As I mentioned in the first blog of the year, 2016 is the ‘year of implementation’. The year we will have to put together the measures needed not only to achieve the 2030 Framework targets and Energy Union goals, but also the COP21 Agreement. Certainly a Herculean task for all parties involved! I wanted to reflect a bit more on this…
This means producing lots of papers, spending hundreds of hours thinking about what we have done right or wrong so far and – ultimately – finding a compromise that benefits everyone. Not just the EU institutions, but also consumers and the climate. COP21 gave a long-term general direction to everyone: we are officially transitioning towards a low-carbon future and need to phase out fossil fuels. How we will get there is the real question we have to address now.
Commissioner Cañete recently said at an event in Brussels that we have to admit the mistakes of the past and not be afraid of learning from them. I think everyone can agree to that statement. From energy efficiency to renewable, including bioenergy, the Commission is giving everyone the opportunity to contribute to a broad range of issues on which legislative proposals are expected. We have a number of things to say and questions to ask.
On the planned review of the Renewable Energy Directive for example, we were disappointed to see that no target was considered for renewables in transport. With liquid fuels retaining a crushing majority of the market share until 2030 and even beyond, the Commission needs to promote sustainable biofuels such as sugarcane ethanol to make sure transport can also contribute to reaching the overall 27% target.
Take also the Effort-Sharing Decision, which is about how Member States will reduce emissions in sectors which are not covered by the EU ETS (heating, transport, agriculture). The transport sector is likely to be drawn upon heavily given its potential for lower emissions. This is where higher ethanol blends can help by providing a relatively cheap and easy alternative. By increasing the share of ethanol in the fuels available at the pump (such as E20, E85, etc.), you can achieve significant GHG emission reductions immediately, without having to wait for people to embrace electric cars!
This is the sort of simple yet effective measures which seem to be overlooked at this stage. The communication on the decarbonisation of transport, expected in Q3 of this year, cannot ignore ethanol’s potential if it is to really mean something. Electrification will only get you so far; ethanol can help us take that extra step and tackle emissions in the remaining 90-something percent of liquid fuels on the market.
And that’s if we only look at CO₂ emissions. Sugarcane ethanol fits well in the circular economy agenda – residues from the production of sugarcane are also used to produce electricity.
Our level of ambition requires that we use the potential of all energy sources which are ready to contribute. I already said what I think about the RED review, I will elaborate more on the other initiatives as soon as there is more clarity on where the Commission is heading. In addition, I’m very curious to see what will come out from the consultation on bioenergy which was launched last week and to which UNICA is planning to respond.
One thing is certain: there won’t be a silver bullet for reducing emissions from transport, only a pragmatic approach will succeed. If the Commission is serious about learning from past mistakes in 2016, it should start making the right choices now.
The moment has come for the EU to review one of the main pieces of legislation that influenced the EU biofuels and transport policies in the last few years: the Renewable Energy Directive (RED). A public consultation was launched in November 2015 along with an Inception Impact Assessment, which highlighted the options that the Commission is considering for the review.
The legislation should be adapted to the new EU 27% target for renewables set up by the 2030 Climate and Energy strategy. No national targets were agreed. This means that the European Union as a whole has committed to increase the share of renewables in the energy consumption by 27% compared to 1990 levels, but that Member States will have to negotiate to split the cake.
27% is not such an ambitious target, but the most worrying element in my perspective is the lack of a transport target in the options considered by the Commission for the review. It seems therefore that as of 2020, there will no longer be what I consider the best way to promote renewables in transport. Overall, I am not sure we can draw any conclusions on a legislation which implementation was paralyzed for almost 4 years because of the highly polarized ILUC debate.
In any case, I submitted this morning, on behalf of UNICA, the response to the consultation and my three key messages are:
Liquid fuels will still dominate the market and they need to be decarbonized - By 2030, the share of liquid fuels in the European Union is still expected to account for 93% of all energy in transport. This means that the Commission needs to promote the use of cleaner liquid fuels if it wants to decarbonize transport – electricity alone cannot make it by 2030. Technologies to achieve this goal, such as sustainable biofuels, already exist and should be promoted along electrification.
Sustainable biofuels should be promoted - Mandatory targets, or obligation on fuels suppliers, remain the best way to incentivize RES in transport. In fact, liquid fuels fully depend on traditional fuels suppliers to distribute their products. The market power of these operators is too large for biofuels to compete. A mandatory target, or an obligation on fuels suppliers, is the only way to force them to place clean liquid fuels on the market. In addition, to promote the competitiveness of sustainable biofuels, they should be taxed in a fair way, that is on the basis of their energy content instead of energy volume.
Higher bioethanol blends will have a positive environmental and economic impact - Ethanol high blends, such as E20, E85 and ED 95 for heavy transportation, should be promoted, as alternative fuels. This technology, developed by European companies, already exists and has positive track record in Brazil. Sustainable ethanol high blends reduce emissions by 90%, they are scalable, they need minimal change in infrastructure and they are less costly than other solutions. In addition, they reduce local pollutants compared to diesel.
I hope these points are duly taken into consideration in the evaluation of the consultation responses and further on in the review process. I will certainly continue repeating that we need to be realistic about what the future may look like and give space to the more sustainable resources, without harming the overall competitiveness objective.
I hope you’ve all had a great winter break and that you’re well rested for what promises to be an exciting year in terms of the transport and energy policy agenda.
Last year, the Energy Union and COP21 kept us not only incredibly busy but also very hopeful for the future. With this in mind, we know that 2016 is the year where we need to see things through – the ‘year of implementation’ as Commissioner Cañete has nicknamed it – and a number of big legislative dossiers are headed our way.
One such dossier is certainly the review of the Renewable Energy Directive (RED). In a nutshell, the Directive has to be reviewed in order to integrate the 27% target for 2030 which was decided at the October 2014 European Council. The debate around its review will open a number of discussions to address the shortcomings of the existing Directive. In case you missed it, a consultation on the review of the RED is currently open on the Commission’s website; you can access it here. So far, we are disappointed, as the Commission doesn’t intend to include a specific target for transport in the new RED. As we see it, a target represents the most effective tool to promote the participation of renewables in the fuel mix. In any case, we are committed to make constructive contributions to the debate. Watch this space for more on our concrete proposals.
Transport in general is going to be a major energy & climate topic for 2016. We expect a number of initiatives on it in the second half of the year. The proposal on the post-2020 effort-sharing decision (how to tackle non-ETS emissions) is expected in Q2-Q3 of 2016, and Transport (along with Buildings and Agriculture) is one of the targeted sectors. In Q3, we’re eager to see if the Communication on Decarbonisation of Transport will recognize the environmental benefits of using sustainable biofuels such as sugarcane ethanol.
Let’s not forget that New Year also means new Council Presidency! We really look forward to working with the Dutch, who have taken over from the Luxembourgish since January 1st before handing it off to Slovakia in July. We were happy to see that the theme for the April informal Environment Council will be ‘innovative technology and policy for smart and green transport solutions’, and that biofuels will be taken into account in preparing the post-2020 transport policy, according to their programme.
Busy year ahead!
Stay tuned as we will keep you updated on all of the above.
With COP21 around the corner we thought it was important to highlight the way sugarcane ethanol can contribute to tackling climate change, and what are some of the steps which need to be taken in order to use sugarcane ethanol’s full potential to decarbonize the transport sector.
This week, we have published an op-ed which does precisely that on the EurActiv website. You can access it by clicking here.
For your convenience, you can also read the op-ed below. And if you happen to be in Paris and would like to find out more about Brazilian Sugarcane, come and visit our booth in the UNFCCC area.
Cleaner Fuels are necessary to tackle climate change
Imagine that it is Monday, 14 December. A new week is starting. A few days ago, after two weeks of intense rounds of negotiations, world leaders reached a binding agreement to help limit global warming to around 2.7°C. Everyone is happy with it. Poor countries, richer countries, experts, NGOs. It’s over. Finally, a successful COP.
True, it’s less than the original goal of 2°C, but it’s an important step, and the good news is that they agreed to include a five-year review clause, meaning that we actually have a shot at reaching the initial objective in the future, if governments agree to increase their ambition. Everyone can finally rest and prepare for the Christmas holidays.
Soon, it’ll be 2016. So now what?
Say the scenario above happens. Reaching an agreement and committing to honouring it is the first step to dealing with climate change. The second is turning that agreement into reality. We keep hearing that everyone has to play a part in decarbonising the global economy; 2016 will be the year we’ll have to put our money where our mouth is.
The IEA recently released data showing how the global demand for transport fuels has risen systematically since the early 1970s. Realistically, an agreement at COP21 is not going to change this trend anytime soon. Global economies will continue to develop, and so will the number of vehicles on the road and their related emissions.
What we can do however is to make sure that the demand for cleaner transport fuels rises and that their share in the fuel mix increases as well. In other words, we need to make sure the carbon intensity of transport does not follow the same path as its growth, but rather the opposite.
Fuel efficiency gains have been and will continue to be made, but they are likely to be outpaced by demand growth. So, solving the transport emissions issue will have to be dealt with by other means, one of which is using the cleanest biofuels.
The government of Brazil has clearly stated in its climate pledge that the transport sector will have to contribute to the effort, and that it will rely on sugarcane ethanol for this. Why? Because a litre of sugarcane ethanol emits on average 90% less CO₂ than petrol, and reduces local pollutants when compared to diesel.
It is simply the easiest and cheapest way to reduce emissions in the sector, which is why Brazil has indicated in its INDC (Intended Nationally Determined Contribution) that it would increase the share of sustainable biofuels in the Brazilian energy mix to 18% in 2030 to reduce transport emissions in the country. More specifically, Brazilian President Dilma Rousseff said sugarcane ethanol and other derivatives would account for 16% of the energy mix in 2030.
At EU level, the debate around biofuels has momentarily stopped with the closure of the ILUC file in April this year. However, transport remains one of the key sectors where emissions cuts will be required in order to meet the 40% GHG emission reduction EU target by 2030. In 2016, the EU will look at transport as one of the three non-ETS sectors (along with buildings and agriculture) where emissions cuts can and must be achieved.
One major issue remains open though. No differentiation is made amongst first generation biofuels. Yet, there are those which have adverse consequences on the environment, but also the ones which are actually sustainable, such as sugarcane ethanol. Never mind the fact that sugarcane residues are also used to produce second-generation biofuels and bioelectricity. The absence of distinction hurts one of the cleanest available transport fuels in the world today.
At EU level, one opportunity to make full use of the advantages of sugarcane ethanol will be the review of the RED, in which a distinction between low- and high-ILUC biofuels can and should be made. This may seem like just a nuance, but it is critical in order to give a role to sustainable first generation biofuels. Recognising this simple fact would make it easy to seize the low-hanging fruit that they are, given how easy it is to blend them to reduce the carbon intensity of other transport fuels for which demand will rise.
One may think that sugarcane ethanol is there to compete with electric vehicles. The opposite is true in fact. We believe that the use of sustainable biofuels is actually complementary with electrification of mobility. Realistically, liquid fuels will retain an important – perhaps the biggest – role in transport in various combinations. Our conviction is that hybrid ‘electric + low-ILUC biofuels’ vehicles will be the optimal formula to cut emissions in transport by 2030. We want to be part of the solution.
Géraldine Kutas is Head of International Affairs at the Brazilian Sugarcane Industry Association (UNICA).
Yesterday, President Dilma Rousseff visited the Sugarcane Technology Center (CTC), a world leading technology company gathering knowledge of the entire sugarcane value chain, and inaugurated its brand new biotechnology laboratory. Started as an association of sugarcane ethanol industries in 1969, the CTC was restructured in 2011 as a private company, and in 46 years it revolutionized the Brazilian sugarcane productivity and sustainability.
CTC focuses on cutting edge technologies working, for instance, on second-generation ethanol while improving the productivity of the sugarcane. The center has developed a new technology named “Flex Straw” to improve the collection and processing of sugarcane straw. This new technology generates additional 100,000 tons of sugarcane waste during the harvest, which, on average, could produce electricity to power a city of around 125,000 inhabitants. The sugarcane residue can be used to produce bioelectricity and second-generation ethanol, allowing companies to increased by 50% the production of ethanol out of the same volume of cane. Moreover, studies conducted by the CTC contributed to improve the quality of the sugarcane itself, which as a result is more resistant to insects and more tolerant to herbicides.
To say it with numbers, this all translates in circa USD 3 million per year of loss avoidance!
However, what makes innovation crucial in the development of any country is that its benefits are not constrained to one sector, it spillovers to the whole society. The innovation developed in CTC not only boosts the productivity of the sugarcane sector, but also puts Brazil in the forefront of the fight against climate change. That was the message the Brazilian President delivered during her visit to the CTC.
Speaking about the target to reduce Brazil’s GHG emissions by 43% by 2030 and the challenges to cut emissions in transport, President Rousseff stated: “One of the basis of this reduction is certainly in the fuel matrix, which happens to be the most difficult sector to cut GHG emissions in the world. But, In Brazil, we have an advantage: no car runs without ethanol in the country. We are committed to raise the contribution of ethanol in our fuel matrix from 30 to 50 billion liters.”
In the EU, the Commission has just adopted the Horizon 2020 work programme for 2016-2017, which foresees €10 million for the development of next generation biofuel technologies in each year of the programme. It is still early to say whether this will be enough to boost research and innovation in biofuels, considering the uncertainty regarding the 2030 Climate and Energy Package and the role biofuels will play in the long run. But chances are that, thanks to innovation, Brazil will overtake the EU in the development of clean fuels to decarbonize transport.
On Sunday, Brazil’s President Dilma Rousseff formally announced her country’s GHG emission reduction pledge at the United Nations Headquarters in New York. Looking back at some of her country’s achievements in the fight against climate change, Mrs. Rousseff said ambitious actions would still be undertaken.
And they are ambitious indeed! Brazil will reduce its greenhouses gas emissions of 37% by 2025 and 43% by 2030, compared to 2005 levels, Mrs. Rousseff declared. In perspective, that’s even more ambitious than the EU’s pledge of 40% in 2030 compared to 1990 levels!
For a leading developing economy to make such a commitment sends two messages.
The first is that yes, developing countries also need to do their part. As Mrs. Rousseff put it in her speech, COP21 is an opportunity to shape a “common response to the global challenge”, with “common but differentiated responsibilities”.
The second is that world leaders are finally confident that economic growth does not necessarily have to go in pair with dirty energy consumption. Clean energy sources are no longer a dream, or the luxury of rich countries. It’s now a fact: technology is ready; all we need is to use it and encourage its deployment wherever possible.
By 2030, said Mrs. Rousseff, Brazil will get 66% of its electricity from hydropower and 23% from other renewables, such as bioelectricity. It will also raise the share of renewables in its total energy mix to 45% (the role of renewables in Brazil have declined in percentage over the past years), with a 16% share for first and second-generation ethanol. Strong government objectives and steering will give the right signal for investors too, who will eventually make it happen and revamp the sugarcane sector.
It’s true the detailed breakdown of these numbers – needed to know how we’ll convert the targets into meaningful reality – remain to be known. This is something which will have to be discussed as a second step, by establishing a permanent dialogue between the government and stakeholders such as the Brazilian Coalition for Climate, Forest and Agriculture for instance.
But in the meantime, let’s celebrate Brazil’s ambitious pledge to the global effort against climate change, and the recognition that ethanol will be called to play a key role in it.
To kick the season off, I’ll be in Stockholm this week to talk about second generation biofuels, and in particular the outlook for ethanol produced in Brazilian bio-refineries. I thought it was a good opportunity to give you a short overview of what I’ll cover.
Renewables make up for around 40% of Brazil’s overall energy mix. That’s right, 40%. With a share of around 16% of this mix, sugarcane is the number one source of renewables in the country. Hydropower – the number one renewable in Europe – only comes second in Brazil. Today, sugarcane is used for two things mostly: sweetening your coffee and running cars on ethanol (mainly the juice), and producing bioelectricity (bagasse).
But 2G ethanol opens new opportunities: it reduces GHG emissions by more than 90% compared to gasoline, it increases ethanol production by 50% and it doesn’t compete with food crops as it’s based on crop waste. Indeed, by using the sugarcane residues, second-generation ethanol refining maximizes resources efficiency.
This is what one of Brazil’s biggest energy companies, Raizen, does at its new 2G plant. By using enzymes to transform the cellulose of sugarcane residues (bagasse and straw), the plant produces 42 million liters of second-generation ethanol the cost of which are expected to fall below those of 1GE in the next five years. Interestingly enough, the plant is co-located to an 80-years old sugar and 1G ethanol production facility.
The GranBio plant in Brazil, is another good example of what sugarcane can bring to the energy sector. Aside from the 82 million liters of bioethanol it can produce annually, the plant also co-generates electricity and heat with bagasse and lignin. As such, it produces enough power for 300,000 inhabitants. Not bad for bioelectricity, right?
With the right harvesting and processing techniques, these companies show that second-generation biofuels bring their own set of opportunities, not least of all the ability to literally double Brazil’s biofuels production without increasing planted surfaces, by using waste as feedstock. Also, they’re available all-year long, and they’re almost carbon-neutral.
At a time when energy efficiency, decarbonisation, and waste reuse are topping the environmental agenda, the reality of proven solutions such as bioethanol and bioelectricity must be acknowledged and supported with the right public policies in order to be able to release their full potential.
That’s the story I’ll tell the folks in Stockholm, in a nutshell. Stay tuned for more!
Considering the traffic these days in Brussels, it really looks like EU institutions are back to school, and so are we! Let’s have a look at what’s coming our way to give you a little taste of what we’ll be talking about over the next few months.
And talking about traffic and transport, the months ahead will be rich of news in the sector.
COP21 is approaching fast (less than 100 days to go now) and the pressure is rising for World leaders to work towards and reach an ambitious and binding climate deal in Paris. The European Commission has committed to reducing its GHG emissions by 40% in 2030, and given the extent of the challenge, all sectors will have to make the necessary efforts to achieve this objective. Indeed, according to the latest Commission reports, the pace of renewables’ penetration in the transport sector has been slow so far (only 5.7% in 2014). All eyes have now turned to the post-2020 framework, around which most of the EU transport debate will revolve in the coming months.
The Commission is getting ready and is scheduled to release a Communication on the Decarbonisation of Transport in the first half of 2016. The question is: what is this strategy going to look like? A few weeks ago, the Commission closed a consultation on the review of the 2011 White Paper on Transport. The verdict? It’s something that UNICA has been advocating for long time: intermediate targets are needed if the EU is serious about achieving its long-term transport decarbonisation objectives. So most of the respondents also said!
The role of electric cars will be important, there’s no one denying that. But in 2030, 90% of EU vehicles will still be running on fuel, according to a recent E4Tech report. That’s why we’ll also need lighter and more efficient cars. The Commission has said it is looking at stricter emission standards for road vehicles. But and perhaps most importantly, we’ll need cars using cleaner fuels. Smarter fuels. And that’s where ethanol can make a difference.
Too often biofuels are seen as a unitary group of transport fuels, regardless of their differences. Smart biofuels are those using production processes, which are responsible and sustainable. Not only do they help decarbonize transport, they can also contribute to a thriving economy. Don’t take our word for it, take that of the Director General of the Food & Agriculture Organization (FAO)! Brazilian sugarcane ethanol does precisely that. It reduces GHG emissions by 90% compared to traditional fossil fuels, it is mostly grown on degraded pastureland, hence not competing with food crops, and it’s creating good jobs.
But that’s not all. You’ve probably heard of ‘Smart Cities’, the more efficient, sustainable cities of the future. Sugarcane ethanol can also help make these cities a reality through waste-to-energy processes. One example: bagasse, the fiber residues resulting from sugarcane processing, can and has been used to generate bioelectricity in Brazil, where this has helped reduce emissions of more than 300 million tons of CO₂ in the atmosphere since 2003. Adding to its lower GHG emissions and air quality advantages over traditional fuels, smart biofuels will need to play a role in urban transportation if we are to build a truly sustainable transport system for EU citizens.
The choice is simple; either we stick with the old policies, which fail to make real progress, or we adopt new, smarter ones, which include a role for all greener transport solutions, including ethanol. We still have a few months to help the EU do that, so let’s get back to work!
Here we are! The ILUC file is finally over and now it seems that no one wants to hear more about biofuels, especially the Commission.
However, biofuels are alive and kicking and there has been evidence of their presence in the past few weeks!
During his opening speech at the EU Sustainable Energy Week, Commissioner Cañete focused on energy efficiency and didn’t even mention biofuels, but he emphasized that the transport sector should be prioritized, particularly through the adoption of ever stricter CO2 emissions standards for vehicles.
In addition, the Commission released the RES progress report showing that the penetration of renewables in transport has been very slow so far, reaching 5,7% in 2014 and concluding that introduction of higher blends of biofuels will be necessary to put biofuels back on track. After all, Cañete declared that “achieving our 10% target of renewable energy in transport [by 2020] will certainly be challenging, yet feasible.”
At the conference on decarbonisation of road transport, on 18 June, biofuels were not on the agenda, but the biofuels industry – and not only them luckily! – made it loud and clear that a post-2020 energy framework should include targets for renewables in transport. I was actually pleased to see that after the conference Commissioner Cañete used again the #biofuels hashtag for the first time in some weeks in one of his tweets. To get clarity of the post-2020 biofuel policy we would however need a bit more than a hashtag, Mister Commissioner!
These are all little hints that we shouldn’t lose hope and still find the energy to advocate for balanced policies on biofuels and decarbonisation of transport post-2020.
UNICA is fully committed to engaging in the next months for a ‘decarbonisation of transport’ policy that includes all options available on the market. If we want to reduce our transport emissions, we will need a diverse mix of fuels and technologies. We can’t just rely on electric vehicles only - just like we cannot rely only on biofuels. Let’s aim for a realistic, greener fuel mix for 2030.
As you can see from the pic below, I had the chance to meet Mr Cañete at EXPO during his visit to the Brazilian Pavilion and hopefully my message came across!
Commissioner Arias Cañete, Dr. Roberto Rodrigues and Géraldine Kutas discussing in front of the sugarcane at the Brazilian Pavilion (Expo Milan).
I recently attended a conference in Brussels on the negotiations of the Environmental Goods Agreement (EGA). The negotiations, which were mandated by the 2001 Doha Declaration, were launched on a plurilateral basis in July last year by a group of WTO countries (accounting for around 86% of the world trade in green goods) including the European Union. It aims to remove tariff and non-tariff barriers to trade for “green goods and services”.
What are we talking about when referring to environmental goods? There is no clear definition yet. In effect, everything that helps us ‘green’ our economies, from wind turbines, water treatment filters to recycling equipment and air quality monitors could be considered an environmental good. It is estimated that global trade in environmental goods amounts to nearly $1 trillion annually.
So far, already six rounds of negotiations have taken place, with the next round scheduled for next week, from 15-19 June. Quite disappointingly, ethanol is not part of the list of green products falling under the scope of the agreement. The biggest challenge of the negotiations is indeed about deciding on the list of products and, by now, already 650 tariff lines and more than 2,000 products are under consideration. Every country promoted a list of products, but ethanol was not part of any of the lists suggested, despite its proven environmental benefits.
Brazilian sugarcane ethanol reduces GHG emissions by 90% on average compared to gasoline and it achieves among the highest GHG emission savings compared to fossil fuels even when land use change factors are accounted for.
My doubts of course are on the credibility that such project will have if products like ethanol are not included in the list and if new countries do not joint. Countries in EGA are in fact already part of lower tariff schemes. So further reducing tariffs may not have a huge impact on GHG emissions reduction, I’m afraid! In the case of ethanol, tariffs are generally very high (0.19€/liter) in the EU. Tariff reductions, then, would have the potential to yield extraordinary environmental benefits.
During the conference, both Trade Commissioner Cecilia Malmström and Climate & Energy Commissioner Miguel Arias Cañete emphasized the positive impact that EGA could and should have in the fight against climate change and made reference to Europe’s role “as major exporter of clean technologies”.
However, contrary to the Commissioners’ words, it seems to me that, as it stands, the EGA will lead to a list of products selected in a somewhat arbitrary manner, rather than on the basis of their environmental benefits. The EGA looks more, for the time being, like a platform for the negotiating parties to advance their exporting interests when it comes to green technologies than a tool to fight climate change.
Trade is not a zero-sum game. If the EGA negotiating parties are serious about making legitimate progress towards addressing global warming, then they would have to widen the list of liberalized products to include all goods that deliver environmental advantages, such as ethanol.
We’ll certainly monitor with great interest the next two rounds of negotiations next week and in July, when the negotiation parties should narrow down the list of products.