LONDON — In advance of a vote on a European directive that will shape the Union’s future policy for biofuel use in the transport sector, an annual report published today by renewable energy analysis group EurObserv’ER shows a far from booming market.
Despite ongoing uncertainty around biofuels legislation, EurObserv’ER’s Biofuels Barometer called market growth solid, finding that incorporation of biofuels into Europe’s transport sector grew to almost 14.4 million tonnes of oil equivalent (toe) last year, a year-on-year increase of 0.4 million toe. But, the Barometer pointed out, this figure continues previous years’ weak growth, with consumption in the transport sector growing by just 2.9 percent in 2012.
The group offers a double explanation for the sluggish growth: that the economic crisis has forced some importing countries to reduce the level of biofuel they can incorporate into their transport sectors, and that uncertainty surrounding forthcoming legislation has slowed the market.
Binding legislation that allows biofuel incorporation to be counted toward a Member State’s renewable energy target only if it is certified as sustainable has directly led to two consecutive years of “plunging” growth, according to EurObserv’ER. Europe’s biofuels industry has been hit hard on two fronts, the group says: with political pressure toward curbing the use of first-generation biofuel in response to the food vs. fuel debate, and with what the group calls “unfair competition practiced by the world’s other major producer regions”.
So-called indirect land use change (ILUC) factors – a measure of the unintended consequences of replacing food crops with energy crops, including emissions from the clearing of forest land, peat bogs, wetlands or grasslands – are also a factor. Proposed amendments to the Renewable Energies and Fuel Qualities Directives would cap the allowable share of first-generation biofuels at 5.5 percent and factor ILUC consequences into emissions calculations. This “would effectively put a stop to the development of first-generation production sectors,” EurObserv’ER says, pointing out that ILUC will have the greatest impact on biodiesel.
The EU’s previous target managed to stimulate first-generation biofuel development and offered growth potential, toward which Europe invested heavily in production capacity. Biodiesel was a good choice for investment, EurObserv’ER said, given diesel’s high level of penetration in the European fuel mix. But under the proposed new targets industry will be unable to recoup much of its investment due to limited growth prospects, the report predicts, and industry groups say 120,000 jobs will be lost across Europe.
In the wake of these issues, EurObserv’ER found uneven growth in the biofuel market across the EU. Fourteen countries increased their biofuel consumption in 2012 (notably Spain, France, Sweden and Finland), while in 10 countries (such as the UK, Hungary, Poland and Italy) consumption decreased. The rest did not incorporate biofuel into their transport fuel mix last year.
EurObserv’ER reported the breakdown of biofuel consumption to be basically unchanged from previous years: biodiesel stood at 79.1 percent, bioethanol at 19.9 percent, and pure vegetable oil and biogas at 1 percent.
Under the Renewable Energy Directive, sustainability reporting is now necessary for the biofuel used by a Member State to count toward its renewable energy target. EurObserv’ER surveyed the Member States in June, finding that, in 2012, sustainably-produced biofuel accounted for 8.2 million tonnes of oil equivalent (mtoe) or 57 percent of total consumption. In most countries reporting, almost all biofuel consumption is now certified.
The Barometer found that Germany maintained its lead in biofuel consumption, with a slight increase in 2012 after a decline in 2011. The nation used 2,190,767 toe of biodiesel; 805,460 of bioethanol and 22,093 of pure vegetable oil last year, and all of its consumption was certified. In addition, biofuel’s share of total German road fuel consumption rose 5.7 percent from the previous year. EurObserv’ER predicts that this share will continue to rise with Germany’s increasing consumption of E10, a fuel containing 10 percent bioethanol. However, despite the growth in consumption, the environment ministry’s working group on renewable energy statistics reported that the number of jobs in the biofuel sector was down 500 on the previous year.
France emerged in the Barometer as Europe’s top consumer of biodiesel in 2012, at 2,299, 800 toe. The nation also used 417,600 toe of bioethanol, a 12 percent year-on-year increase. All biofuel consumption was certified. The biofuel incorporation rate in mainland France’s road transport sector is 6.8 percent, one of the highest rates in Europe. In September 2012 a new government action plan for agriculture stipulated a maximum first-generation biofuel incorporation rate of 7 percent, although the measure does not affect the growing distribution of E10 in filling stations. France’s 10 percent target should be achieved through development of second- or third-generation biofuels and through EVs or hydrogen-power vehicles, EurObserv’ER predicts.
Spain, the third largest biofuel consumer in Europe, was the only nation where growth remained buoyant, using 1719 ktoe of biodiesel (an increase from the previous year) and 209 ktoe of bioethanol (a decrease of 18.4 ktoe), with a 7.3 percent incorporation rate in the transport sector and 13.3 percent overall growth. France’s biofuel was not sustainability certified in 2012, since sustainability criteria went into effect in January of this year.
Sweden, with the highest biofuel incorporation rate in Europe, is aiming for 100 percent of vehicles on its roads to use clean energy by 2030. The Barometer showed a 1.5 percent increase in the nation’s biofuel consumption from the previous year. In 2012 its sustainable certified biofuel consumption was 91 percent or 348,442 tonnes of biodiesel; 321,863 tonnes of bioethanol and 83.3 million m3 of purified biogas. Sweden offers tax exemptions for green cars and subsidies for biodiesel-using filling stations, among other support measures.
Lead image: Biofuel via Shutterstock