If Europe is serious about its climate commitments, and if Europe wants to reduce its dependence on imported oil, then we need to increase the amount of low-carbon biofuels in the energy mix, writes Peder Holk Nielsen.
Peder Holk Nielsen is President and CEO of Novozymes.
Transport is at the centre of our economy. Mobility is a prerequisite for growth.
The transport sector is also very thirsty for energy, using mainly oil to propel itself. Today, the European transport sector is 95% reliant on oil, most of which is imported from outside the EU. This is expensive. In 2014, the 28 member states spent more than €270 billion on foreign crude – the combined GDP of Bulgaria, Hungary, Slovakia, and Slovenia.
It also comes at an environmental cost. The transport sector accounts for almost one quarter of the EU’s total greenhouse gas (GHG) emissions. Road transport specifically represents 80% of all transport emissions.
Europe is reducing its emissions, but not in the transport sector where emissions have only declined since the start of the economic crisis in 2008 and may rise again with the economic recovery and low oil prices. It is broadly agreed that emissions from transport will need to fall sharply in the next decade in order to meet the EU’s agreed objective of a 60% reduction by 2050 and in order to allow the EU to reach its overall decarbonisation goals.
Policy-makers and stakeholders are aware of this reality and they are trying to act upon it. Both energy security and the decarbonisation of transport are high on the EU´s political agenda. Yet the instruments proposed so far are not commensurate with the scale of the challenge.
The EU is focusing on engine efficiency and on increasing the proportion of low-emission cars, such as electric, plug-in hybrids or fuel cells. These solutions are important, but they leave a key part of the equation unaddressed: in all scenarios – even the most optimistic ones – the majority of vehicles on the road in 2030 will have a combustion engine and run on liquid fuels, the vast majority of which will be oil-derived, unless the EU takes action. Alternative low-carbon liquid fuels such as biofuels are therefore badly needed if we are serious about addressing the transport emissions challenge.
These alternative fuels exist today. Biofuels have replaced 5% of the transport fuels across Europe, which represents nearly the totality of renewables used in transport today. Other regions are well ahead of us with 10% biofuels in the US and 27% in Brazil.
The EU has the world’s most stringent sustainability scheme for biofuels. Yet the EU has unclear policy to incentivise them so that they can realise their potential to reduce Europe’s transport emissions and oil dependency.
Five years of policy debate around ILUC (Indirect Land Use Change) has created a high level of uncertainty which paralysed investments in the sector. Now that this debate has been closed, we need to recover the time lost and adopt new policies that clearly support the uptake of the best performing biofuels, such as renewable ethanol, for which the scientific consensus keeps confirming they are sustainable.
European renewable ethanol reduces GHG emissions by 60% on average compared to gasoline. This average is improving annually. They also have a positive impact on air pollutants, allowing the European Union not to compromise between GHG emissions reduction and air quality. These benefits increase with higher ethanol petrol blends such as E20, which are already on the market in other regions of the world, like Brazil.
European renewable ethanol is produced from agricultural crops (e.g. corn, wheat, beets) that are home-grown. Nearly all the biomass for renewable ethanol used in the EU is produced in Europe and directly benefits rural areas. Since 2003, the European ethanol industry has created and sustained some 50,000 jobs. In addition, ethanol biorefineries today produce both fuels and a protein rich animal feed, which displaced nearly 10% of Europe’s soybean and soybean meal imports by volume. If promoted further, the positive impact of renewable ethanol on Europe’s climate, energy and economy will grow proportionally.
Finally, advanced biofuels based on waste and residues such as cellulosic ethanol are becoming commercially available, too, and their positive impact is significant, with an average 80 to 90% GHG reduction. They bring similar growth and jobs benefits and further reduce our dependence on oil.
These low carbon renewable fuels can be used in today’s engines and today’s fuelling infrastructure. They are the most cost effective way to mitigate the climate impact of transport based on domestic resources and innovation.
They are produced in biorefineries which mimic traditional oil refineries, but produce sustainable alternatives, not only liquid fuels, but also chemicals, materials, food and feed. These biorefineries are vital to achieving the EU’s ambition of transitioning towards a bio-based circular economy.
These low carbon fuels can effectively contribute to mitigating climate change, improving our energy security and helping move us towards a post-petroleum society. As an industry we are committed, but we cannot make it on our own. Political courage is needed to ensure low-carbon alternative fuels are increasingly part of the energy mix. The European Commission’s proposals later this year to decarbonise transport and to review its renewable policy are unique opportunities to make a difference for the EU and for the world.