Unholy Alliance?

By Robert Vierhout | September 15, 2009
We all know that the performance of biofuels is relative to the amount of emissions from fossil fuels. The big question is, what are the emissions from fossil fuels? If biofuels replace the marginal fuel, the answer should be found by comparing biofuels with the fuel that is the most expensive to obtain and is, at the same time, a high greenhouse gas (GHG) emitter. However, it is not that easy.

European laws and regulations can be inconsistent, confusing and devious. An example of this can be found in an EU law on renewable energy, which holds a clause precisely on the issue of GHG emissions from fossil fuels. It contains a value for the emissions and a statement that the fossil fuel comparator "shall be the latest available actual average emissions from the fossil part of petrol and diesel consumed in the community." Obviously, a method is needed to calculate these emissions, and that is where the problems start.

The EU methodology originally agreed upon for calculating GHG emissions applies to the production and use of transport fuels (fossil fuels), biofuels and bioliquids (biofuels used for the production of electricity). Unfortunately, Some of the variables in the methodology are clearly only relevant for biofuels and some are related to fossil fuel only, making the law less straightforward than we had hoped.
When European regulators signed off on the package of laws on energy and climate, they included a law on the quality of (fossil) fuel. This directive, commonly referred to as the Fuel Quality Directive, forces oil companies to reduce emissions over the entire life cycle of fossil fuels by 2020. Oil companies argued that it is impossible to reduce emissions upstream or at the refinery level. The only stage where savings could be achieved would be downstream by using huge volumes of biofuels. So, the regulator applied a precautionary principle and all the biofuel sustainability rules were copied into this law.

When biofuel sustainability rules were added to the FQD, the wording on the methodology to calculate fuel emissions was changed and any reference to fossil fuels was left out. The result is that there are now two different methodologies to calculate emissions from fossil fuels: one clearly spelled out in the Renewable Energy Directive and one vague methodology coming from the oil industry. This raises the fundamental question of which law will prevail.

The European Commission environment department responsible for implementing the FQD started a "public" consultation procedure on the calculation of GHG emissions of fuels. A note that has been prepared by them makes their agenda clear: the emissions reduction by fossil fuels has to be achieved by reducing flaring and venting at the refinery level through, for example, carbon capture and storage, and by increasing the use of electric vehicles.

What is the bigger picture behind all this? The European Commission environment department has never been a supporter of biofuels. Their big fear is that both the automotive and oil industries will use biofuels to avoid having to make the necessary structural changes to either engine or production process to deliver GHG savings. Keeping the fossil GHG intensity baseline at the same level by leaving non-conventional fuels out of the equation makes biofuels less attractive. The oil industry would probably not object to that. A higher baseline means more savings to realize, something that is not their prime objective.

Achieving more savings by other means than biofuels will result in higher costs; using more biofuels results in less revenues. Making sure that the fossil fuel comparator does not change is best guaranteed by using the industry's own emissions data. If the environment people can accept it, why change it? It seems to be just another unholy alliance against the biofuels industry.

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