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Consultancy on issues related to emissions reduction and environmental protection, with a focus on policy and sustainability for conventional and alternative liquid fuels.

Lobbying Activity

Response to ReFuelEU Aviation - Sustainable Aviation Fuels

6 Apr 2020

The ReFuelEU inception impact assessment is a solid starting point to raise EU ambition on alternative aviation fuel. The document correctly states the nature of the challenge, and that the priority at the moment is to support the early stage roll out of advanced SAF production. The easiest alternative aviation fuel (AAF) pathway to expand under current conditions would be HEFA from vegetable oils, but this pathway requires either food oils as feedstock or the diversion of residual and by-product oil resources that are often already efficiently utilised in environmentally responsible applications, including the EU’s own waste oil to biodiesel industry supplying the on-road sector. Using public policy to move these resources from on-road to aviation use will deliver no significant net environmental benefit, and would fail to support the fuel-synthesis technology developments required for a truly largescale SAF industry. Policy support under ReFuelEU should therefore exclude HEFA fuels, targeting only technology pathways that have better potential scalability in the long term (primarily cellulosic drop-in biojet and electrojet). Several policy options are suggested. Of these, I would strongly favour an auctioning mechanism as an initial approach. As argued in the attached document (‘Building the perfect beast – designing advanced biofuel policy to work’) mandating specific volumes of advanced alternative fuel production has been repeatedly unsuccessful. Setting mandates can provide a false sense of confidence that investment will occur and precise volume goals will be met, when history teaches us that AAF mandates may well not be achieved. With high capital expenditures and high cost of capital for novel technologies, providing value certainty should be a priority. An auctioning system would be much more effective in providing short-term certainty than a mandate. It should be noted that any SAF facility will produce hydrocarbon co-products for on-road or chemicals use – an auction scheme should consider offering a guaranteed price across the whole produced volume, with a minimum required output share of jet (e.g. 40% by volume). An auctioning mechanism can be used to implicitly guarantee the value from the RED II (by guaranteeing a minimum total value recovery from fuel sales + RED ‘credits’ received – the precise mechanism to deliver value from RED II will vary across Member States). Once an initial group of facilities is successfully producing advanced AAFs this will reduce the costs for future investments (through reducing actual costs by learning and reducing capital charges by demonstrating technology viability), at which point the advanced target in the RED II will become effective at sustaining and increasing production. The current multiplier for aviation fuels in RED II is reasonable, and need not be revised unless clear evidence is provided that there is an additional climate benefit of over 20% from reduced contrail formation when using synthetic fuels. Achieving improved precision in measuring non-CO2 advantages of AAF use should be a research priority. I do not agree that in the short- to medium-term there is a need to ‘prioritise’ feedstock for aviation biofuels. It has been demonstrated repeatedly that there is enough Annex IX part A feedstock available in Europe (e.g. see the ‘Wasted’ report by European Climate Foundation) to meet demand consistent with meeting any sensible 2030 target. Supply chains will need to be developed, but the fundamental current challenge is investment, not feedstock availability. If HEFA fuels were supported under ReFuelEU there would indeed be competition for waste/residual oils and fats, but as noted above I believe that supporting HEFA fuels within a new scheme would be at best a distraction from the technology development required in the longer-term, and at worst would do extreme damage to the waste/residual oil biodiesel industry for no meaningful environmental benefit.
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Response to High and low Indirect Land-Use Change (ILUC) - risks biofuels, bioliquids and biomass fuels

28 Feb 2019

Dear Commission, Thank you for the opportunity to comment on the draft delegated act on high and low ILUC-risk bioenergy. We have attached more detailed comments on the draft in a Word file, but in particular would like to emphasise our concerns about the potential creation of a large loophole in the low ILUC-risk certification requirements that on face value would appear to potentially neuter the environmental value of the high ILUC risk mechanism. By identifying all agricultural expansion onto unused land as an 'additionality measure' with no requirement for a consideration of a counter-factual reference case, the Directive currently defines business as usual plantation expansion on the agricultural frontier as 'low ILUC-risk' provided it does not directly affect high carbon stock areas. Thus, for instance, something like half of all palm oil expansion over the coming decade would be definable as low ILUC-risk, despite the fact that much of this expansion will happen entirely independently of the EU biofuel market. This potential for certification of business-as-usual expansion creates a large free rider potential, in which material from new plantations can be 'cherry picked' in a largely paper shuffling exercise to be identified as exported for use in the EU biofuel market, while material from old plantations or high carbon stock land goes to food markets or for biofuel production elsewhere. This free rider potential is likely large enough to meet all EU demand for palm oil for biodiesel without any real reduction in ILUC being delivered. The introduction of a low ILUC-risk certification requirement without further restriction of the sourcing of material from new land at the agricultural frontier would not only undermine the environmental goals of the recast RED, it would inevitably set in motion another decade of policy squabbling and revision. Renewed policy uncertainty can only hinder investments in truly sustainable advanced biofuels. Specific comments on other elements of the draft delegated act are included in the attached document.
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