The fuel quality directive or how to deal with biofuels and the climate impact of transport fuels

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The fuel quality directive - or how to deal with
biofuels and the climate impact of transport fuels

• Jos Dings
• Hart World Refining Fuel Conference, Brussels, 9
  May 2007

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TE Europes umbrella NGO for sustainable
transport

• 49 Members in
• Austria
• Belgium
• Czech Republic
• Denmark
• Estonia
• France
• Germany
• Greece
• Hungary
• Italy
• Netherlands

• Netherlands
• Norway
• Poland
• Portugal
• Romania
• Russia
• Slovenia
• Spain
• Sweden
• Switzerland
• UK

Russia!
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Overview

• The great vapour pressure giveaway
• The lifecycle greenhouse gas target, or low
  carbon fuel standard
• Developments in oil and alternatives
• Issues with quantity-based biofuel target
• Why a low carbon fuel standard is the way forward

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The great vapour pressure giveaway

• FQD provides for waiver for RVP as function of
  ethanol content
• Counterproductive, unnecessary, inefficient and
  unfair
• Counterproductive should biofuels lead to 200
  extra deaths from worse air ?
• Unnecessary butanol and ETBE do not lead to
  higher RVP
• Inefficient regulator picks a winner and
  intervenes in competition between biofuels
• Unfair other, also 2nd generation ! - biofuels
  can do the same or a better job and do not get
  such favourable treatment
• TEs view is technology-neutral,
  performance-based standards - no waivers

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Developments in oil and its alternatives
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pressure in oil market leads to rush for
alternatives
TAR SANDS
COAL

• Syncrude

• Coal-to-Liquids

CONVENTIONAL CRUDE OIL
BIOMASS
NATURAL GAS

• Gas-to-Liquids

• Biofuels

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• PROCESS

• END USE

CO2
CO2

• Crude Oil (avg.)

CO2
CO2
CO2
CO2
CO2
CO2
CO2

• Biofuel (good)

CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2

• Biofuel (bad)

CO2
CO2

• Tar Sands

CO2
CO2
CO2
CO2
CO2
CO2

• CTL

CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
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Quantity policy for biofuels
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The main issues associated with biofuels

• cost and performance in terms of avoided
  CO2-emissions is unfavourable for many biofuel
  routes

• Space requirement approx. 1 (European !) football
  pitch per car (some routes more, others less)

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Quantity policy

• 10 volume target for 2020 decided subject to
  production being sustainable, second-generation
  biofuels becoming commercially available
• Market production of a litre of biofuel as
  cheaply as possible, regardless of environmental
  impact
• Government / NGOs certification on minimum
  environmental standards

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Problems of biofuel quantity policy

• Only addresses biofuel, not other hydrocarbon
  alternatives
• Neither fossil nor biofuel part of the market
  faces carbon responsibilities
• Does not stimulate better biofuels extra
  regulation necessary

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Climate quality policy for transport fuels
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New policy based on quality

• 9 January Schwarzenegger proposes Low Carbon
  Fuel Standard (LCFS)
• Well to Wheel greenhouse gas emissions per
  litre of petrol and diesel -10 in 2020
• 31 January Commission proposes reviewed fuel
  quality directive, including lifecycle greenhouse
  gas target for petrol and diesel
• Similar targets

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What does this quality approach imply ?

• More climate effect and -certainty
• Options for reducing 10 by 2020
• Improve oil production process (no tar sands, no
  CTL, no flaring, 1-2 ?)
• Improve refineries (1-2 ??)
• Efficient biofuels (6-8 ??)
• Other options (LPG, CNG, biogas, electricity,
  hydrogen ? (0-1 ??)
• Burden of proof rests with fuel supplier
• If no reporting worst case assumption
• Supplier can gain carbon points by proving the
  fuel is better through a properly audited
  reporting trail

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What does this quality approach imply ? 2

• Market incentive 1 produce as cheaply as
  possible a tonne of greenhouse gas reduction
• A litre of biofuel with 80 climate effect is
  worth 4 times more than a litre with 20 climate
  effect
• Market incentive 2 climate certification of
  biofuel (business necessity ad opportunity,
  rather than of threat)

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Advantages quality approach over quantity approach

• More effective and efficient climate policy
• More choice for fuel suppliers also helps
  energy security
• Quicker transition to 2nd generation biofuels
  fewer food security issues and better image for
  biofuels
• Petrol and diesel based on unconventional oil
  will become unmarketable in Europe and California
  a second-class product

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Which target could dominate ?

• Figures are purely illustrative

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Of course it does not solve all problems

• Biodiversity
• Water use
• Food competition
• ....
• ...but a climate quality approach to transport
  fuels tackles many problems at the root (the
  market), rather than end of pipe

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Conclusions

• The vapour pressure increase for ethanol is
  unfair and unnecessary biofuels policy should
  be technology neutral
• Besides biomass, also tar sands and
  coal-to-liquid will become an important source
  for transport fuels - if unaddressed !
• A low carbon fuel standard gives the oil and
  biofuel industry a market based technology
  neutral incentive to come up with the best
  solutions for the climate, and deserves broad
  support

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Thank you for your attentionFor more
informationwww.transportenvironment.org