To entirely electrify the transport sector will require time especially for the deployment of the right infrastructure. During this transition, low-carbon liquid fuels can represent a very efficient way to cut emissions from vehicles with an internal combustion engine.
For FuelsEurope, the voice of the European petroleum refining industry, no single policy will be sufficient to create momentum for change throughout a sectoral value-chain: close coordination and integration between policies that impact Original Equipment Manufacturers (OEMs), fuels, infrastructures and customer choices are needed.
CEENERGYNEWS spoke with Alessandro Bartelloni, FuelsEurope Director about the main advantages of low-carbon liquid fuels, what to expect from the upcoming EU directives’ revisions and the importance of taking into account the social aspect of the transition.
“As representatives of the transport industry (among others) we have to underline the importance of using low-carbon liquid fuels,” he begins. “Currently, 94 per cent of the fuels on the market are of fossil origin, therefore not sustainable.”
“The raw materials must be replaced, whether is sustainable biomass (for biofuels), recycled CO2 (for synthetic fuels) or waste (for waste-to-fuels). However, it is easier said than done as this transition also requires a huge economic effort.”
For Mr Bartelloni, we are not just talking about the aviation and shipping industries. Low-carbon liquid fuels would work also for trucks and road transportation especially in the short term while aviation and shipping come in the long term.
“The road fuels industry has many advantages, for example, the order of magnitude as it is a market which is bigger than the aviation and shipping ones,” he explains. “Additionally, the carbon price is already relatively high to justify using low-carbon fuels, while for shipping and aviation it is still quite low. What we are waiting for the policymakers to do is to create the right investment framework.”
FuelsEurope believes that the upcoming revision of the Renewable Energy Directive will create the best opportunity to make it the primary regulatory instrument to drive the effective and efficient decarbonisation of road transport fuels, including a recommendation to express the RED target in GHG terms. Also, the upcoming revision of the Energy Taxation Directive (ETD) is the opportunity to allow the ETD to contribute, together with the RED and possibly with an ETS for transport, to the creation of a carbon price signal capable to create the business case for investments in low-carbon liquid fuels.
“Most probably the best regulatory package to address this issue will be the RED II, however not as a percentage of renewable energy but as a greenhouse gas target,” points out Mr Bartelloni. “In this way, the supplier must put on the market a combination of conventional and alternative fuels whose percentage, in the long run, will grow. What we also push for is a revision of the energy taxation directive which currently is based on the volume. There must be a transformation that focuses also on CO2 emissions and in this regard low-carbon liquid fuels would have lower taxation. We also expect a dedicated section for the transport sector in the new ETS.”
“Ideally, everything should be included in one regulation only (like the RED II). We are not against other tools like the ETS but only if it is separated from the industrial one.”
Finally, in its contribution to the decarbonisation of transport in the framework of the Fit for 55 package expected on 14 July, FuelsEurope also mentioned the upcoming revision of the CO2 standards in cars and vans and for Heavy-Duty Vehicles.
“As things stand now, it seems that it won’t be an incentive for the production of low-carbon fuels,” Alessandro Bartelloni underlines. “Not only FuelsEurope but many other industries are urging to adapt the current regulation, without transforming it radically, as we know that shifting to a life-cycle approach is complicated. But we must give the possibility for the producer to make electric cars or keep the internal combustion engine (without CO2 emissions) as an alternative.”
In this way, producers do not lose competitiveness.
“Those who push for the electric car think only about emissions coming from the tailpipe,” he continues. “However, many other emissions occur before, including batteries’ manufacturing or electricity production. Thus, the electric car is only a partial approach to the problem. If we use also synthetic fuels or renewable hydrogen, the net CO2 emitted is either zero or very low.”
It is also important to take into account the social aspects coming from changes in employment patterns, skills and requirements so that no one is left behind.
“We cannot forget that Europe is mainly a car exporter,” reminds Mr Bartelloni. “In the transition, we are going to lose many jobs.”
“Electrifying everything is not the silver bullet for all applications and especially small and medium enterprises would be badly hit. So we cannot fully close the path of internal combustion engines.”
He goes on underlying the advantage of low-carbon liquid fuels which also create an alternative for the end-users.
“Countries are starting to impose bans on producing diesel cars,” he adds. “This means we are going to need electric cars (and the infrastructure that comes with them). Using low-carbon liquid fuels doesn’t emit net CO2 and it provides an alternative and an added value for society, especially those people usually left behind. Indeed, in the European Commission’s analysis, the social aspect is a bit neglected as not everybody can afford to buy a new car or an electric car.”
And after 2050, the target is to not emit CO2 at all.
“The electric car must also meet the end-users need, so it must be able to drive for more kilometres, the time for charging must be lower and so on,” Mr Bartelloni concludes. “In this scenario, the electric car will take the majority of the market. Advanced biofuels and synthetic fuels can reach the same goal, depending on the costs. It could be a mix but we don’t know for sure what will happen. A good application for low-carbon liquid fuels could be for agriculture machines or heavy-duty transportation.”