European Walls

By Robert Vierhout | May 04, 2009
The new European requirement to achieve a minimum renewable fuels usage of 10 percent by 2020 as part of the Renewable Energy Directive motivates the oil and car industry to imagine future fuel mix scenarios. Both sectors would like to know how much biofuel will be needed by then as well as how much fuel will be domestically produced and how much will be imported. Car companies are also faced with having to determine how to adjust technology to handle new fuel mixtures.

The European fuel quality standard that took effect this month will now allow higher blends of ethanol in fossil fuel. The ceiling has been raised from 5 percent to 10 percent by volume. That is not high enough if one would need to comply with the 10 percent target in the Renewable Energy Directive and regulators will most likely propose a higher biofuel standard ceiling within a few years.

Interestingly, the new blending opportunity has already materialized in France, where ethanol producers were desperately awaiting a new blending standard. France finalized its national E10 standard following the political acceptance of the European fuel standard in December. BP was the first to enter the French E10 market, announcing just before April that it would sell E10 at 3 cents per liter lower than its super unleaded 95 petrol. By the end of April, almost all of its 422 service stations in France were set to sell SP95-E10.

We will soon see similar moves from E5 to E10 in Sweden, where the E5 market is already saturated, as well as possibly Belgium and Germany. Sweden will return to using E10, as it had prior to joining the European Union. All the other countries will follow over time. Last year in Germany a huge debate on E10 use took place between the government and the automotive and oil industries. The German minister of the environment wanted to push ahead with E10. Oil companies reluctantly agreed to deploy an E10 filling network guaranteeing enough pumps for the older cars that could not "digest" E10. The German car industry had calculated that about 300,000 cars were not suited for E10. The importers of French and Italian cars had not submitted any data so it seemed defendable to go ahead. In the end the whole scheme collapsed. Why? Because just before the German E10 draft law was to be approved and implemented the car importers (of mainly French and Italian cars) said that 10 times more cars would be unable to use E10. The minister decided to annul the law, knowing that 3 million potentially unsatisfied car drivers would be a political liability.

The EU car industry, excluding the flexible fuel vehicle (FFV) producers such as GM and Ford, has always been very much against going over the E5 threshold. It was only in December that the European Automobile Manufacturers Association announced a commitment that from 2010 all new gasoline vehicles would be compatible with E10. Why only from 2010? European models such as Volkswagen, Volvo and Jaguar are sold in the United States and are able to digest E10. Those same models are sold in Europe with no manufacturing adjustments.

I witnessed how difficult it is for car manufacturers to think outside the box when we recently discussed fuel scenarios with one of the world's largest automobile producers. I suggested that for gasoline cars, the solution is as simple as building FFVs to replace gasoline-only models. Manufacturers could simply start doing what all car manufacturers do in Brazil and begin offering flex technology to the consumer. The question, "What's next beyond E10?" would then be solved. The car people stared at me as if I had made an indecent proposal. Maybe I had.

Robert Vierhout is the secretary-general of eBIO, the European Bioethanol Fuel Association. Reach him at vierhout@ebio.org.