Monday, October 26, 2020
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FuelsEurope underlines the potential of low-carbon fuels for climate neutrality

FuelsEurope, the voice of the European petroleum refining industry, is supporting the European Union’s ambition for climate neutrality by 2050. However, it underlined how limiting the role of renewable and low-carbon liquid fuels to aviation and maritime transport overlooks the potential of these fuels and risks jeopardising optimal conditions for investments at scale in the short-term.

The European Commission recently increased the 2030 decarbonisation target from 40 to 55 per cent. According to FuelsEurope, the petroleum refining industry has great capability in many critical technologies and many of its members are now large-scale investors in a wide range, including onshore and offshore wind, solar, electric vehicle batteries and charging, Carbon capture and storage (CCS), Carbon capture and utilisation (CCU), clean hydrogen, e-fuels, waste and sustainable biomass-based biofuels.

Meeting Europe’s climate objectives will require a steep trajectory in the reduction of the use of petroleum fuels in transport, achieved through efficiency and also substitution, especially through scaling up of electricity into light transport. Thus, FuelsEurope sees a growing consensus of the need for low carbon liquid fuels as part of the transport energy mix.

According to John Cooper, Director General of FuelsEurope these fuels could cut Europe’s emissions by 100 million tonnes/year CO2 in 2035 in the transport sector.

“A preliminary assessment of the required investments shows up to 650 billion euros from now until 2050, to build the required production capacity,” he pointed out. “With the right policies, we believe this is within reach.”

For FuelsEurope, road transport-fuels and vehicles regulations have a unique and valuable characteristic in that they are proven capable of delivering highly effective carbon prices, whilst avoiding the international competitiveness challenges of high carbon prices in, for example, the ETS sectors.

“Road fuels and vehicles regulations can play a valuable strategic role for Europe’s industrial policies by creating critical lead markets for products from these core industrial technologies,” underlined Mr Cooper. “So supporting a role for low carbon liquid fuels in road transport is in the long-term interests of Europe’s broader industrial strategy as well as that for aviation and maritime sectors. We understand the drive for an early move to only climate neutral new vehicles. But a vehicle emitting only recycled/biogenic CO2 during the use phase is as climate neutral as an Electric Vehicle or Hydrogen Fuel Cell Vehicles.”

FuelsEurope is suggesting to credit new, additional production of low carbon fuels to the purchase of a new vehicle, supplied for the life of the vehicle, giving customers more options. And for low-carbon liquid fuels, all distribution and storage infrastructure exists and transport equipment (existing and new) requires little or no modification to meet climate neutrality.

Moreover, low-carbon fuels could boost rural development, create new opportunities for EU agriculture and forestry, help finance industrial integration, and reduce pressure on supply chains for large battery cell and pack construction in Europe.

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