REA welcomes political agreement on EU biofuels policy

The EU Energy Council has reached political agreement on measures to incorporate indirect land use
Renewable Energy Associationchange (ILUC) into EU biofuels policies, effectively bringing a close to almost two years of investment-blocking policy paralysis in the low carbon fuels sector.

The key elements of the compromise package are:

  • A 7% cap on transport energy from crop-based biofuels
  • Mandatory reporting of ILUC factors for crop-based biofuels
  • Multiple counting of transport energy sources towards EU renewable transport target and overall renewable energy targets:
    • biofuels from non-crop feedstocks (including used cooking oil and tallow) at x2
    • electric rail at x2.5
    • electric vehicles at x5
  • A target of 0.5% transport energy from advanced biofuels from non-crop feedstocks (excluding used cooking oil and tallow)

While the REA continues to oppose the use of ILUC factors in greenhouse gas accounting for biofuels, these proposals should give the existing biofuels industry room to grow and invest in the development of advanced biofuels with even greater greenhouse gas savings.

The REA also remains opposed to multiple counting towards the overall renewable energy target, as this effectively reduces the requirements for renewable heat and/or power, without actually reflecting a real increase in renewable transport energy.

These proposals will go to second reading in the new European Parliament before becoming law.

All EU Member States are committed to securing 10% of transport energy from renewable sources, such as biodiesel, bioethanol and biomethane, by 2020. The UK Renewable Transport Fuel Obligation (RTFO) is currently set at 4.75% (by volume – equivalent to 3.8% by energy). The Government has previously stated that it would not raise the RTFO beyond this year due to the ongoing uncertainty over the European ILUC dossier. With ILUC now resolved, the REA calls on the Department for Transport to set out the RTFO to 2020 to give our members the policy framework they need to secure investment in both current and advanced biofuels.

REA Chief Executive Dr Nina Skorupska said:

“This is a compromise that will frustrate parties on both sides of the debate, but the overriding feeling is one of relief that the ILUC saga is finally drawing to a close.

“Our members and stakeholders have grappled with this issue for several years, when they would rather have been focusing their efforts on creating jobs in sustainable biofuel production. We urge the Government to get its own house in order now so that the transport sector can get the low carbon momentum back on track and catch up with the progress being made in renewable heating and electricity. ”

Ministers also debated the 2030 energy and climate change framework and the EU energy security strategy. The REA continues to push for nationally binding renewable energy targets in the 2030 energy and climate change framework (which is expected to be finalised by October) to maximise the contribution of renewable power, heating and transport fuels towards climate change mitigation and improved energy security.

This would provide the clearest market signal to renewable energy investors, reducing risk and cost of capital and unlocking job creation opportunities. Faster deployment will also accelerate cost reductions, with some technologies on track to reach price parity with fossil fuels, and no longer require subsidy, even before 2030.

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