EU adopts 10 percent mandate

By Susanne Retka Schill | January 12, 2009
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 that calls for a 20 percent cut in greenhouse gas (GHG) emissions from 1990 levels, a 20 percent increase in the use of renewable energy and a 20 percent cut in energy consumption through improved energy efficiency, all by 2020.

A mandatory 10 percent goal for transportation fuels such as biofuels, electricity and hydrogen is included in the renewable energy increase. 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 GHG reduction targets for biofuels and sustainability criteria.

The GHG target for biofuelsto take effect in 2011was set at 35 percent less than GHGs from fossil fuels. For biofuels producers in operation in January 2009, 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. According to Emmi Jozsa, biofuels legislation expert at Swedish ethanol producer and marketer Sekab, many ethanol producers already meet the 35 percent goal, but any 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 not only fossil fuels, but also biofuels blends, electricity and hydrogen. The revised fuel quality directive requires fuel suppliers to reduce GHG emissions caused by extraction or cultivation, including land use changes; transport and distribution; processing; and the combustion of transport fuels. Cuts in GHG emissions can be achieved by using more alternative fuels, or by reducing gas flaring and venting at oil wells or refineries.

A separate European initiative focusing on sustainability criteria is expected to be complete by the end of 2009, giving the European Commission time to review the language for inclusion in the climate change directive. The initiative says no member state can go beyond the sustainability and certification requirements set up in the directive, nor can the member state refuse a biofuel complying with the sustainability requirements. Jozsa explained that each member state will still have flexibility in developing its own incentives and policies, which in the past have often favored its own producers.

The directive offers incentives for more sustainable biofuels by allowing second-generation biofuels to be double-credited in the 10 percent target. These second-generation biofuels wouldn't compete with food or feed production because they would be made from wastes, residues, and nonfood 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 calls for the low ethanol blend standard to be raised from the E5 to E10, which Jozsa said 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 up to 10 percent. In Sweden's case, the country also has a standard for E85 blends.

The Brazilian Sugarcane Industry Association (UNICA) called the EU's new policy 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 such as the agro-ecological zoning adopted in September 2008 in the most important sugarcane growing region in the world, the state of So Paulo, are realities in Brazil," said Marcos Jank, president and chief executive officer of 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."