Biofuels and sustainability: Time for the EU to get its story straight

EU policymakers have repeatedly confirmed the sustainability of crop-based biofuels, yet the latest draft Council Presidency draft proposal on energy taxation would treat them as fossil fuels. That undermines the EU’s climate goals and its Paris Agreement commitments, writes David Carpintero.

David Carpintero is the director-general of ePURE, the European renewable ethanol association.

The European Parliament’s recent vote on the revision of the EU Renewable Energy Directive included a definitive statement about the continued importance of sustainably produced crop-based biofuels such as renewable ethanol to achieving EU climate goals.

So it must come as a surprise to many that in other key pieces of legislation in the EU’s so-called Fit for 55 package, including the proposed revision of the way energy is taxed, the proven sustainability of biofuels is still being ignored – even undermined – and their potential is at risk of being hamstrung.

Clearly, the EU needs to get its story straight when it comes to the sustainability of biofuels.

With their RED II revision vote, MEPs rejected the misleading arguments about the alleged non-sustainability of crop-based biofuels and affirmed their place in the Fit for 55 framework for reducing the EU’s greenhouse-gas emissions. So far, so good.

But this clear support for biofuels to play a role in EU transport decarbonisation is unfortunately not reflected in other Fit for 55 proposals, such as those aimed at reducing aviation and maritime emissions.

Perhaps most confusing of all is the latest draft Council Presidency compromise text on the revision of the EU Energy Taxation Directive (ETD), which unfairly discriminates among renewable fuels and relegates some – including sustainably produced crop-based renewable EU ethanol – to second-class-citizen status.  In this draft, it is striking to note that sustainably produced crop-based renewable EU ethanol – which significantly contributes to the GHG emissions reduction in the transport sector under RED II – would be taxed at a level identical to regular fossil fuel.

If this version of the ETD prevails, the EU will create an arbitrary and unpredictable energy taxation framework largely inconsistent with the objective of the RED II. And even if it doesn’t succeed – remember, EU taxation measures require unanimity of Member States – the debate will still reinforce unfounded doubts in some minds about the sustainability of biofuels.

Patchwork approach

Let’s look more closely at the inconsistencies of the different approaches.

The revised (and re-revised) RED II set strict sustainability criteria for crop-based biofuels to be used in transport, including setting a GHG-emission-savings threshold, defining no-go areas to protect biodiversity, subjecting crop-based biofuels to a maximum cap of 7% of transport energy mix and phasing out high-ILUC-risk biofuels (a definition that does not apply to renewable ethanol).

These criteria are entirely ignored by the ReFuelEU Aviation proposal, which would exclude all crop-based biofuels from the definition of sustainable aviation fuel (SAF), and do not allow crop-based biofuels to contribute to the renewable fuels mandate.

ReFuelEU Maritime is similar in approach to the Energy Taxation Directive in that crop-based biofuels are considered to have the same emissions as the least favourable fossil fuel pathway. In other words, crop-based biofuels are still allowed but even more penalised than fossil fuels.

The idea of taxing crop-based biofuels the same as fossil fuels not only ignores their proven track record of GHG reduction (an average of 77% compared to fossil fuel in the case of renewable ethanol), it also goes against all common sense, especially when one reads from the explanatory memorandum to the Commission’s proposal for a revision of RED II that the Energy Taxation Directive and the Renewable Energy Directive should aim in the same direction.

The draft ETD, which currently puts sustainable crop-based biofuels and fossil fuels on an equal footing, also breaches the international commitments taken by the EU and its Member States under the Paris Agreement. The EU’s ‘nationally determined contribution’ document outlining efforts taken to implement the Paris Agreement lists RED II as part of these efforts. This means that all types of renewable sources of energy contained in RED II – thus including sustainable crop-based biofuels – are participating in the implementation of the Paris Agreement and should not be undermined by any other EU energy-related legislation.

Taxation with representation

The way forward should be clear to policymakers. Energy taxation should adequately reflect renewable fuels’ sustainability and GHG savings compared to fossil fuel. To this end, crop-based biofuels and biogas should be included in the category of ‘sustainable biofuels and biogas’ if they meet the sustainability criteria laid under RED II. This would grant them a fixed favourable taxation level compared to fossil fuels and reflect their superior environmental performance and GHG savings.

Sustainable crop-based biofuels will be instrumental in delivering the EU’s 2030 objectives and beyond, and stability and predictability of the legislative framework should be paramount. The draft Council Presidency compromise proposal to allow Member States to decide if sustainable crop-based biofuels and biogas would be subject to a 10-year transitional period is arbitrary and unfounded.

The revised ETD should provide the same level of incentives for the continued use of sustainable, already available, and affordable alternatives to fossil fuels, including sustainable crop-based biofuels. It’s only by sending this clear and consistent message with coherent policies that the EU can achieve our common goal: getting fossil fuels out of transport.