Government biofuels Policies

The impact of increased switching to biofuels,

biodiesel and alternative energy products

Brussels – Platts Refining Conference September 29, 2016 Raffaello Garofalo, Secretary General EBB

Main points covered

1. Status quo of the European Biodiesel industry

2. The three main political impacts and challenges for biodiesel i. Transport sector is the GHG problem of the EU ii. There is no alternative (such Electrification) to biodiesel for Heavy duty and buses iii. Security of supply and diesel deficit

3. The sustainability challenge and EU legislative perspectives

4. International trade implications (unfair competition, risks of untrustworthy declarations)

5. The “made in Europe” traceability answer

6. Advanced biodiesel deserves an extra support and advanced biofuels need a definition

EBB Members

NEOCHIM

Assocostieri

Green Biofuels

Ireland Procera

Estimate of EU biodiesel and HVO production 2013-15

2013 2014 2015

Millions Tonnes

Main EU Biodiesel and HVO Producers 2014-15

2014 2015

‘000 tonnes – only 2015 figures are detailed * country figures include HVO

Biodiesel and HVO Feedstock - estimate 2015

Renewable diesel long-term added value for Europe three Main wide political impacts and challenges:

1. Transport sector is the real long term problem to reduce GHG emissions in Europe

2. Light and Heavy duty road transport, Aviation and Maritime transport are the three main sectors where changes are more needed and critical - renewable diesel fuels are needed (FAME for light/ heavy duty and HVO ideal renewable jet fuel)

3. Security of supply: Europe is traditionally short in diesel: a progressively stronger trend

Transport sector is the challenge for EU CO2 Emissions

CO2 Emissions (*) by Sector – EU-28 MILLION TONNES

Variation 1990-2012

CO2 Emissions from Fuel combustion by sector

Source: Railway Handbook 2012, IEA

Road and Aviation Transport are the challenge for EU CO2 Emissions

Road Transport: Diesel and Heavy Duty are the challenge for biofuels

Road Transport: Diesel and Heavy Duty are the challenge for biofuels

Road Transport: Diesel and Heavy Duty are the challenge for biofuels

Future EU Road Fuel Mix (based on EU Commission Primes Model)

Future Fuels and Biofuels demand and EU Security of Supply

0

50000

100000

150000

200000

250000

300000

350000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Ene

rgy

(kto

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Road Transport - Fuel Mix

electricity

liquified hydrogen

ethanol

methanol

natural gas

residual fuel oil

diesel oil

kerosene

gasoline

liquified petroleum gas

hard coal

Trade: biodiesel and EU security of supply

The sustainability challenge and Post-2020 and legislative perspectives

Consequence of what explained till now : a « phase out » of biodiesel does not make

any economic and geopolitical sense: biodiesel has a strong added value

Sustainability Challenge: GHG LCAs of fuels/biofuels need to be more transparent o Today two fossil fuel references o Actual values measures in Germany see biodiesel above 70% GHG reductions

ILUC: a never-ending embarrassing and non-transparent debate:

o What is the added value of ILUC for Europe? o Why is ILUC only applied to biofuels? o Why ILUC values in US transparent studies are 10X lower than in the EU? o Can EU make legislation based on:

• data and figures with up to 300 or 1000% approximation? • Non-transparent studies of “low-academic value” as confirmed by the Commission

itself?

Identify an EU-wide consistent and long-term Policy Mix to support renewable fuels o Mandatory targets can continue? o Mandatory blending is probably an option o Mandatory GHG emission reductions (FQD, Germany) o Detaxation measures? o Per Transport Mode Sectoral targets (Aviation, Heavy Duty, Buses, Navigation, etc. )

International biodiesel trade • Two ongoing WTO Panels vs Indonesia and Argentina • 13 EU Court cases vs Indonesia and Argentina • Appeal on the first instance judgement of the EU Court • Continuous cases of unfair competition

EU commercial issues

• Poland • Double Counting and biodiesel from waste and residues • Need of traceability – RBO system to counter frauds

International trade implications

(unfair competition, risks of untrustworthy declarations)

The “made in Europe” traceability answer

1. An answer for sustainability (guarantee of origin) and for quality (the quality of the final renewable diesel depends a lot on the raw material employed and on their origin)

2. An answer against unfair dumped exports of FAME or HVO in the EU

3. An answer of transparency and to avoid frauds and circumvention spoiling the market

4. A tool to counter untrustworthy declarations for “double counting” or extra incentivised advanced biofuels tomorrow (under RED II)

CONCEPT: a Database Register guranteeing the origin of the raw materials and tracing them along the production and trading chain till the final consumer (sub-scheme EU-wide database)

www.biofuelsregister.eu Such a database already exist: in France is adopted by advanced biodiesel producers and under scrutiny for legislative adoption by the French government

Advanced biodiesel deserves an extra support and

advanced biofuels need a definition

A list of technologies or raw materials is not a definition, a definition is needed

Proposed definition : Conventional biofuels 1st generation: biofuels having some impact on food crops Advanced biofuels (with a separate advanced target) 2nd generation: with high sustainability, with no impact on food crops, with mature technologies 3rd generation: with high sustainability, with no impact on food crops, with non-mature technologies (need further support and separate sub-target under advanced) 4th generation: with high sustainability, with no impact on food crops, with technologies under R&D stage (need further support and separate sub-target under advanced)

EU Transport cannot be left aside of decarbonisation – GHG emissions have to be cut also where it is more expensive

A separate target for transport is necessary (if we want to be credible in decarbonising our economy: see ambitious G7 targets before Paris)

Main key concepts for transport decarbonisation post 2020: 1. Specific transport targets: defined till 2020 need to be confirmed – as emission and

renewables objectives - (need for consistency: credible policies and investment)

2. Sectoral approach: there is no alternative to biodiesel and renewable diesel molecules in heavy/light duty, aviation, maritime (more than 50% of EU transport)

3. A transparent EU-Wide database for guaranteeing the origin and the traceability (as a sub-scheme) – for more transparency, avoid flood of dumped materials, frauds on advanced

Conclusion:

EU Renewable Fuels Perspectives in 2020-30

Thank you for you attention

www.ebb-eu.org