Biofuels associations advise EC caution over waivers
European associations representing the biofuels supply chain have sent a letter today to the European Commission addressing potential waivers for biofuels blending mandates in response to the coronavirus pandemic.
The letter, addressed to vice president for the European Green Deal, Frans Timmermans, and signed by seven associations including the European Biodiesel Board (EBB) and ePure is aimed at addressing possible mitigation measures. It said that certain EU states were "considering implementing derogations to their blending obligations", although it did not outline which members were touting the plans.
It added that members were not experiencing any difficulty in meeting the existing and decreasing demand for biofuels and that any potential waiver on national blending obligations would result in "further strain on the availability of EU-produced protein supplies for livestock and hence impact animal production chains."
The European biofuels industry is already severely affected by the sharp drop in fuel consumption and the corresponding decline in the demand for biofuels and by-products, the letter added.
In response, the European Waste-to-Advanced Biofuels Association (Ewaba) told Argus that the waste biodiesel industry rejected any potential waiving of biodiesel mandate obligations in European countries. "The Covid-19 crisis actually shows that systemic risks should be addressed before they get out of hand, and for this very reason this is not the moment to renounce climate mitigation," it said.
Ewaba secretary general Angel Alvarez Alberdi said the EU should not abandon climate objectives embodied in the Green Deal, or its international commitments. "If waste biodiesel production were to be halted for a significant period, more than a million tonnes of noxious waste would end up producing additional greenhouse gases in landfills instead, thus further worsening the situation," he said.
Demand for all biodiesel grades has slowed in recent weeks in line with lower diesel consumption as EU governments restrict movement and implement lockdown measures to prevent the spread of the virus. Biodiesel market participants expect a significant reduction in output in April as already negative production margins for domestically produced product are unlikely to recover soon.
Biodiesel prices have fallen sharply in northwest Europe throughout February and March, with domestically produced rapeseed oil-based biodiesel spot values hitting an all-time low yesterday.
Spot prices for T2 ethanol have also dropped sharply since the start of February, softening to record lows in the same trading session.
The Federal Association of the German Bioethanol Industry (BDBe) said today that special regulations have been put in place to enable the use of undenatured ethanol in the production of disinfectant.
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EU’s centre-right EPP mulls Green Deal tweaks
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Brussels, 3 July (Argus) — The European Parliament's largest group, the centre-right EPP, is working to complete the bulk of its strategy programme on 4 July at a meeting in Portugal. Key elements in the party's 2024-29 policy agenda include significant changes to the bloc's climate and energy policy for 2030. A draft of the five-point policy plan lists revising CO2 standards for new cars and vans to "allow for the use of alternative zero-emission fuels beyond 2035". The EPP also calls for a new e-fuel, biofuel and low-carbon fuel strategy "with targeted incentives and funding to accompany the EU hydrogen strategy". Additionally, the EPP wants the incoming European Commission to create a "single market for CO2" with a market-based framework for carbon capture and storage (CCS) and carbon capture and utilisation (CCU), through an accompanying legislative package similar to that adopted for the EU's gas and hydrogen markets. The strategy document discusses a "Green Growth Deal" aiming to achieve the EU's 55pc emission reduction target by 2030 — from 1990 levels — and climate neutrality by 2050, while boosting the EU's competitiveness and ensuring technological neutrality. The draft document emphasises the need to transition "away from fossil fuels towards clean energy", also by ramping up international hydrogen production. And the draft advocates for a "simple, technology-neutral, and pragmatic definition for low-carbon hydrogen" in upcoming technical legislation from the commission. More controversial points include postponing application of the EU's deforestation regulation and addressing problems related to its implementation. The EPP also wants to split the EU's industrial emissions directive into "industrial and agricultural parts", conduct a "full-scale" inquiry into why farmers are not receiving fair prices for their products, and require robust impact assessments for the economic viability of farms for any new animal welfare proposals. The group's members of parliament are meeting until 5 July. Commission president Ursula von der Leyen is also attending. She was [recently nominated](https://direct.argusmedia.com/newsandanalysis/article/25825320 by EU leaders for re-election. The EPP programme will significantly influence policy priorities that von der Leyen would support, if she is approved by an absolute majority of 361 votes at a session in Strasbourg on 15-18 July. But von der Leyen may need to drop more controversial points to secure a majority with liberal, centre-left and green support. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Washington advances carbon market linkage plans
Washington advances carbon market linkage plans
Houston, 2 July (Argus) — Washington regulators are moving forward with plans to further align the state's cap-and-trade program with the California-Quebec carbon market. The state Department of Ecology has released for public comment two draft rules related to holding limits, biofuel emissions and electricity imports that are intended to smooth the way for linkage ahead of formal discussions with California and Quebec regulators that could kick-off next year. The first draft rule, issued on Monday, would revise general cap-and-trade program mechanics, such as raising the holding limit for allowances issued each year for general market participants to 25pc from 10pc should the programs link. It would also revise emissions exemption for biofuels, recently authorized by state lawmakers, of 30pc lower greenhouse gas (GHG) emissions than comparable petroleum fuels and allow Ecology to add an exemption standard used by a linked program, for a two-part standard. Washington set the ball rolling on its ambition to link with the Western Climate Initiative (WCI) partners California and Quebec last year in hopes that creating a larger North American carbon market will help reduce compliance costs. The state legislature authorized Ecology to make the changes in legislation adopted earlier this year . The program costs became a significant issue last year, when Washington Carbon Allowances (WCAs) rose as high as $70/metric tonne (t) in the secondary market. California and Quebec agreed in March to explore adding Washington to the WCI, but progress is unlikely to happen this year as California regulators first focus on updating the state's cap-and-trade program. In the interim, Ecology said it is still considering other amendments that could help with linkage, including moving the state's compliance periods, which run on a four-year cycle, to the three-year cycle used in the linked market. But California and Quebec are considering shifting their compliance periods to either four years or two years for 2026-2030, and then to either five years or alternating between three-year and two-year periods after 2030 to align with their respective statutory targets, which Ecology will have to take into account. Washington has set a target to cut GHG emissions by 45pc by 2030 compared with 1990 levels, and reach net-zero emissions by 2050. The program cap-and-trade program covers industrial facilities, power plants, natural gas suppliers, and other fuel suppliers with emissions of at least 25,000 t/yr. Ecology is accepting feedback on its linkage rulemaking through 27 September, with a public meeting set for 10 July. Imports and reports In a separate rulemaking announced last week, the state is considering expanding reporting requirements and covered emissions under the program to included imported electricity from centralized electricity markets (CEM). The state is required under its Climate Commitment Act to adopt a methodology for imported electricity by 1 October 2026. The proposed amendments would come into play in 2027, allowing regulators to assign GHG emissions to imports of electricity from CEM and for the state to better understand how the imports may affect its climate goals. Under the proposed amendments, regulators would increase allocations of no-cost allowances to electric utilities. The state issues no-cost allowances to electric and natural gas utilities, and industrial entities, to mitigate the cost of decarbonization. Electric utilities must consign an increasing portion of these allowances to state auction starting in 2027 and must use this revenue for projects to benefit customers through projects like energy transition billing credits. Regulators estimate that bringing CEM importers under the cap-and-trade program will result in an aggregated annual compliance cost of around $7mn-$119mn, depending on allowance prices, which regulators expect will fall as emissions declines outweigh imports over time, according to a preliminary regulatory analysis released last month. The proposed changes reflect estimates last year by the state Department of Commerce that 43pc of the state's electricity supply by 2050 will come from imports, driven by Washington moving its electricity away from fossil fuels to renewables sourced from within and outside the state to meet the goal of decarbonizing the state's grid by 2045. Ecology will accept feedback on its proposed rules for imported electricity through 20 August, with final adoption planned in December. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LPG industry urged to invest to build EU credibility
LPG industry urged to invest to build EU credibility
Tapping into funding for renewable fuels is seen as key for the industry, but investment decisions must not be made in haste, writes Matt Scotland London, 2 July (Argus) — The LPG industry has been urged to work more closely with the sustainable aviation fuel (SAF) and other nascent renewable fuel sectors to establish bioLPG and renewable LPG and DME production plants as soon as possible. "It would be great if the LPG industry could embrace other renewable liquid fuels" as these often already have governmental backing and financing, Vertimass board adviser Neil Murphy told delegates at European LPG association Liquid Gas Europe's Congress in Lyon, France, over 18-20 June. US-based Vertimass aims to commercialise the conversion of ethanol into SAF, renewable diesel and renewable gasoline components. The LPG sector, in its efforts to develop renewable forms of LPG and DME, needs to move from "great intent" to the "earthiness of investment and putting plants down in the ground", Murphy said. Doing so will build credibility among policy makers, he said. But the sector was also warned about making hasty investments that turn out to be "mistakes", hurting the prospects for renewable LPG in the medium to long term. "The US saw huge failures in its early solar panel manufacturing efforts — billions of dollars were wasted. So, we can't advocate for things just to get steel in the ground, we need the steel in the ground to be successful," US start-up BioLPG LLC's chairman Kimbal Chen said. BioLPG LLC and Chicago-based research institute GTI Energy have jointly developed the "Cool LPG" process to convert biogas into bioLPG. Italian consortium Green LG Energy is adopting the technology to develop a pilot plant in Chicago and later a larger demonstration facility in Italy, chief executive Francesco Franchi told delegates. The Chicago facility could open before the end of this year and the Italian plant within the next two years. Once operational, the latter will "show policy makers and stakeholders that we can produce bioLPG, allowing us to secure funding and support to develop an industrial-scale plant", he said. Credibility was a core theme of the conference in Lyon as the industry continues to work to enshrine LPG and renewable alternatives in EU and national legislation. The question the sector needs to ask itself is how to make its proposals and voice credible to EU policy makers after the recent European Parliament elections, LGE president Audrey Galland said. France could play a vital role, as despite having a 10pc share of the European LPG market, it has a strong voice in Brussels, according to French LPG association FGL president Julie de Fazio. A growing recognition that electrification of heating will not be suitable in most rural areas, and that rural customers want to decarbonise, should benefit the LPG sector, she said. But it still needs "financial incentives and mandates" that encourage investment in renewable liquid gases, she said. Hearing the possibility for mandates in a positive rather than restrictive sense was "music to my ears", renewable DME company Dimeta's advocacy director Sophia Haywood said. Combining supportive mandates for renewable liquid gases at the same time as financial incentivisation could be key to unlocking growth, she said. Pragmatic shift? The recent parliamentary election could be a boon for the LPG industry, according to former EU MEP and UK member of the regulatory policy committee Daniel Dalton. The shift in power from centre-left to centre-right should result in "more pragmatic energy policy" that benefits the LPG sector, he told delegates. And the ascent of the cost-of-living and energy security issues up the EU's agenda should also lead to a "watering down of the hard edges" when it comes to the paths to meeting the EU's bold targets under its Green Deal. "You as an industry are well placed" in assisting the EU in its efforts to enhance energy security and lower energy costs, while also moving towards decarbonised renewable liquid gases, he said. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
France approves HVO100 at fuel stations
France approves HVO100 at fuel stations
London, 1 July (Argus) — France has approved the sale of transport fuels made from 100pc renewable raw materials such as pure hydrotreated vegetable oil, or HVO100, at fuel stations, according to Finnish biofuel producer Neste. Pure biofuel sales had so far been limited to logistics companies with fuel supply networks, said Neste. German filling station operators have been permitted to sell B10 and HVO for the past month . In May , the EU mandated that new heavy-duty vehicles (HDVs) from 2030 will require 45pc greenhouse gas (GHG) cuts for 2030-34, 65pc for 2035-39 and 90pc as of 2040, compared with fleet averages in 2019. The revised law covers most trucks, urban buses, long-distance buses and trailers. As hard-to-electrify vehicles, HDV owners often turn to biofuels like HVO to reduce GHG emissions. The EU will assess a "possible" methodology for registering HDVs running exclusively on "CO2 neutral fuels" in 2027, as well as examining the role of "sustainable renewable" fuels and a carbon correction factor (CCF). CO2-neutral fuels lack a clear definition but can refer to e-fuels, renewable fuels of non-biological origin (RFNBO), recycled carbon fuels, and some biofuels. All new cars and vans registered in Europe must be zero emission by 2035 , and CO2 emissions for new cars and vans must be cut by 55pc and 50pc by 2030. European diesel demand fell sharply in France, and in smaller consumers Norway and Sweden, in January-March this year . The declines, closely linked to economic activity, reflect weak economic growth, but also falling diesel vehicle sales in favour of gasoline. There appear to be signs of a diesel demand recovery in the second quarter, Argus Consulting said last week , as French diesel demand grew by 8pc on the year to 610,000 b/d in April, although gasoline growth again outpaced it, rising by 14pc to 270,000 b/d. By Madeleine Jenkins Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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