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!
A seasoned professional specializing in international trade policy, Géraldine Kutas leverages over a decade of experience to strengthen UNICA’s activities across the European Union, the United States and Asia. She has a deep expertise in biofuels and agricultural policies, coupled with extensive exposure to multilateral and regional trade negotiations in agriculture. Ms. Kutas is the author and co-author of several international publications on these topics.
Before joining UNICA, she was a researcher and a professor at the Groupe d’Economie Mondiale at Sciences Po(GEM), Paris, and coordinator of the European Biofuels Policy research programme (EBP). Ms. Kutas has also worked as a consultant at the Inter-American Bank of Development and for agro-business firms.
Ms. Kutas has a Ph.D. in International Economics from the Institut d’Etudes Poliques de Paris and a Master degree in Latin American Studies from Georgetown University, Washington DC.
