|
|
|
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 mandates by 2020, 10 percent of all fuels used for transportation in the European Union (EU) are biofuels.[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]
[xv] CAP is an integrated system of measures which works by maintaining commodity price levels within the EU and by subsidising production.
|
| Web Capture last updated at 9/19/2007 10:05 AM | |
|
|
|
|
|
|
State Spotlight: Vermont
Vermont is taking a multi-faceted approach toward promoting the production and consumption of energy from biomass. The state government has created incentives, and several non-governmental organizations have developed educational outreach campaigns to help Vermont's biomass sector continue to grow. In addition, legislation to promote biomass has been passed in the state legislature and new legislation is proposed. Biomass energy supplies approximately 6 percent of Vermont's energy. Exhibit 1 illustrates Vermont’s energy portfolio.
Exhibit 1
Source: Energy Information Administration,[i]
The supply side of biomass in Vermont has been active for many years. One of the first publicly owned utility biomass generators was the McNeil Generating Station, operated by the Burlington Electric Department, in Burlington, VT, which began converting biomass into power in 1984.[v] The generating station was also the site of the Vermont Gasification Project which became operational in 1999. The Project utilized the SilvaGasTM process, which converts biomass into a gas that is substitutable for natural gas.[vi] Project partners included FERCO, U.S. Department of Energy, Burlington Electric, Batelle and the National Renewable Energy Laboratory.[vii]
The Vermont Biodiesel Project currently provides education and outreach on biodiesel products, with a goal to develop a demonstration-scale biomass refinery pilot project. The Vermont Biodiesel Project is the result of a partnership between the Vermont Biofuels Association, the Vermont Fuel Dealers Association, the Vermont Sustainable Jobs Fund, and the Vermont Department of Public Service. The Project is operating under the economic assumption that if demand can be created for biofuels, the market will respond and encourage their production. [viii]
Market demand is being generated in Vermont from several angles. Green Mountain Coffee Roasters Inc. is planning on converting its fleet to B20 in the near future.[ix] There are currently 14 retail biodiesel fueling stations and 12 wholesale delivery locations to service the demand in Vermont.[x]
The Biomass Energy Resource Center (BERC) is a think-tank advocacy group that works to educate and reach out to partners in schools, businesses, utilities, and government agencies regarding the installation of systems that utilize biomass fuel. The current amount of feedstock resources in Vermont is not precisely known and although measures were taken in 2005, organizations like BERC are stepping up to update these numbers to allow more precise calculation of the production potential.
According to BERC, Vermont has an estimated 20 million tons of underutilized wood in that could be harvested annually, of which 1.5 million tons would be of insufficient quality to use in the construction of goods.[xi] Exhibit 2 illustrates that forest residue is the largest provider of Vermont’s biomass energy, at 498,000 dry tons annually. An increase of at least 1 million tons of forest residue feedstock per year could more than double Vermont’s biomass potential. BERC is slated to receive $496,000 for renewables from DOE to continue its work in renewables research and outreach programs.[xii]
Exhibit 2
Source: National Renewable Energy Laboratory.[xiii]
As part of increased efforts to promote renewables, Vermont state legislature has passed two new acts. H.405, which has been passed by both the House and the Senate, has declared that, “$1,395,529 shall be used to fund purchase of biomass heating systems pursuant to 16 V.S.A. § 3448(a)(3)(B). These funds shall be prorated among those projects completed prior to April 1, 2007.”[xiv] Additionally, H.520, which has been passed by the House but not the Senate, contains language which states, “It is a goal of the state, by the year 2025, to produce 25 percent of the energy consumed within the state through the use of renewable energy sources, particularly from Vermont’s farms and forests.”[xv] Several other pieces of legislation have been proposed and are still pending.
[vii] FERCO Enterprises Website. Fact sheet on the Vermont Gasification Project. http://www.fercoenterprises.com/proj-vgp.htm
|
| Web Capture last updated at 9/19/2007 10:09 AM | |
|
|
|
|
| Bill # |
Sponsor |
Description |
Last Action |
|
| H.R.2773 |
Rep. Lampson, Nick [TX-22] |
To enhance research, development, demonstration, and commercial application of biofuels related technologies, and for other purposes. |
8/3/2007: Placed on the Union Calendar, Calendar No. 189. |
| H.R.3435 |
Rep Pickering, Charles W. "Chip" [MS-3] |
Security and Fuel Efficiency Energy Act of 2007. To improve energy security of the United States through a reduction in the oil intensity of the economy of the United States and expansion of secure oil supplies, to be achieved by increasing the availability of alternative fuel sources, fostering responsible oil exploration and production, and improving international arrangements to secure the global oil supply, and for other purposes. |
8/3/2007: Referred to House Committee. Status: Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Science and Technology, Natural Resources, Armed Services, Foreign Affairs, and Intelligence |
|
| Web Capture last updated at 9/19/2007 10:05 AM | |
|
|
|
|
|
|
|
|
Stakeholders Battle Over Stringency Of CARB Diesel Truck Rule
Date: 9/07/07
A draft California state air board rule to cut diesel pollution from thousands of highway diesel trucks is drawing concerns from environmentalists, who argue the plan fails to require use of the cleanest engines expected to be introduced in the coming years. Meanwhile, the trucking industry argues that the rule’s requirements to phase out older trucks in favor of 2004 or later-model engines, and to seek greenhouse gas (GHG) emission reductions, are likely too stringent and infeasible.
Source: Energy Washington
Biomass Roadmap released for North Carolina
Date: 9/11/07
The North Carolina Biomass Council has released a Biomass Roadmap for North Carolina that it developed at the request of the North Carolina State Energy Office as a tool to assist stakeholders in planning the state's future biomass utilization.
Source: EP Overviews
MinnErgy Joins List of Developers Looking to Build Ethanol Plants in Minnesota, an Industrial Info News Alert
Date: 9/11/07
Researched by Industrial Info Resources (Sugar Land, Texas) -- Investor-owned ethanol start-up MinnErgy LLC recently joined a growing list of developers looking to build fuel ethanol plants in Minnesota by applying for permits with the Minnesota Pollution Control Agency and filing documents with the Securities and Exchange Commission to open the project up to more local investors.
Link: http://biz.yahoo.com/iw/070911/0300343.html
Southeast Asia Gears up for Palm Oil Boom
Date: 9/11/07
Southeast Asian nations are gearing up for a palm oil boom as interest in biofuels soars, but activists warn the crop may not satisfy a global thirst for energy that is both clean and green.
Link: http://news.yahoo.com
|
| Web Capture last updated at 9/19/2007 10:05 AM | |
|
|
|
|
|
|
|
|
Marketplace provides data relevant to the production of biofuels from biomass as well as the state of the petroleum markets in which biofuels are used. Cost fluctuations in the price of a bushel of soybeans, the main biodiesel feedstock, and corn, affect the finished products i.e., biofuels. Key indicators in the petroleum industry provide a snapshot of the supply of finished products stocks and production, and how they relate to demand and the price of finished product (i.e. gasoline and diesel). The tables show actual grain prices, indicators which may affect gasoline prices, and the production of ethanol. |
| Grain Prices Received by Farmers |
August 2007 |
August 2006 |
% Change |
24 Months |
| Corn ($/bushel) |
3.17 |
2.09 |
52% |
 |
| Soybean ($/bushel) |
7.49 |
5.23 |
43% |
 | |
| Spot Prices W. Tex. Int Cush & Henry Hub |
August 2007 |
August 2006 |
% Change |
24 Months |
| W. Tex. Int Cush ($/Bbl) |
72.36 |
73.04 |
-1% |
 |
| Henry Hub ($ per MM/Btu) |
6.17 |
6.99 |
-12% |
 | |
| Fuel Supply |
August 2007 |
August 2006 |
% Change |
24 Months |
| Percent Refinery Utilization |
91.76 |
91.88 |
0% |
 |
| Production by Product - Finished Motor Gasoline (1,000 bbl/d) |
9,244 |
9,163 |
1% |
 |
| Stocks - Finished Motor Gasoline (1,000 bbl) |
108,214 |
115,824 |
-7% |
 |
| Imports - Total Motor Gasoline (1,000 bbl/d) |
1,221 |
1,244 |
-2% |
 | |
| Oxygenate Production |
June 2007 |
June 2006 |
% Change |
24 Months |
Ethanol Production
(1,000 bbl) |
12,553 |
9,532 |
32% |
 |
MTBE Production
(1,000 bbl) |
1,694 |
3,022 |
-34% |
 |
Data Sources:
U.S. DOE-Energy Information Administration, "Weekly Petroleum Status Report" and "Monthly Oxygenate Report"; USDA-National Agricultural Statistics Service, "Agricultural Prices","Grain Stocks"; Wall Street Journal, Markets Data, Spot Prices, Oil Prices | |
| Web Capture last updated at 9/19/2007 10:05 AM | |
|
|
|
|
|
|
|
Title: |
Wärtsilä BioEnergy Plant For Haapajärvi |
|
Description: |
| | | | | | | |