ACEA, 97% of new car sales in 2019 were vehicles with internal combustion engines (ICE) – cars that will stay on the road beyond 2030.

In fact, the EU’s impact assessment of the Climate Target Plan projected that ICE vehicles would still account for 80% of the EU auto fleet in 2030. That means Europe needs to do a better job of promoting solutions that will lower emissions from those cars, such as encouraging LPG retrofit programmes or promoting higher blends of biofuels.

The increased ambitions of the European Green Deal, including the 2030 Climate Target Plan, make it even more crucial to act now to reduce road transport emissions and relieve the EU’s reliance on imported conventional petroleum-based fuels.

The EU should not dismiss solutions with a proven track record of availability, efficiency, and cost-effectiveness, and should work on a stable and technology-neutral framework.

We believe that a range of different mechanisms and options for decarbonisation will need to be deployed in parallel to ensure that everyone from all social and economic backgrounds can access better fuels and contribute to environmental goals.

Key policy considerations include:

CO2 standards for passenger cars, light and heavy-duty vehicles provide a strong signal for the uptake of so-called low and zero-emission vehicles, but the approach is skewed. Current performance standards focus only on the combustion performance of fuel and rely solely on the tailpipe emissions, thus creating unfair competition between powertrain technologies. Assessing the GHG intensity of fuels on a Well-to-Wheel (WTW) basis would incentivise the vehicles that can accept carbon-saving alternatives and higher renewable fuel blends while ensuring a level-playing field across all technologies.

Fair taxation could increase the competitiveness of low-carbon alternative and renewable fuels. A taxation scheme prioritising the environmental performance of fuels rather than the outdated volume-based approach would drive down prices and offer consumers both greener and cheaper alternatives. All energy products used as propellant should be rewarded based on a WTW assessment of their environmental footprint, including electricity. Further, sustainable biofuels and renewable gases, such as bioLPG, which is capable of 80% CO2 emission reductions compared to conventional LPG, should be exempt from minimum rates.

Consistency between the EU Fuel Quality Directive (FQD) and Renewable Energy Directive (RED) is of the utmost importance. The two Directives should have harmonised targets and consider the same obligated parties.

The EU FQD should further foster the uptake of low-carbon fuels. The FQD is a suitable tool to decarbonise fuels as it is based on a WTW technology neutral approach, and it could deliver more post-2020 provided that incentives are in place and that barriers for the roll-out of higher blends are removed, considering European ethanol saves average 72% GHG emissions compared to petrol, and biodiesel results in a significant reduction in the range of 50 to 90% compared to diesel.

The EU RED II should offer the right level of support needed by all renewable fuels.  According to the Impact Assessment of the 2030 Climate Target Plan, advanced biofuels will become the second most important source of renewables in transport by 2030. Yet these projections and the investment environment do not match the level of ambitions of RED II. Ensuring investor confidence is the key to a safe and speedy deployment of advanced technologies. The existing targets and subtargets should be maintained and only revised upwards and be matched by financial support for innovative pathways. Moreover, the current cap on crop-based biofuels should be reassessed and revised upwards now that ILUC concerns have been fully addressed in the Delegated Act on high ILUC-risk biofuels. Ensuring an adequate level of support to sustainable crop-based biofuels producers is key to enable a proper development of Annex IX-A biofuels and other waste-based biofuels. A new comprehensive terminology of all renewable gaseous and liquid fuels is needed to ensure consistency and create a level playing field.

The European Commission should maintain the current definition of alternative fuels in the upcoming review of the Alternative Fuels Infrastructure Directive (AFID). While not all alternative fuels as defined by AFID are within the scope of infrastructure deployment, these fuels remain cleaner alternatives to conventional petroleum-based fuels, and should maintain this position to ensure the right market signal of continued support and private investments. Especially given that some of these fuels will be instrumental in addressing emissions from the existing fleet.

Alternative fuels infrastructures need to be deployed at a faster pace and include all options. The number of charging points and re-fuelling stations will need to be significantly ramped up, while recognising the benefits of repurposing the existing infrastructure to deliver low and carbon neutral fuels. The deployment of infrastructures which require minimum investment such as the high biofuel blends (E85, ED95, B30, B100) and LPG should be enabled. The role of alternative and renewable fuels should also be acknowledged in all segments of transport without pre-empting the allocation of certain energies to specific segments.

The right incentives should support the uptake of alternatively-fuelled vehicles by fostering demand. Low and zero-emissions technologies need to be affordable, convenient, and commercially viable for consumers and transport operators to adopt them. Alternative and renewable fuels offer the abovementioned criteria, and should be fully supported to immediately reduce emissions from road transport.

Our industries are committed to working with EU policymakers to ensure that all existing alternative fuels contribute to the decarbonisation of EU road transport. We believe we can help deliver an ambitious EU Sustainable and Smart Mobility Strategy.

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