The EU’s energy commissioner, Kadri Simson, has revealed details of upcoming fuel legislation, saying a certification scheme for renewable and low-carbon fuels and gases is on the horizon.
The new scheme will be part of the revision of the renewable energy directive – the so-called ‘RED II’ – Simson announced at a Brussels event on Thursday (18 February).
“This will include a comprehensive certification for renewable and low-carbon fuels and gases. And it will come with an updated set of incentives to promote the use of these fuels in various sectors,” she said.
Those criteria are expected to be based on full life cycle greenhouse gas emission savings.
The EU’s energy taxation directive will also be revised in line with the EU’s updated climate goals for 2030, as part of a package of EU laws to be tabled in June, Simson said. That “will be relevant for various fuels” as well, she added, “as it directly affects consumers’ choices”.
The commissioner made the comments at the Tenth High level EU Refining Forum, a gathering of representatives from the oil refining industry, members of the European Parliament, European Commission staff, and others in the field.
Oil refiners called for the EU to recognise liquid fuels as a necessary part of achieving decarbonisation, saying that from a chemistry standpoint “liquid fuels are still simply the best form of energy storage”.
“Many parts of the transport system would benefit from retaining the liquid fuel but of course in a low-carbon form,” said Béla Kelemen, president of FuelsEurope, the European oil refining industry association. FuelsEurope members include major oil companies such as Shell, BP, ExxonMobil and Total.
Kelemen compared the industry’s decarbonisation drive to a “transformation where we want to be a butterfly from a caterpillar”.
Anna-Michelle Asimakopoulou, a Greek MEP from the centre-right European People’s Party (EPP) called low-carbon liquid fuels “instrumental to the EU’s transition in energy by 2050” and criticised the European Commission for putting them on the taxonomy ‘brown list’ – fuels considered to have a negative impact on the environment
“We need to consider transitional energy like natural gas and potential breakthrough technologies like low-carbon liquid fuels as part of climate solutions and not treat them as a lingering problem,” said Asimakopoulou.
“The Commission brushes off the right of member states to decide their own energy mix and to choose the most appropriate technologies to collectively achieve the 2030 climate target. This clearly limits solutions available to reduce the CO2 emissions in, for instance, the transport sector, where electric is not always technologically possible,” she added.
The European Commission and industry acknowledge that liquid fuels will primarily play a role in hard-to-decarbonise transport modes such as aviation and maritime. The EU executive aims to have the majority of light duty vehicles on European roads powered by electricity and biofuels by 2050.
John Cooper, the director general of FuelsEurope, said the industry will move towards a new business model aimed at supplying some of Europe’s transport energy needs, one that is “entirely complementary to the electrification and hydrogen strategies”.
“We still need to operate petroleum refining for some years, well beyond a decade or two, because the demand is there. 90% of new cars and trucks sold last year need liquid fuels and while we would like to scale up the renewables massively overnight, this is unrealistic,” he warned.
Cooper went on to call for “equivalent recognition for renewables in transport, with fair competition between renewable electricity, gases and liquids as energy sources”.
“When technology competes fairly, customers will decide,” he added.
Over half of all power will be provided by electricity by 2050 according to EU estimates, predicating a significant drop in the use of liquid fuels, particularly petrochemicals. The EU is targeting a rise in clean energy production to meet the demand.
Scania, the Swedish manufacturer of heavy trucks and buses, announced during the forum that they will only sell fossil-fuel free vehicles by 2040, ensuring that the majority of Scania trucks on the road are clean vehicles by 2050.
Cutting emissions by 2030
The ‘fit for 55’ package, which is due to be published in June, will include a possible extension of the EU’s carbon market to include the transport and building sectors and tighter CO2 emission standards for new passenger cars and light commercial vehicles.
Representatives of the oil refining industry sought to defend the sector’s role in transitioning Europe to carbon neutrality.
“The EU refining sector is of crucial importance to decarbonise our transport systems by delivering low and zero carbon solutions for the future, allowing affordable and sustainable mobility for all,” said Judith Kirton-Darling, IndustriAll deputy general secretary, a trade union federation.
Kirton-Darling called on the EU to deliver a “just transition for industrial workers”, expressing concern that the regulations driving changes to the industry would harm their livelihood.
“Blacklisting entire sectors within the EU taxonomy rules which were originally meant to be a non-binding instrument to steer investment, will undermine the rolling out of low-carbon technologies and processes that we urgently need,” she added.
Kirton-Darling also criticised an overreliance on the Emissions Trading Scheme, saying one size fits all policies will “inevitably increase regional inequalities within and between countries”.
[Edited by Frédéric Simon]