NGV Global

Energy and Climate are Hot: NGVs are Not … but they could be!

Welcome to the third of a four part discussion and analysis on legislative and regulatory initiatives being undertaken by European Union policy makers, written especially for NGV Global.

PART 3

Directive on the Promotion of the Use of Renewable Energy Sources 

The European Council in March 2007 agreed to a 10% binding minimum target for the share of biofuels in transport by 2020. The Council, concerned about impacts on food prices, land use, and the destruction of forests (including rain forests)  attached strict conditions to this target, notably, “subject to production being sustainable, and that “second-generation biofuels” becoming commercially available and the Fuel Quality Directive being amended accordingly to allow for adequate levels of blending."

Currently the share of renewable energy in the EU’s final energy consumption is 8.5% meaning that an average increase of 11.5% is needed to meet the target of 20% in 2020. The options for developing renewable energy vary from Member State to Member State.  Three sectors are envisaged: electricity, heating/refrigeration and transport.

The draft directive sets a series of gradual overall objectives for 2012, 2014, 2016 and 2018. Member states will decide how to spread their national efforts across the three sectors in order to achieve its own national objectives. Each will, therefore, be able to choose the methods that are best adapted to the national situation and potential.  (The current jargon for Member State’s rights is called subsidiarity.) Member States also will have the possibility to achieve their objectives by supporting the development of renewable energy in other member states and third countries through the creation of a transferable guarantee of origin scheme: instead of developing domestic renewable energy sources, member states could buy guarantees of origin (certificates proving the renewable source of energy) from other Member States where the production of renewable energy is “less problematic”.

The good news for NGVs is that biogas upgraded to bio-methane for vehicles is 100% sustainable and 100% of European origin, since the feedstock normally is comprised of agricultural or urban waste products or sewage from water treatment facilities.  Additionally, biomethane production already exceeds conversion efficiency levels that liquid biofuels producers are hoping to achieve with ‘second generation’ processes: 50-70% depending upon the conversion process and the feedstock.  NGVs and biomethane for vehicles should be positioned very strongly but it will take a focused and consistent educational effort with Parliament, in particular, which will be providing its recommendations back to the European Commission.  There are NGV-friendly forces at work within the ranks of those in Parliament leading the amendment process, nevertheless, more MEPs need to be better ‘educated’ about the biogas-to-biomethane potential for vehicle applications, and that the effectiveness of biogas to reduce CO2 emissions is not just limited to the electricity generating supply.

The renewable directive proposal is now forwarded to the EU Council and Parliament for approval, with the target date for the final adoption of the legislation in March 2009.  The tentative deadline for EU states to present National Action Plans (NAPs) on renewables is 31 March 2010.

(Reference: Proposed Directive on the promotion of the use of energy from renewable sources; COM 2008/19 final, 23/1/2008)

Fuel Quality Directive (COM 2007/18 Final 31/1/2007)

The fuel quality directive amends Directive 98/70/EC relates to the specification of petrol, diesel and gas-oil with the objective of developing a monitoring mechanism whereby greenhouse gas emitted from road transport of fuels can be reduced.

The Commission’s proposal suggests a maximum limit of 10mg/kg of sulphur in all diesel fuels, from 2009 for road transport and from 2011 for non-road vehicles and inland waterway vessels, and proposes cutting the permitted content of polyaromatic hydrocarbons (PAHs) in diesel from 11% to 8%.

The Commission is also proposing mandatory monitoring and reporting of "lifecycle greenhouse emissions" from fuels as of 2009, and an obligation for fuel suppliers to ensure that greenhouse gases produced by their fuels throughout their life-cycle (i.e. production, transport and use) are cut by 1% per year between 2011 and 2020 (Article 7a).   Furthermore, there is a debate about changing fuel standards to accommodate ethanol, which has higher evaporative emissions than gasoline.

Natural gas as a vehicle fuel is not specifically included except to the extent that it is a renewable biofuel in the form of biomethane.  The key issue, as in the renewable energy legislation, is the degree to which biofuels can be sustainable and produced in such a way whereby low food prices are not sacrificed and land use that is favorable toward CO2 reduction is not destroyed.  Criteria to determine a fuel’s ‘sustainability’ is one of the key aspects of the bill, which also will be shared within the proposed renewable energy directive.  Since biomethane could easily meet whatever sustainability criteria for fuels that is created, the Fuel Quality Directive is important to the NGV sector.  Additionally, blends of natural gas and hydrogen also could be specified within this directive.

The Dutch Socialist MEP Dorette Corbey is the Parliament rapporteur in charge of steering the proposal through Parliament.  She was approached by the NGV industry in 2006 to support amendments then proposed in the Sustainable Energy bill working its way through the Commission and Parliament and she is broadly knowledgable about NGV issues.

Mrs. Corbey held a heavily-attended Parliamentary workshop on 4 March 2008 called “Sustainability Criteria for Biofuels.”  A panel of experts discussed technical aspects, CO2 efficiency, land use, biodiversity, water and social issues associated with the production of liquid biofuels.  A natural gas specialist from the Royal Society (UK) raised specific and challenging questions about how best to create a methodology to identify direct causal relationships between biofuels production and negative impacts on such things as land use and food prices.  While the empirical evidence seems to point to direct impacts of biofuels production on things such as food prices, he said that the effects are difficult to prove and, thus, are difficult to put into legislative language, which will be an advantage for the liquid biofuels industries. 

End of Part 3 – See Part 4 next week.

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