Fancy a visit to Brazil? Brazil comes to you… Come and see us at the Brazilian Pavillon, EXPO Milano 2015
This year’s theme of the Universal Exposition EXPO Milano 2015 “Feeding the planet. Energy for life” couldn’t be more spot on for us!
I’m very excited to present Brazil’s success story with renewable fuels and to organise a conference on “Producing food and energy for a healthier planet: the case of the Brazilian Sugarcane Ethanol”, on Tuesday 2 June in the Brazilian Pavillon, Milan of course!
As I mentioned a few times already in my blogs, Brazilian sugarcane industry typically supplies both food and energy, with a minimal use of land. Only 0.5% of Brazil’s territory is used for bioethanol, with which Brazil managed to replace 40% of gasoline.
We’ll have a number of speakers , experts in sugarcane, including former Minister José Goldemberg, Sven Sielhorst from Solidaridad and Simon Usher Chief Executive Officer at Bonsucro, ready to walk you through the Brazilian experience and we hope this may serve as an inspiration for Europe, which is struggling to make a good use of biofuels.
More information on the event are available here! Come and see us in Milan…as an anticipation I can already tell you that the event will be followed by a cocktail with Brazilian food and drinks, where Chef Diego Lozano will talk about the history of Brazilian pastries to interested participants!!!
Members of the European Parliament finally endorsed the COREPER text on ILUC yesterday morning in plenary. After the disappointment of not winning concessions from Member States on any of their main points, MEPs have – against the will of many – voted in favour of the Council ILUC text. Final rubber stamp (for real this time!) should be given by Member States at the next Energy Council on 8 June.
In the meantime, in case you are confused on the outcome of almost three years of negotiations, here below you can find a summary (I couldn’t help thinking about this movie, which also happened to be quoted by Mr Torvalds during yesterday’s debate!)
- Little consolation that the final cap agreed is set at 7%. My comment is: better than nothing! We have always criticized such a black and white approach, but we don’t want to be too negative and at least a higher cap than the 5% proposed by the Commission will allow a little share of bioethanol to remain in the EU biofuels market.
- The 0.5% non-binding target for advanced biofuels. With no incentives for advanced biofuels, their ability to participate to the 3% left of the 10% RED target is even more in doubt…
- …and, of course, the exclusion from the deal of the 6.5% sub-target for bioethanol. More sustainable biofuels will therefore not be incentivized in Europe and Member States will not move towards an E10 blend. A real disappointment for bioethanol, considering that biodiesel will cover most of the 7% cap.
It’s time to turn the ‘ILUC page’ and look beyond 2020. Policymakers need to start thinking already about the longer term and set up a credible framework for the post-2020. Low-ILUC biofuels should be promoted and sugarcane bioethanol is one of those.
We see two important milestones in particular: the revision of the Renewable Energy Directive in 2016/2017 and the wider discussions around the decarbonisation of transport. In both cases, we will be there to put sustainable biofuels at center stage.
Working for Brazilian interests, you may say my judgment is biased, but I just can’t help praising the decision taken by the Brazilian government to increase, today, the ethanol blend in gasoline to 27%. This move is expected to have a positive impact on the biofuels industry and will no doubt have a positive impact on the environment.
A question came straight to my mind: Is the EU not simply lagging behind? As Brazil moves to 27%, is it not incredibly ironic to see Europeans getting cold feet about moving to a 6.5% content of ethanol (in energy) in petrol?
I mean, the EU wants to be at the forefront in the fight against climate change and you’d expect sustainable fuels to be promoted over less sustainable ones. However, it seems the EU is not even ready to generalise the use of E10! In the current debate around the 6.5% sub-target for bioethanol in petrol, some argue it would go against a level playing field between biodiesel and bioethanol - despite the superior GHG savings of the latter. Another reason invoked is technical compatibility with the current fleet. In the meantime, the United States widely use E10 and Brazil is even allowing higher blends.
You might ask yourselves: why the EU is struggling with this?
ENVI MEPs barely managed to pass a sub-target at 6.5% in their second reading position and Member States don’t seem overly enthusiastic.
The reality is that only a few people actually understand the meaning of ‘that 6.5%’. I would like to explain it here and respond to the main concerns raised by MEPs and Member States.
A 6.5% of renewable energy (in energy) in petrol corresponds to an ethanol blend of 9.5% in volume (E9.5). Although the European Commission declared in 2012 that E10 should be the main petrol fuel used in all the Member States by 2013, only 3 Member States (France, Germany and Finland) are currently selling this blend in fuel stations.
The good news is that there are no technical barriers preventing widespread use of E10 across Europe, as 90% of all cars produced after the year 2000 can run on E10. The only element needed is the political will to incentivise bioethanol usage among European consumers who are otherwise attracted by diesel, currently benefiting from lower taxation compared to gasoline.
Another essential question needs to be addressed at this point: why does a level playing field between biodiesel and bioethanol not make much sense?
Because biodiesel is already the preferred option in Europe and, with a cap on traditional biofuels, Member States will meet their target for conventional biofuels (at whichever level it’s eventually set: 5, 6 or 7%) just by using biodiesel.
What would be the consequence? Bioethanol would be out of the market, despite its sustainability!
It’s absolutely critical to understand the consequences of a cap on traditional biofuels and the subsequent necessity for a specific sub-target for bioethanol. In addition, if the EU market stays locked with E5, there will be no space for advanced ethanol as there is currently enough conventional production to supply this blend.
We, at UNICA, tried to make it simple and understandable for non-experts in this infographic. I hope this helps!
Today, the European Parliament’s Environment committee adopted a second reading position on the ILUC dossier, and I’d like to congratulate MEPs for many of the points they expressed through their vote.
First, they signed off on a 6.5% target for energy from renewable sources in petrol by 2020. At UNICA, we believe this particular amendment was critical to the development of a more balanced biofuel policy in Europe. Today, MEPs agreed on a 6% cap on conventional biofuels. This cap could be entirely met by biodiesel, leaving no room for bioethanol (please see our new infographics here on why this would be the case).
If we want to be serious about reducing emissions from petrol, we need to be able to blend it with bioethanol, a fuel guaranteeing significant emission savings, even when ILUC is taken into consideration. The 6.5% target provides certainty for bioethanol and will help the EU reduce its transport emissions.
Second, we are satisfied with the 1,25% sub-target for advanced biofuels, assorted with multiple counting. We believe it is a realistic ambition and a good signal sent to investors. Developing advanced biofuels requires considerable R&D efforts. For projects to reach commercial scale – a great challenge for some advanced biofuels – the regulatory framework needs to be crystal-clear.
Finally, I am also particularly glad to see that ENVI MEPs agreed to consider a longer timeframe for biofuel policy beyond 2020. We hope this will break the ‘code of silence’ around biofuels for the post-2020 period that has prevailed in the Commission over recent months.
As the Parliament will now engage in trialogues with Member States, we urge the rapporteur Nils Torvalds to carry these three points forward, especially the 6.5% target for renewable energy in petrol.
I’m aware that there will be limited flexibility amongst Member States to deviate from the Common Position adopted in first reading. The Council openly stated that the target for renewable energy in petrol was seen as unnecessary (Council Statement accompanying the first reading position) as it would not directly tackle ILUC. However, I strongly believe that the one way of tackling ILUC is to incentivise the consumption of low-ILUC biofuels such as bioethanol and even more, Brazilian sugarcane bioethanol. Sugarcane bioethanol brings emission savings of 55.8%, even when the ILUC impact is taken into account.
My last word will be for Member States: if you are serious about reducing transport emissions, use every opportunity at hand, including the wider use of bioethanol to reduce emissions from petrol!
Well before we started thinking about our New Year’s resolutions, the European Commission published on 16 December its work programme for 2015, based on 23 new initiatives built around 10 key policy priorities.
We can only applaud the targeted nature of measures envisaged and this new Commission’s desire for better regulation. We believe this commitment can help Europe meet its political objectives.
However this ‘to do list’ seems to be overlooking some crucial aspects, that we hope the Commission will address in the course of 2015.
Decarbonisation of the energy mix appears as a key building block of the new Energy Union currently being designed by the European Commission. At UNICA we want to make sure that reducing transport emissions plays a key role in bringing down overall emissions. And we are unsure of what the Commission is planning to undertake in this respect.
If we go back to the 2030 Energy and Climate Framework published a year ago, or even to the October European Council conclusions, there are only limited indications of how the EU will concretely reduce emissions in transport. Despite calls for a review of the 2011 Transport White Paper during parliamentary hearings – and the preparation of an own-initiative report on the topic by Wim van de Camp MEP, the Commission has so far remained silent on this particular point.
At UNICA we remain optimistic and would like to recommend some New Year’s resolutions to the Commission. We have gathered some thoughts in a new position paper on reducing transport emissions by 2030, where we call for EU policymakers to:
- Prioritise transport as part of the measures of the 2030 package to be proposed in 2015, if Europe wants to be credible in reaching the 40% GHG reduction target agreed in October 2014;
- Extend and increase the target of the Fuel Quality Directive after 2020, as this would provide the right incentive to encourage road transport emissions reductions beyond efficiency gains (“EU 2030 Road Transport Decarbonisation Scenario Analysis”, E4tech, 2014);
- Promote a more balanced approach to the biofuel dossier to reflect the real environmental performance of biofuels, both conventional and advanced;
- Promote a better incentive system for stimulating the production and consumption of advanced biofuels;
- Clarify how the 27% EU renewable target will also translate in concrete measures and incentives for biofuels in the EU transport fuel mix.
A new study developed by E4tech, presented at our event in November, clearly states that biofuels will remain an essential component for decarbonising transport and, in the scenario to 2030, they have the potential to contribute up to 30MtCO₂ emissions savings with a 10% FQD target, instead of 6%.
Something to bear in mind for the implementation of our New Year’s resolutions!
On 4 December 2014, the Environment Committee in the European Parliament held a public hearing on air quality and on national emissions beyond 2020. Emissions from road traffic were naturally discussed and the debate focused, as expected, on testing methods. The new test methodology to count for real-driving emissions should be introduced in EU legislation not earlier than 2017 and a representative from Daimler, explained that real driving test (World Light Duty Test Procedure) will require “massive” hardware changes for car manufacturers and a two-step approach to implement the changes at the manufacturing plants.
The bottom line is that real benefits in reducing carbon emissions from transport won’t be seen for approximately another 10 years.
In this context, my call for a more balanced approach to biofuels makes even more sense. Can the EU realistically only rely on car efficiency to decarbonise transport?
It’s true that great improvements have been made in vehicles’ emissions and that EU targets for 2015 have been met already in 2014, but all this is based on inaccurate measurements that do not reflect real driving conditions. In the meantime, biofuels are also under scrutiny and good performing biofuels such as sugarcane ethanol - which can definitely be part of the solution for a more sustainable transport system - are treated in the same way as less performing biofuels. Transport is left without any sound strategy to reduce its emissions!
Once again we encourage the Commission, which will facilitate second reading negotiations on ILUC, and the European Parliament and Member States, to pursue a more nuanced approach to biofuels and work towards a regulatory framework which promotes the best performing products and measures, such as bioethanol in transport and real driving test cycles for vehicles.
On 24 October European leaders reached an agreement on the framework which will set the energy and climate scene for the next 15 years. The deal embraces several elements which will form the basis of the legislative proposals to be developed by the European Commission.
I complained in the past already about the lack of ambition of the 2030 Climate and Energy Package in terms of transport-specific targets and I keep on arguing that, if Europe does really want to meet its climate targets, transport should remain high on the agenda.
The conclusions call on the Commission to examine instruments for “renewable energy sources in transport” post 2020 in a comprehensive and technologically neutral way, which could possibly involve an extension of the Fuel Quality Directive (FQD) after 2020.
The biofuels industry needs certainty after 2020 and an extension of the FQD could provide it. UNICA encourages the European Commission to start discussions on this as soon as possible. My hopes are quite low, especially after I heard that some MEPs in the ENVI Committee, using their power of scrutiny under comitology, tabled objections to the new implementing measure proposed by the Commission on Article 7a of the FQD. Should the objection go through, we could expect additional delays for the implementation of the existing Directive. This would postpone any meaningful decision on fuel quality after 2020.
If you want to hear more on the transport framework post-2020 and on how Brazilian Sugarcane can contribute, join us on 19 November in Brussels for a discussion on “Think Energy. Think Brazil. Perspectives on the 2030 Energy and Climate Package”. Our experts will exchange views with policymakers and E4TECH will present a new study on GHG emissions from road transport by 2030.
Look forward to seeing you at the Residence Palace on 19 November!
After two intense weeks of confirmation hearings in the Parliament, highly political discussions in Brussels, Strasbourg and EU capitals and after a mini re-shuffle of portfolios, the Junker Commission has been confirmed by the Parliament.
It was described by Mr Juncker himself as the “last-chance Commission”.
I can only agree with him. To regain trust, the EU needs to demonstrate its commitment to ‘Better Regulation’, as well as consistency and ambition in the policy proposed.
When it comes to climate and energy policy however, Mr Juncker’s team failed to go down that ambitious route by omitting an important contributor to future emission reductions in transport: biofuels.
I can only express concerns and regrets about this oversight.
At the hearings, discussions largely focused on the 2030 Climate and Energy targets and the ETS reform, but there was no meaningful debate over the role that transport can and should play in meeting these overall emission reduction targets. Remember that transport represents as much as 30% of EU greenhouse gas emissions!
We now have no fewer than three relevant Commissioners for biofuels: Maroš Šefčovič (Vice-President for Energy Union), Miguel Arias Cañete (Energy and Climate Commissioner) and Violeta Bulc (Transport Commissioner). However, none of them stressed the role of biofuels in helping the EU deliver on its 2030 climate and energy agenda.
Comments on the absence of transport-specific targets in the 2030 Climate and Energy package were voiced a few times by MEPs but received no concrete answers from Commissioners-designate.
Mr Šefčovič, who becomes Vice-President for the Energy Union, underlined his reluctance towards first generation biofuels, due to concerns around their GHG emission reduction performance and on their impact on food prices. On the other hand he supported second-generation biofuels and stressed the need to quickly reach a compromise on the ILUC proposal. As said before, biofuels urgently need regulatory certainty. But it doesn’t mean that policymakers should hastily close a deal. The second reading should provide opportunities for a more nuanced approach.
As for Mr Cañete, our new Energy and Climate Commissioner, he did not even mention biofuels during his hearing and carefully avoided questions on a new target for renewable energy in transport post-2020.
Ms Bulc, the new Transport Commissioner, did quickly stress her commitment to introduce a fair share of alternative fuels and renewables in the transport sector, without further details on how she would make this possible.
As the second reading of the ILUC file is soon to start in the Parliament and the Council, it is critical for the Commission to play a strong role in driving the dossier to a satisfactory close.
In the Parliament, the rapporteur Nils Torvalds wants discussions to resume quickly. But the Council is now only scheduled to communicate its common position in January, which means the second reading examination will be delayed in the Parliament.
In the Council, strong divergences amongst Member States led to a rather weak agreement. The Italian Presidency gave low priority to the issue and the dossier will likely be handed over to Latvia in January.
Once again, I ask policymakers to give a new impulse to the policy debate on biofuels and work together for a solution which takes into account the role of transport in reducing emissions and the environmental contribution of biofuels such as sugarcane ethanol. A more comprehensive analysis on the unbalance between diesel and gasoline in Europe is needed and low-ILUC biofuels should be incentivized in a decisive way. Disruptive measures affecting first generation biofuels will only harm the entire biofuels sector, making it difficult to invest in advanced biofuel technologies.
I hope this argument will be raised at the European Council this week and form part of discussions on the 2030 framework for climate and energy.
A policy framework for biofuels post-2020 is needed, or we will lose a major instrument to reduce emissions in transport. It is the missing link of the new Commission’s agenda.
After an intense summer break, which saw Brussels far from quiet but rather busy speculating about the nominations to top EU posts, business has resumed in the institutions.
In the Parliament, the Environment committee has already met to vote on the questionnaire to be addressed to the Commissioner-Designates for Environment and Climate in upcoming hearings. The committee will soon reopen discussions on the ILUC proposal in second reading, under the leadership of the new rapporteur, Nils Torvalds, and newly designated shadow rapporteurs such as Christopher Fjellner for the EPP. As I mentioned already in previous posts, in second reading only the leading committee is involved in developing the Parliament position and the associated Committee (ITRE) is only entitled to propose amendments ahead of the plenary vote.
Member States, which agreed on a Council position on 13 June, have not yet transmitted their common position to the Parliament. We hear that this will only happen in November. All this tells me that Member States are not particularly eager to resume what they see as a controversial debate. With such a sluggish approach, the file is unlikely to see a conclusion before mid-2015.
Once more: delay, delay, delay! Despite the ticking clock in the background, EU policymakers fail to realise the urgency of the situation.
A report published at the end of August highlights the consequences of these inconsistent and delayed policies – in the EU and elsewhere. In its 2014 medium-term forecast on Renewable Energy, the IEA notes that “biofuels for transport face a slower growth and persistent policy challenges”. The lack of clarity in how the EU aims to address the sustainability of biofuels and the difficulty in foreseeing a rapid epilogue to the ILUC proposal have a clear detrimental impact on the biofuels industry, which is in no condition to plan long-term investments.
Even the Commission, which initially put forward the legislative proposal to fix the ILUC issue, now seems to be turning its back to the whole debate. It appears that the line of the new Transport Commissioner for the next five years will be to focus more on alternative fuels (EVs, LNG, CNG, etc) than on biofuels, given the legislative uncertainty on ILUC.
Bottom line, the climate around biofuels seems even more complicated than before the summer. Policy makers are taking time and industry is struggling. The EU should decide a line of action and implement it if it wants the biofuels industry to be able to help in the decarbonisation of transport and in the development of advanced biofuels. A more balanced approach is necessary to allow good biofuels (whether conventional or advanced) to contribute to the fuel mix and align Europe with other countries where gasoline is preferred to diesel and higher blends of ethanol are in use.
Until a more balanced approach is adopted, the clock will continue to tick - worryingly so.
After a short break occasioned by the European elections in May, it will soon be time for new and returning Members of the European Parliament to embark on second reading discussions on ILUC. Member States adopted their common position on 13 June and, as soon the text is presented to MEPs in Plenary, the second reading phase will start. In this important new step of the process, UNICA would like to send a few words to the members of the recently formed Environment Committee, who will have a special role to play on the dossier in the second half of the year.
Dear Members of the Environment Committee,
As you are aware (or soon will be), the ILUC proposal, described by the Commission as a tool “to limit global land conversion for biofuel production, and raise the climate benefits of biofuels”, has been subject to discussions for already 18 months. The proposal has triggered heated debates and to date the positions of the three institutions still diverge. After a first reading position was adopted in the Parliament last September, Member States’ Energy Ministers reached a common position on 13 June, driven by the Hellenic Presidency. Where have discussions led to? Member States proposed a cap on conventional biofuels at 7% and a non-mandatory sub target for advanced biofuels at 0.5%, while the Parliament favoured a 6% cap on conventional biofuels and a 2.5% sub-target for advanced biofuels in 2020.
As if the gap between Parliament and Council was not clear enough, a group of 8 countries (Czech Republic, Estonia, France, Spain, Hungary, Poland, Romania and Slovakia) sent a declaration to the Greek Presidency right before the June Council meeting stressing that the 7% cap was an absolute red line and that any tripartite agreement on a lower cap would not be acceptable.
We were glad to see Member States realise how important it is to provide certainty for investments by keeping a cap at least at 7%. However, we still think the cap is not the best way to tackle the ILUC issue and that a more balanced and nuanced approach is to be found. The Council’s common position will now be subject to your amendments and eventually to tripartite negotiations. You probably remember how tight the vote was last year - the position could only be adopted in plenary by a slim margin of 29 votes, with a majority composed by ALDE, S&D, Greens and GUE/NGL. In this Parliament more than half of members are newly elected and a new majority will need to be formed to reach an agreement in second reading. UNICA counts on the new rapporteur, still to be appointed, to bring negotiations to a close as quickly as possible, in cooperation with the Italian Presidency. If the EU is serious about reducing transport emissions, agreement must be found shortly to provide sustainable biofuels with the certainty they need on EU markets.
From our side, we will use this occasion to reiterate once more that a biofuels policy based on a cap on all conventional biofuels doesn’t provide the necessary instruments to really identify and encourage biofuels that are performing better in terms of CO2 emission reductions. With its black and white approach, the Council’s common position does not acknowledge the sound environmental performance and sustainability of certain conventional biofuels, like Brazilian sugarcane ethanol, and fails to promote their use even when they have superior environmental credentials when all emissions and environmental factors are taken into account.
Of note, a dedicated 7.5% sub-target for renewable energy in European petrol, as adopted by the previous Parliament in September 2013, is essential because it will help the EU to reach more cost-effectively its GHG emission savings target and in a more environmentally responsible manner.
We also strongly support the development of new and innovative biofuels technologies and we suggest a better incentive system than double-counting and a modest 0.5% sub-target. For stimulating the production and consumption of advanced biofuels, we will advocate for a sub-target for advanced biofuels of at least 2% by 2020.
We hope that the result of upcoming negotiations will bring us to a more nuanced outcome for biofuels policy and we hope that MEPs will bring to the debate on the 2030 framework the important topic of a specific target for renewables in transport post-2020, as we believe it would trigger innovation in the advanced biofuels sector.
Head of International Affairs, UNICA