The role of biofuels in climate change and energy security

The energy crisis triggered by the war in Ukraine clearly confirms how reliant Europe, especially Germany, has become on fossil-based oil and gas supplies from Russia that must be replaced by new supply partners.

“This dependency clearly weighs on national budgets and on households across the European Union. If we continue to rely on fossil energy sources instead of switching more rapidly to renewable energies in all sectors, it will be virtually impossible to attain the more rigorous climate change mitigation targets and the higher share of renewable energies envisaged by 2030 in the recast European Effort Sharing Regulation and the Renewable Energy Directive (RED III),” said as Artur Auernhammer, chair of the German Bioenergy Association, Bundesverband Bioenergie eV (BBE).

Sustainable biofuels are currently essential for climate protection in transport: biofuels reduced CO2 emissions in the transport sector by around 11.1 million tonnes in 2021. That figure corresponds to the volume of greenhouse gas savings required to offset the forecast overshoot for 2022 in Germany’s Climate Protection Bill. As in previous years, biofuels made by far the largest contribution to reducing greenhouse gas emissions in the transport sector. The average saving achieved by using biofuels rather than fossil fuels rose to 84% in 2021, from 83% in 2020.

“With the introduction and gradual increase of the greenhouse gas quota obligation, rigid quota requirements concerning an energy basis for biofuels have been replaced by the efficiency-based competition that this triggers. This effect, which is viewed positively in terms of resource policy, reduces the physical quantities required to meet the quota obligation. This effect is reflected in the feedstock composition of the biofuel volumes credited as offsets. The German legislation therefore serves as a model for the thrust of climate change mitigation policy in the transport sector in other EU Member States. Climate protection in the transport sector is inconceivable without biodiesel, bioethanol and biomethane,” said Auernhammer.

The greenhouse gas (GHG) reduction quota mandates that the mineral oil industry to reduce greenhouse gas emissions from fuels by a specific percentage compared to 2010. Overall, the mineral oil industry has exceeded the German GHG quota in 2021. The most recent information from the Central Customs Authority (GZD) indicates that more than 15 million tonnes of CO2 reductions were consequently credited as offsets. This corresponds to a 7.26% reduction. At the time, only 6% was legally required. Surplus volumes may be carried over to subsequent years. Biodiesel, bioethanol and biomethane made the largest contribution, reducing greenhouse gas emissions by 11.1 million tonnes of CO2, while electromobility only accounted for savings of less than 25,000 tonnes of CO2.

“Biodiesel, bioethanol and biomethane are sustainable and form the backbone of greenhouse gas reduction in the mobility sector, and that will remain the case in the run-up to 2030,” said Auernhammer.

“We work on the assumption that raising the GHG quota will save a total of around 175 million tonnes of CO2 in the transport sector by 2030. 110 million tonnes of CO2 within this overall saving will be contributed by sustainable biofuels. In light of the potential of electromobility and fuel cells, it becomes clear that commercially available biofuels are essential in achieving the climate change mitigation goals,” he said.

Even if the ambitious electromobility targets are met in 2030, he added, it already appears probable that the bulk of the vehicle fleet will still be powered by combustion engines. “In Germany alone, more than 60 million combustion engines were registered last year. These vehicles also need to make a growing contribution to climate protection. That is why it is fitting to secure and supplement the contribution that commercially available sustainable biofuels currently make to climate change mitigation by expanding the use of advanced biofuels and, ultimately, also synthetic fuels. This requires a national fuel and powertrain strategy that encompasses all the reduction options in the tank and in the battery, while also ensuring that German Minister of Agriculture Cem Özdemir stops calling for biofuels from cultivated biomass to be left out of the picture.”

“The German government must not commit unilaterally to electrification. As matters currently stand, the taxpayers and climate change mitigation in the transport sector would lose out in that scenario. If German climate protection targets are not met, emission rights will ultimately have to be purchased from other EU Member States,” Auernhammer said, reiterating demands by the industry associations. For example, the German government had to purchase 11 million additional emission rights for 2013 to 2021, benefitting Bulgaria, the Czech Republic and Hungary, he added.

Sustainable biofuels also make an important contribution to energy and food security. Producing biofuels from sustainably certified oilseeds, sugar beet and feed grain generates, inter alia, high-quality protein feed and the bio-based commodity chemicals glycerol and ethanol. Processing these inputs thus benefits food security, thanks to domestic production as well as fostering the pivot towards a climate-neutral circular economy. The position recently proposed by the German Minister of Agriculture, advocating abolishing biofuels from cultivated biomass, also fails to take into account this “harvested yield,” said the BBE’s chair.

The industry associations further point out that biofuels had a positive economic impact to the tune of EUR4.97 billion (USD5.37 billion) in 2021. The entire production chain in the biofuel sector secures around 20,000 jobs, mostly in rural areas. Given the importance of sustainable biofuels in mitigating climate change and ensuring security of supply, the industry associations representing this sector called on the German government to pursue a reliable biofuel policy. This also applies to the upcoming development of a national biomass strategy, for which the first key points were presented in the autumn of 2022. This strategy must also factor in the efficient contribution to greenhouse gas reduction made by value-added chains involving biofuels for material and feed use that have also developed over decades, they said. Auernhammer pointed out that “the national biomass strategy must optimise the utilisation of existing biomass potential. Sustainable uses of cultivated biomass can also make a valuable contribution to climate and species protection in the future, while at the same time having a positive impact on food and energy production.”

The industry associations also called for reliable framework conditions for sustainable biofuels at the European level. The EU Fuel Quality Directive (FQD) and the EU Renewable Energy Directive (RED II) are important EU legislative instruments to decarbonise road transport. However, as indicated in a European Commission report, only 11 of the 27 member states have achieved the FQD’s target of reducing the greenhouse gas intensity of transport fuels and energy by at least 6%.

“Constant changes in EU biofuel policy and the resulting uncertain regulatory framework are crippling the potential of plant-based biofuels and the development of advanced biofuels, instead promoting virtual volumes of renewables due to multiplication factors. This will not enable the EU to reduce its dependence on fossil fuels,” said Auernhammer.

He urged the European Commission to immediately introduce penalties, as envisaged in the FQD, if any EU member states breach these targets, as a signal that action will be taken if targets are not met, to create the pressure required to achieve these goals. The BBE chair also emphasised that this should be done in view of the Council Presidency’s draft for the EU Energy Tax Directive (ETD), which treats sustainable plant-based biofuels like fossil fuels.

“That is incomprehensible and undermines the EU’s climate goals as well as its commitments under the Paris Agreement,” he said.

The industry associations representing the sector point out that ongoing discussions on revising the EU’s Renewable Energy Directive (RED III) as part of the EU’s Fit for 55 legislative package provide for a higher GHG reduction target for fuels: 16%, as proposed by the European Parliament or 13% as proposed by the European Council and the European Commission.

On January 23-24, 2023, the 20th International Congress for Renewable Mobility “Fuels of the Future” will take place in Berlin, Germany. It is the flagship event of the German, European and international biofuel industry and an important forum to discuss the development of renewable mobility.

The full programme and registration information can be found at www.kraftstoffe-der-zukunft.com.