ePURE calls for modeling European biofuels policy after the RFS
The European Renewable Ethanol Association, ePURE, has released results of a study that determined the double counting mechanism proposed by the European Commission to spur production of advanced biofuels is ineffective. Rather, the organization is called for a dedicated sub-target for these fuels under the Renewable Energy Directive.
The report released by ePURE, titled “Double Counting, Half Measures: Study on the effectiveness of double counting as a support for advanced biofuels,” is based on the study “Effectiveness of the Doubt Counting Mechanism,” which was commissioned by ePURE and conducted by Meo Carbon Solutions. Novozymes provided financially support for the study.
According to the report released by ePURE, the RED has implemented double counting of certain biofuels with the aim of diversifying the raw materials used to produce biofuels. The double counting mechanism is intended to provide compensation for the higher production costs associated with processing new feedstocks. The report notes that double counting is, to date, the only dedicated support mechanism established in the E.U. for cellulosic biofuels. According to the study, quadruple counting is also being proposed by the commission for some feedsocks.
While the goal of multiple counting of these fuels is to support the development of new technologies and new advanced biofuels, the report stresses that double counting has, to date, provided nearly exclusive benefit to biodiesel producers using used cooking oil and animal fats as feedstock. However, the techniques used to convert these oil and fats into biodiesel do not require new or sophisticated technology.
The report finds that the double counting measures have been ineffective at broadening the feedstock base and enabling technology innovation. In addition, the research points to market distortion impacts. According to the report, the European Commission provides only a non-exhaustive list of wastes and residues, which is insufficient to give guidance on how to implement the measure and on which feedstocks are eligible for doubling counting. “As a consequence member states implemented the measure quite differently,” said the researchers in the report. “Biofuels can count double in one member state but not in another. Therefore, the international market becomes distorted with serious consequences in terms of availability of raw material and international trade.” In the report, ePURE also notes that the economic value of double counting measures also leads to a risk of fraud.
According to the report, double counting does not create bankable value, and is therefore ineffective at alleviating investor risk associated with investing in first-of-kind plants. Furthermore, double counting actually reduces the quantify of biofuels on the market, causing less fossil fuel to be displaced and fewer greenhouse gas savings to be realized.
Rather than the double counting measures, ePURE has proposed that the incentives for advanced biofuels in the E.U. be modeled more closely to the U.S. renewable fuel standard (RFS) and other U.S. incentive programs. Specifically, ePURE is encouraging the development of mandatory sub-targets for particular production pathways, tax incentives, feed-in tariff provisions, incentives for feedstock collection, investment support for first-of-kind plants, and government loan guarantees.
“Commercial plants are now being built to produce cellulosic ethanol outside of Europe thanks to more attractive policy frameworks,” said Lars Hansen, regional president of Novozymes Europe. “With the ongoing discussions of [indirect land use change] and the preparation of a 2030 framework for climate and energy policies, the E.U. has a unique opportunity to get its biofuels policy right and to give a clear signal by setting up an ambitious but achievable target for advanced biofuels up to 2030.”