Uchenna Izundu
International Editor
LONDON, Feb. 21 -- Quantity targets to introduce biofuels into the European Union's energy mix should be scrapped in favor of a low-carbon policy approach, according to a senior environmentalist.
Speaking at International Petroleum Week in London, Jos Dings, director of the European Federation for Transport and Environment, said biofuel producers were confused about whether to invest in "cheap or clean biofuels" because member state governments have changed their biofuel targets, creating uncertainty in the market.
Dings said under a low-carbon approach, which is being developed in California, companies would be given signals to invest in low-carbon methods at the cheapest cost. The European Commission has proposed that it will review the fuel quality directive to see if it can use this method instead.
Last month, EC proposed that 20% of its energy mix comes from renewable sources by 2020 compared with 8.5% today. It published a directive to remove the barriers to the growth of the renewable sector so that it can enhance its energy security. EC's proposals will be debated by the Parliament and Council later this year before a decision can be taken on whether they will be adopted or not.
But £30 billion/year to 2030 of investment is required to just build conversion facilities for biofuels, said Peter New, president of global biofuels at BP PLC. "That means building a 300 million gal plant every 5-6 days."
The UK faces a 303 million l. shortfall in biofuel capacity as it aspires to meet its target of 5% of transportation fuel from biofuels by 2010, warned John Seed, managing director of Helius Energy. But producers and the supply chain can deliver the raw materials, he added, because of innovative technology.
Bioethanol and biodiesel are likely to compete against each other depending on oil prices, incentives for developments, and penalties, New said. Challenges facing growth of the industry include regulation, terminal investment, forecourt investment, and product quality. "I think these will be resolved but it will be a bumpy road," New admitted.
New told OGJ that dialogue was essential with the automobile industry to coincide its timetable on producing cars for biofuels. About 80% of the EU's car fleet will turn over in the next 13-15 years. However, the car industry is split between those looking at biofuels and those continuing with diesel-based cars. Views differ also about what work needs to be completed under EU regulations.
"Energy efficiency is paramount to tackling carbon emissions rather than rushing to biofuels," Dings said. "Debating about the distinction between first generation and second generation biofuels is useless. The issue should focus on whether biofuels require new land as this is a sustainability issue," he said.
Consolidation of biofuel companies is likely in the future, said Melissa Stark, partner of energy strategy at Accenture. She told OGJ that ageing technology would be a driver in bringing companies together. "Infrastructure development and financial markets will be critical for the next 5 years. People want to see volumes on the market to see prices."
Contact Uchenna Izundu at [email protected].
