Wanted: An EU Biofuels Policy that Is Fair for All
Friday, June 27, 2014
Wanted: An EU Biofuels Policy that Is Fair for All
Charles Morris, CEO, Pine Chemicals Association
June 25, 2014
At the beginning of 2014, the European Commission unveiled a policy framework for climate and energy from 2020 to 2030. In a controversial move, the Commission stated that it “does not think it appropriate to establish new targets for renewable energy or greenhouse gas intensity of fuels used in the transport sector or any other sub-sector after 2020.”
Find more information on the policy framework here.
Instead, the Commission suggested that policy development moving forward should take a “more holistic and integrated approach” on improving the transport system and in the development and deployment of biofuels. This decision has biofuel manufacturers on edge: Without new targets mandated they may lose financial assistance in the form of the subsidies and tax breaks them and their distributors depend on to keep their plants up and running.
The Commission’s “no new fuel targets” decision is right on target, as is its call for “an improved biomass policy.” Biomass used in the production of biofuels has been a source of controversy ever since corn-based ethanol was introduced. The Commission now calls for a policy that:
- Maximizes the “resource efficient use of biomass.” Biomass should be used to its fullest capacity and for the right ends.
- Delivers robust and verifiable greenhouse gas savings. Data that is based only on fossil fuel and GHG comparisons are flawed and do not give the full emissions and carbon footprint picture.
- Allows for fair competition between the various industries that use biomass resources. Fair competition means an even playing field for the biofuels industry and other industries that use the same feedstocks. An even, free market playing field results in a more dynamic bioeconomy with greater growth potential.
Using Biomass Efficiently
There are bio-industries already contributing to making a strong bioeconomy. The pine chemicals industry, for example, has efficiently utilized co-products from papermaking to produce a multitude of innovative industrial chemicals and consumer products. The industry maximizes the full value of its biorenewable raw material Crude Tall Oil (CTO) by “cascading use.”
Cascading use (see graphic below) is the thorough utilization of the value chain of a product to take advantage of each new co-product and to create additional value-added products, until 100 percent of each co-product’s potential has been harnessed. Only when no new value-added products can be created should the “waste” or “residue” be converted into energy if that is the most efficient use of what remains.
Comprehensive GHG Studies Cascading Use of Crude Tall Oil in Pine Chemicals
The dual goal of biofuel use is to reduce greenhouse gas emissions and to reduce fossil fuel use. Often incomplete biofuel studies are used by regulatory agencies when making important decisions. These studies compare biofuels to fossil fuel and GHG reduction but fail to analyze the impact of substitutes that may come into the market to replace current biomass-based products.
To quantify this impact with through solid scientific evidence, a peer-reviewed analysis was conducted for the CTO life cycle. It found that the carbon footprint of pine chemicals from CTO is 70 percent lower in Europe than the substitutes that would be used if CTO is diverted to biofuel. Since CTO is increasingly being used to produce biodiesel for transportation fuel, the study also compared CTO usage for biodiesel versus pine chemicals. The LCA found no significant difference in the non-renewable energy or carbon footprints between using CTO for biodiesel and using it for pine chemicals. Additionally, the study found that no reduction in fossil fuel would occur as the substitute products use higher amounts of fossil fuel and this offsets any gains.
In other words, there are no real gains in using CTO as a biofuel…but there are significant costs.
Ensure Fair Competition
Biofuel manufacturers and their distributors in the EU benefit substantially from the tax breaks and subsidies offered and it is not clear if these businesses would be sustainable without this assistance. The pine chemicals industry has successfully developed a sustainable business model responsible for billions of dollars in shipments and employs thousands of workers around the globe — without financial help. In order to ensure a level playing field, businesses in the bioeconomy should be sustainable on their own merits. If the business model requires tax breaks and subsidies to survive, then it should not be supported.
We recommend the EC and EU member states take the following actions:
- Champion bio-industries that maximize the resource efficient use of biomass.
- Demand more comprehensive GHG studies that define all the impacts of redirecting a biomass feedstock to better inform officials when making critical energy decisions.
- Limit financial breaks for biofuel manufacturers until the consequences of changing the use of a biomass feedstock are fully understood.
Like the European Commission stated, “fair competition” should be part of an improved biomass policy. Industries that compete with biofuel manufacturers expect nothing less.Renewable Energy World