EU adopts mandatory renewable fuels goal

By Susanne Retka Schill | January 03, 2009
Web exclusive posted Dec. 21, 2008, at 12:05 p.m. CST

The European Union has a new directive that sets climate change reduction goals to be phased in over the next decade. The European Parliament approved the language Dec. 17 for Europe's 20-20-20 plan, which calls for a 20 percent cut in greenhouse gas (GHG) emissions from 1990 levels by 2020, a 20 percent reduction in energy consumption through improved energy efficiency by 2020 and a 20 percent increase in the use of renewable energy by 2020.

Included in the renewable energy increase is a mandatory 10 percent goal for transportation fuels, which includes biofuels, electricity and hydrogen. That replaces a voluntary 5.75 percent target for the EU, which was implemented by individual member states through a variety of policies. New measures incorporated into the EU directive include minimum greenhouse gas reduction targets for biofuels and sustainability criteria.

The GHG target for biofuels was set at 35 percent reduction when compared to fossil fuels. For biofuels producers in operation in January 2008, the requirement will take effect April 1, 2013. In 2017 the requirement increases to a 50 percent reduction, and for new producers after 2017 the target will be 60 percent. Emmi Jozsa, biofuels legislation expert at Sekab, the Swedish ethanol producer and marketer, said ethanol producers still using natural gas for process heat will have to adopt greener energy sources in order to meet those requirements.

Targets for GHG emission reductions include all transport fuels - fossil fuels as well as biofuels, blends, electricity and hydrogen. The revised fuel quality directive requires fuel suppliers to reduce GHG emission caused by extraction or cultivation, including land-use changes, transport and distribution, processing and combustion of transport fuels. Cuts in GHG emissions could be achieved by using more biofuels, alternative fuels or by reducing gas flaring and venting at oil wells or refineries.

The directive seeks to promote more sustainable biofuels by allowing second-generation biofuels to be double credited in the 10 percent target. Second-generation biofuels do not compete with food or feed production, since they include wastes, residues, non-food cellulosic and lignocellulosic biomass such as algae, wood residues or paper waste. The directive calls for the European Commission to develop a methodology to measure GHG emissions from indirect land use by 2010.

The fuel quality segment of the directive also calls for the low ethanol blend standard to be raised from the E5 currently in place to E10. Joszi said that can be accomplished fairly quickly on a national level, although the European Committee for Standardization (CEN) is expected to revise its standard for low blends upwards to 10 percent. In Sweden's case, the country also has a standard for E85 blends.

Already a significant player on the EU ethanol market, the Brazilian Sugarcane Industry Association (UNICA) called the new directive a positive signal for biofuels producers, saying Brazil's sugarcane industry is confident the sustainability criteria can be met. "Strict national legislation and the industry's own initiatives already in place, plus land use planning instruments like the agro-ecological zoning adopted in September 2008 in the most important sugarcane growing region in the world, the State of Sao Paulo, are realities in Brazil," said Marcos Jank, president and chief executive officer at UNICA. "Add to this the federal government's upcoming national mapping of regions suitable for sugarcane, and you have a solid set of safeguards ensuring that the expansion of sugarcane does not endanger sensitive areas or compete for land with other agricultural activities."