More Countries Adopting Ethanol Policies

FROM THE FEBRUARY ISSUE: Bliss Baker looks at ethanol policies around the world.
By Bliss Baker | January 19, 2018

In the years since the international community began taking the human contribution to global climate change seriously, the ethanol industry has experienced several ups and downs. National mandates created markets that enabled the development of domestic biofuel industries in a number of countries, but these government commitments wavered when oil prices dropped to historic lows after the 2008 economic collapse.

Encouragingly, despite an extended period of uncertainty and less-than-ideal market circumstances, free trade has enabled global biofuel production to continue its incremental growth year after year. This resilience has been supported by real-world data becoming available to replace unreliable projections, illustrating the lifecycle greenhouse gas (GHG) benefits of ethanol use compared to conventional fossil fuels in transport.

There are clear signs that a growing number of countries are recognizing biofuels not just for their GHG emission and economic benefits, but also for their contribution to improved air quality in high-density urban centers and their ability to reduce reliance on crude imports. 

Most significant for the global biofuels industry are the recent signals from the governments of India and China—two of the world’s largest economies and auto markets—of their intention to significantly scale up the use of biofuels in their countries’ transport sectors. These signals are particularly noteworthy because they focused on the economic opportunities biofuels production presents for farmers, as well as ethanol’s ability to reduce harmful particulate matter emissions from transportation fuels.

At the 2015 U.N. Climate Conference (COP21) where the historic Paris Agreement was signed, dozens of countries highlighted policies promoting or mandating the use of biofuels for domestic transport in their Nationally Determined Contribution plans.

It has been encouraging to see an increasing number of countries introducing or enhancing biofuel mandates for transport fuels in their revised plans submitted at COP23 in November. 

At that conference, parties to the 2015 Paris Agreement established terms for full implementation of the agreement, including their NDCs. This sets the stage for the development of clear policy commitments in the next year, specifically designed to achieve national emission-reduction targets in the short and near term.

These efforts will have to consider the additional challenges presented by the fact that in the time since the 2015 commitments were made, multiple nongovernmental organizations have reported that governments will have to increase the ambitiousness of the NDC plans submitted in 2015 if the global community is to achieve the targets laid out in the Paris Agreement. 

This was recognized by 19 countries at COP23, including Brazil, China and India, who complemented their overall NDC plans by committing to development of biofuels targets and an action plan to achieve them.

This agreement is significant for the countries participating and the potential for trade, but also because the decisions included in the declaration were informed by modeling from the International Energy Agency and the International Renewable Energy Agency, which concluded that the temperature goals adopted in the Paris Agreement cannot be reached without a major increase in the production and use of sustainable biofuels.

Because structural economic and infrastructure reforms require a significant amount of planning and budgeting, governments have a limited number of policy pathways to choose from if they are to achieve short-term emission reductions.  

Ethanol’s value as a cost-competitive and immediately dispatchable alternative to fossil fuels, using existing transport fuel infrastructure and auto fleets, represents a unique policy solution to the challenges faced by governments.

Establishing domestic biofuel industries takes time, but a focus on free trade will enable countries to satisfy their demand for biofuels as they develop their capacity.

The Global Renewable Fuels Alliance looks forward to working with countries as they increasingly turn to biofuels to support their efforts to cut GHG emissions, and to facilitate longer-term transitions to a low carbon future.
 

Author: Bliss Baker
President, Global Renewable Fuels Alliance
647.309.0058
info@globalrfa.org