European Union Increases Biofuels Targets

Seema Patel, BCS, Incorportated

 

In March 2007, the European Council[i] adopted an Energy Action Plan that aims to reduce Europe’s climate change footprint. The Action Plan mandate 10 percent of all fuels used for transportation in the European Union (EU) are biofuels by 2020.[ii] The Action Plan was based on an energy package presented by the European Commission (Commission) in the beginning of January 2007.[iii] On January 31, 2007, the Commission proposed new standards for biofuels as part of the new energy policy.

 

The standards aim to achieve:

• A reduction in EU greenhouse gas emissions of 500 million tonnes of carbon dioxide by 2020
• An improvement in the quality of transport fuels and promotion of "second generation" biofuels (second generation includes cellulosic ethanol, animal waste and other resources currently not used to produce biofuels) that will increase emission savings
• Better public health through a reduction in noxious pollutants, particularly due to lower sulphur content of diesel. [iv]

Transportation is responsible for approximately one third of all carbon dioxide emissions in the EU with road vehicles relying almost entirely on oil as a primary energy source.  The key action behind these new standards is for suppliers to reduce their greenhouse gas emissions caused by production, transport, and use of their fuels by  10 percent between 2011 and 2020, resulting in a reduction of carbon dioxide emissions by 500 million tonnes.[v] The new goal was considerably increased from the original target of 5.75-percent use of biofuels by 2010, which was set in 2003 by the Commission, an increase based on growing concerns over rising oil prices, energy security and climate change.[vi]

 

Moving from Optional to Mandatory Targets

The Commission has a history of supporting the use of biofuels. On May 8, 2003, the Commission issued Directive 2003/30/EC (Directive) to promote the use of biofuels or other renewable fuels for transport. The Directive stated that member states would ensure a minimum portion of biofuels or other alternative fuels be placed in their markets. It also set a target that biofuels would comprise  2 percent (based on energy content) of all petrol and diesel fuel by December 31, 2005, increasing to 5.75-percent by December 31, 2010.[vii]

 

The EU produced an estimated 768 million gallons of biofuel in 2004, as compared with U.S. biofuel production of 3.4 billion gallons (mostly ethanol). Biodiesel accounted for 80 percent of the EU’s biofuel production with bioethanol making up the remainder. The major feedstock for EU biodiesel production is rapeseed oil, while bioethanol is generally produced using a combination of sugar beets and wheat. Germany produced over half of the EU’s biodiesel. France and Italy are also important biodiesel producers, while Spain is the EU’s leading bioethanol producer.[viii]

 

While the Commission established the biofuels directive, it was not mandatory, allowing individual member states to establish their own standards. The result has been varying degrees of participation by the member states. Success was contingent on member state’s measures to encourage the use of biofuels through financial incentives and legal obligations.[ix] Sweden has been highly successful through the use of tax breaks in which all carbon dioxide neutral fuels are exempt from carbon and energy taxes. A range of financial incentives are also available. An example being consumers driving cars which run on biofuels in Stockholm benefit by receiving free parking and are exempt from congestion charging.[x] Additionally, strong institutional support has led to an increase in the availability of E85 at service stations throughout the country. Currently, there are approximately 800 stations retailing E85, equivalent to over 20-percent of the fuel retailing network.[xi]

 

By 2005, all but four of the 21 EU member states were using biofuels and market share reached approximately 1 percent.  This was actually double the amount from two years prior, a sign of progress, but still less than the 2 percent goal for 2005.[xii] The new standard is an attempt to make up for these missed targets and step up efforts by EU member states to achieve even more ambitious targets.  Besides the target amounts, the major difference between the old directive and the new is that the new targets would be binding on the Union as a whole, as well as on each individual member state.

 

Changes to Come

Achieving the 2020 target will mean the development of "second generation" biofuels, which are fuels made from the agricultural residues and woody plants such as straw, timber, woodchips and manure. "First generation" fuels made from vegetable oils, animal fats, and plant sugars and starches, require significant amounts of land and are less efficient than second generation fuels.[xiii]  “Second generation” fuels are expected to have lower costs, better energy output and fuel quality, and favorable greenhouse gas balance.  Additionally, using "second generation" fuels means less competition with food production.[xiv]

Modest impact assessments predict that 15-percent of arable land would be needed by 2020 for the production of biofuel, much of which would take place on “set aside” land reserved under the Common Agricultural Policy [xv], which puts a limit on production by farmers.[xvi] However, there is not enough  land available in Europe to produce sufficient amounts of fuel and feed to achieve the 2020 goal.[xvii]  Trade Commissioner Peter Mandelson said "Europe should be open to accepting that we will import a large part of our biofuel resources." "We cannot contemplate, in my view, favouring EU production of biofuels with a weak carbon performance if we can import cheaper, cleaner biofuels."[xviii]

Additionally, biotechnology will be a large contributing factor to achieving the goals set in the new standards.  Plant science combined with state-of-the-art crop protection applications will be used to increase land productivity (more biomass output per hectare) and improve crop quality (more fermentable carbohydrates and higher oil content).[xix]