Here’s an update on recent news items and other public policy developments during the last few months relating to the development and commercialization of renewable fuels around the world.
Rifts developing in EU regarding proposed RED revisions. It has been reported that environment ministers from several EU nations (perhaps representing a majority of EU members) have expressed concern and/or opposition to the proposed 5% cap on food crop derived biofuels under the proposed revisions to the EU Renewable Energy Directive. The group, including ministers from Hungary, the Czech Republic and Poland, do not share concerns over the indirect land use changes (ILUC) that may result from production of food-derived fuels, noting that negative ILUC impacts are more likely to occur in the developing world and are not likely to be seen within Europe. These ministers also believe that the RED’s goal of achieving 10% biofuel usage by 2020 is unlikely to be met if food-derived fuels are capped as proposed. These discussions will likely continue until the European Parliament’s vote on the proposal, expected in July 2013.
EU RED Progress Report. The European Commission has issued a progress report on member state efforts to comply with the Renewable Energy Directive. The Commission found that most member states have seen significant growth in their use of renewables across all sectors, but that these growth rates are not likely to continue through 2020. Among the findings relative to the transport sector, the report stated that 22 EU member states failed to achieve the target of 5.75% renewable fuels by 2010. The report found that, although the EU as a whole is slightly ahead of its targets for biofuel usage in transport, the trend is that the longer-term targets will not be met unless further policy measures are adopted.
European industry position on proposed RED revision. The European ethanol trade group ePURE has issued a position paper on the revisions that have been proposed to the EU’s Renewable Energy Directive. Its main recommendation is that the EU set a target that petrol (gasoline) contain 10% renewable fuels, comprising separate targets of 8% for “conventional renewable ethanol” and 2% for “advanced biofuels”, the latter being fuels made from the feedstocks listed in the proposed Annex IX but without double or quadruple counting. This position clearly reflects the priorities of ePURE members, most of which are producing ethanol from corn, sugarcane, or other traditional feedstocks. The position paper also calls for the EU to set emissions reduction targets beyond 2020 as the directive now provides.
European ethanol lobby issues report critical of EU “double counting” for advanced biofuels. ePURE has also issued a report on March 27 that it had commissioned together with Novozymes, which concluded that the practice under the RED of double-counting to provide an incentive for adoption of advanced biofuels was ineffective. The report thus advocated against the proposal in the currently-pending RED revision under which advanced biofuels would be quadruple-counted. The report instead called for a “dedicated sub-target” for volumes of advanced biofuels to be incorporated in the fuel supplies of EU member states.
EU not ready to set binding targets for 2030 biofuel use. On March 27, the EU Energy Commissioner Gunther Oettinger said that biofuels were “not advanced enough” to yet justify setting binding targets for usage by 2030, since the current supply of biofuels is still dominated by “first generation agricultural biofuels”. He said that, although the EC wants to propose binding 2030 targets for all renewable energy usage, it would be premature to set such targets for transport fuels until such time as the market transitions to “second or even third generation [fuels]”.
U.K. think tank critical of ethanol use. The UK think tank Chatham House released a report on March 12 which recommended that the country reduce its dependence on corn-based ethanol in favor of “cheaper and more sustainable” biofuels based on feedstocks like used cooking oil. The report recommended changes to the UK Renewable Transport Fuel Obligation (RTFO), the national law which implements the EU Renewable Energy Directive, and which imposes stepwise targets to meet the EU goal of 10% renewable fuels by 2020. The report’s position was based on ethanol’s higher cost than biodiesel, and its alleged impact on food prices. The report cited government data showing that ethanol constituted 61% of the UK’s biofuel supply in 2012 (up from 41% in 2010), while biodiesel’s share declined to around 35% in 2012, down from about 60% in 2010.
Canada ending its biofuel subsidy program. According to the Toronto Globe and Mail, the Canadian government has decided to end its ecoEnergy program that has provided subsidies to ethanol and biodiesel producers. The newspaper reports that Natural Resources Minister Joe Oliver said in a late February letter to a Canadian industry group that “The government will not redesign or reopen the ecoEnergy for biofuels programs to new applicants,” citing budgetary constraints as the reason. Reportedly, the government has already granted $672 million in subsidies to ethanol and biodiesel producers planning or building plants, and plans to continue providing subsidies under existing commitments through 2017, at an estimated further cost of $1 billion. The Minister’s letter was apparently critical of the country’s biodiesel industry for failing to produce as much renewable fuel as promised. This decision apparently does not affect the country’s existing fuel regulations that require a 5% ethanol blend in gasoline and a 2% biodiesel component in the nation’s diesel supply.
India reportedly needs to issue a tender to import ethanol in order to meet the government’s goal of a 5% blend in gasoline by June 2013.
The Philippines will implement its E10 mandate on April 1, 2013. This decision by the National Biofuels Board ends a long delay from an earlier mandate under the Biofuels Act of 2006, apparently due to a reexamination of whether 10% ethanol blends would cause engine damage.
Ecuador has announced that its B5 biodiesel blend mandate will take effect in May 2013. Reportedly, this mandate will increase over time to a B10 requirement.
In Zimbabwe, the Green Fuel ethanol plant is back online, with production slated to start April 4. The reopening of this plant was made possible by a government decision to adopt a policy of mandatory blending of ethanol into gasoline, starting with a 5% blend and followed by increases to 10% and 20% over time.
A member of Parliament in Kyrgyzstan has proposed easing requirements for ethanol production licenses to stimulate private sector participation in an ethanol market that is now a government monopoly.
The government of Ukraine plans a 2-year policy to increase ethanol production 6-fold, to an annual rate of 360,000 metric tons, to meet its panned E5 blending mandate by 2014.
Previous Biofuel Policy Watch posts on international biofuel news:
- International Biofuel News, March 6, 2013
- Biodiesel News (and international biodiesel mandates), March 5, 2013
- The Proposed EU Trade Action Against US Ethanol, January 29, 2013
- International Ethanol Mandates, January 25, 2013
- The Proposed Revision to the EU RED, January 22, 2013
D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels.