Last summer the SFT (Sustainable Transport Forum) approved the Final Report elaborated by the Sub-Group on Advanced Biofuels, which consists of 32 industry experts representing all advanced biofuels value chains and transport sectors, such as aviation and maritime. The mandate of the Sub-Group was to develop strategies facilitating the deployment and use of advanced biofuels in the EU and thus support the accomplishment of the policy objectives of the Clean Power for Transport Strategy, the 2030 Climate and Energy Framework and Energy Union Strategy. Indeed, while European technology developers are playing the leading role as well as fuels producers, the market is still fragmented and affected by uncertainties at both EU and Member States levels. It is unquestionable that there is a concern, especially amongst small and medium size fuel suppliers that, in reality, such a single market does not exist for biofuels.
Still, these market operators feel that they have to operate in a fragmented market confronted with many different rules in a great number of Member States.
At present, transport consumes one-third of all energy used within the EU and generates one-quarter of the greenhouse gas (GHG) emissions. The GHG emissions from transport are expected to constitute a larger share of the overall EU GHG emissions, up to over 40% in 2050, thereby also becoming the dominant sector in terms of GHG emissions.
Biofuels could technically substitute oil in all transport modes, with existing power train technologies and refuelling infrastructures. In particular, the main advantages of liquid biofuels are their high energy density and the compatibility with existing vehicles and fuel distribution infrastructure, up to certain limits in concentration.
In this context, the industry is the key developer of innovative technologies and responsible to bring them from the lab scale to market deployment, and at the same time is the main investor that can build these state-of-the-art plants and achieve significant GHG reductions in transport. The advanced biofuels industry can contribute between 6% and 9% of total EU transport energy needs by 2030 from sustainable biofuels, but this goal can only be achieved if some requirements are fulfilled.
A stable EU policy framework between 2020 and 2030, which also gives a planning horizon sufficiently beyond 2030 for those who will invest should be defined. In order to foster the decarbonisation and energy diversification of the EU transport sector, REDII introduced an obligation on European transport fuel suppliers to provide an increasing share of renewable and low-carbon fuels, including advanced biofuels, renewable transport fuels of non-biological origin (e.g. hydrogen), waste-based fuels and renewable electricity. Nevertheless, long-term policy to be stable and effective shall be compatible with the investment in terms of sustainability, competitiveness and innovation need to be more strongly established in order to ensure investor confidence. From this point of view, the REDII looks very modest in terms of impact as it does not seem to provide any confidence to the industry that it will be an effective tool in meeting the EU policies in decarbonising transport.
Finally, dedicated financial mechanisms and instruments need to be developed for the advanced fuels to facilitate technology development and market deployment and mandatory obligations should be established for advanced biofuels and low carbon fossil fuels, given the different level of maturity of the technologies. So far, a lack of long term stable legislation hindered the development of promising routes to reach demonstration and commercial deployment stage. This is particularly true in the case of capital intensive technologies. A wide range of different value chains are being demonstrated at industrial scale, which differs in conversion technology, the feedstocks used, the process employed and the resulting liquid fuels; but the compartmentalisation of the EU biofuels market has led to a malfunctioning market situation and trade barriers among the Member States. These uncertainties on the market situation are still a common obstacle to overcome in order to achieve its greenhouse gas (GHG) emission reduction target.
Without an appropriate policy framework and financing structure, the transport decarbonisation target, to which the industry can substantially contribute, risks not to be met by 2030.