Briefing for Director-General Kurt Vandenberghe
Meeting with
Fuels Europe
Brussels, 12 October 2023; from 11:00
BASIS 2366
• But our industries also need to be assured that CCS is a real mitigation option for
them. This actually incudes also refining and petrochemicals. What is your position on
our proposal in NZIA that the oil and gas sector needs to contribute to the EU
objective of 50 million ton of storage capacity by 2030?
Innovation Fund
• The ETS-funded Innovation Fund in one of the key instruments in shortening time-to-
market for fuel technologies that have not yet reached technological and commercial
maturity. In the latest revision of the ETS Directive, its scope has also been widened to
the aviation and maritime sectors as well as the consumption of fuels in the sectors of
buildings and road transport.
• Even before the formal extension of the scope, the Fund has already been supporting
the scale up of such technologies. In the six calls for proposals that the Innovation
Fund has organized since 2020, it has selected 3 projects related with the production
of fuels for the aviation sector, all of them as part of the large-scale calls. One of them
(HySkies) will be producing in Sweden synthetic fuel combining renewable hydrogen
(200MW electrolyser) and captured CO2, planning to produce 82,000 tonnes of SAF
and 9,000 tones of renewable diesel annually. Another one (BioOstrand, also in
Sweden) will be producing bio-fuels by converting paper pulp biomass waste into SAF
and naphtha.
• The Fund will now also directly support breakthrough innovative technologies and
infrastructure, including production of low- and zero-carbon fuels, to decarbonise the
maritime, aviation, rail and road transport sectors (including collective forms of
transport such as public transport and coach services) and will adapt its
methodologies, particularly on GHG avoidance aspects, to this new expanded scope.
• For aviation, it may also support electrification and actions to reduce the overall
climate impacts of aviation, taking account impact beyond those of CO2 emissions
(such as soot particles, nitrogen oxides or oxidized sulphur)
• For Maritime, the Fund will also target the electrification of the sector, include actions
dedicated at the reduction of black carbon emissions, and insert evaluation criteria
assessing biodiversity protection and for reducing noise and water pollution.
• Both sectors could benefit from additional support from the Innovation Fund, as they
could benefit directly or indirectly from projects that are not tagged as “maritime” or
“aviation” projects but that could play an essential role to make sustainable alternative
fuels, or cross-cutting technologies more competitive and available at scale.
• The next big call for grants from the Innovation Fund and a €800 mil ion for auctions
for RFNBO Hydrogen will open in November this year and we hope to receive good
projects to support the decarbonisation of the aviation and the maritime transport
among them.
• As this auction will be sectorial neutral regarding the off-takers and the use produced
hydrogen is directed for. Given the relevant technological synergies that refineries may
find in the production of renewable hydrogen with the already existing infrastructure
and installation, refineries are expected to be able to present highly competitive bids in
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Briefing for Director-General Kurt Vandenberghe
Meeting with
Fuels Europe
Brussels, 12 October 2023; from 11:00
BASIS 2366
the auction call.
Do you expect strong applications from the refinery sector for e-
fuels, especially in the maritime and aviation sector as well?
• DG CLIMA values the strong involvement of the fuel manufacturing industry in the
decarbonisation, and looks forward to continued dialogue in this regard.
Reactive points
Sustainable, non-fossil fuels can play a role complementary to electrification and
hydrogen for decarbonising transport, even though lower efficiency and costs
(which are currently high) are limiting that role. While they are recognised in
regulations for aviation and maritime transport, they are not mentioned in CO2
standards.
• While electrification remains the main option for the decarbonisation of new vehicles,
RFNBOs along with advanced biofuels will play an important role to achieve the
required GHG emission reduction in transport. These fuels will need to be prioritised
for those transport sectors and segments that are ‘hard to decarbonise’, such as
aviation and maritime, where electrification is not possible, in order to reach the
climate neutrality objective. For the road segment, these fuels can be used to reduce
emissions from the existing stock of vehicles, while the new vehicles will progressively
become zero-emission. This offers ample opportunities for the development of
decarbonised fuels.
• The revised Renewable Energy Directive incentivises the uptake of renewable and low
carbon fuels, with a specific focus on the promotion of innovative renewable fuels,
such as advanced biofuels and the RFNBOs.
• There are also important synergies with other instruments, such as strengthened
emissions trading system (ETS) where a new ETS2 has been created to drive the
emission reductions in other sectors not yet covered by ETS, that is road transport and
buildings.
• Another complementary instrument is the revised Energy Taxation Directive (ETD)
aiming to align the taxation of energy products with EU climate and energy policies,
and in this way helping to ensure that the taxation of fuels, and electricity reflects their
impact on the environment and climate.
Under the revised CO2 standards for cars and vans regulation, FuelsEurope calls
the Commission to make a proposal which includes all CO2 neutral fuel options,
synthetic fuels and biofuels, that, according to FuelsEurope, will spur EU
investments.
• The Commission and the EU are committed to economy-wide climate neutrality by
2050. Transport is a sector where emissions are increasing, so we need to increase
our efforts.
• The Commission has acknowledged the decision by the European Parliament and the
Council to include a recital on CO2 neutral fuels in the revised regulation on CO2
standards for cars and vans. The Recital (11) states that “
Following consultation with
stakeholders, the Commission will make a proposal for registering after 2035 vehicles
running exclusively on CO2 neutral fuels in conformity with Union law, outside the
scope of the fleet standards, and in conformity with the Union’s climate-neutrality
objective”.
• The Commission has committed through a statement made in the Council to submit
proposals to give effect to the provision included in the Regulation for allowing the
registration of cars and vans exclusively running on e-fuels (not biofuels) after 2035. A
proposal for such a system is being prepared and will soon be discussed with Member
States and stakeholders.
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Briefing for Director-General Kurt Vandenberghe
Meeting with
Fuels Europe
Brussels, 12 October 2023; from 11:00
BASIS 2366
Background
FuelsEurope: formed in 1989, is a division of the European Petroleum Refiners
Association, operating in Belgium. The association, whose members are about 40 oil and
gas companies that operate petroleum refineries in the European Economic Area, is
comprised of the FuelsEurope and Concawe divisions, each having separate and distinct
roles and expertise, but administratively consolidated.
FuelsEurope provide an expert opinion on the production process, distribution and use of
industry’s products. The aim is to achieve a regulatory framework that promotes EU
excellence in technologies contributing to the energy transition and climate goals;
supports a sustainable and competitive EU industry; and protects human health and the
environment.
Clean Fuels for All - A pathway to climate neutrality
In the Pathway paper, FuelsEurope foresees that, by 2050, every litre of liquid fuel for
transport would become net climate neutral, enabling the decarbonisation of aviation,
maritime and road transport. This pathway would require an estimated €30 to €40 bil ion
investment between 2020 and 2030, including the creation of advanced biofuel and e-fuel
plants, increasing the production of low-carbon liquid fuels up to 30 Mtoe/y in 2030.
Major investments could start in the next years, with first-of-a-kind biomass-to-liquid and
e-fuel plants coming into operation at an industrial scale no later than 2025.
By 2050, the total investment needed would be estimated between €400 and €650 bil ion,
enabling the availability of 150 Mtoe of low-carbon liquid fuels.
By adding Carbon Capture and Storage (CCS), the capture of emissions in biofuel
production, and, in combination with electrification and hydrogen technologies,
FuelsEurope estimates that road transport would reach climate neutrality by 2050.
However, to be successful, a broad multi-stakeholder partnership and investor confidence,
as well as political vision, is needed.
FuelsEurope recent positions/statements
The Net Zero Industry Act: While welcoming the NZIA and its aim of promoting the
ramp-up of critical technologies and their deployment, FuelsEurope calls for the NZIA to
set up additional measures to maximize refining industry contribution and to enhance
investments in the energy transition :
• Establish a framework which supports and incentivises private investments for the
deployment of renewable, low or zero-carbon technologies & products along the whole
value chain;
• Promote the conversions/repurposing/upgrading of existing refinery assets for the
production of low-emission fuels/energy; therefore, enlarging the scope of the act,
keeping a technology-open approach, allowing all technologies with GHG abatement
potential to be scaled up:
• Include renewable & low-carbon fuels as defined in the RED as well as a wider range
of renewable and low-carbon liquid fuels production technologies;
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Briefing for Director-General Kurt Vandenberghe
Meeting with
Fuels Europe
Brussels, 12 October 2023; from 11:00
BASIS 2366
• Explicitly refer to the research and development for the production processes for
upgrading/conversion of biomass wastes and residues including - among others -
enzymatic/cellulosic, Fischer-Tropsch, Gasification and Pyrolysis technologies;
• Include CCU, along with measures to create an efficient CO2 market in support of the
development of CCS.
The Opinion on the ‘Review of the CO2 emission standards for heavy-duty vehicles’
by the European Economic and Social Committee
FuelsEurope
was co-rapporteur of the Opinion which
essentially calls for a life-cycle approach to “avoid road transport decarbonisation leading
to a shift of emissions upstream in the value chain.” The Opinion advocates for a
“diversified technology strategy, with sustainable fuels complementing BEVs and
hydrogen vehicles, while these two technologies develop and widen their domestic EU
basis”, and that “the technology-neutral option presents numerous advantages. It would
notably mitigate the risks both in technology development and in the security of supply.”
Furthermore, the Opinion highlights that “the methodology distinguishing between linear
CO2 emissions (from fossil fuels) and circular or net-zero emissions (from e-fuels and
sustainable biofuels), in a life-cycle context, shows that efficient ICE and hybrid vehicles,
fuelled by sustainable biofuels and e-fuels, have a carbon footprint comparable to that of
BEVs using fossil-based electricity”.
Finally, the Opinion states that the HDV CO2 regulation based on the "tailpipe" approach
needs to be complemented by other policy instruments to incentivise the use of
renewable, non-fossil fuels for the part of the fleet running on internal combustion engines
(ICE).
Joint letter on Delegated Act GHG methodology RFNBO/RCF
FuelsEurope welcomes the adoption of the Delegated Acts setting out a detailed
methodology with the required criteria to provide a stable framework to rule the production
of the RFNBO/RCF in the close future. However, based on assessment of FuelsEurope,
including a number of case studies, the letter raises concerns about the risk of diverging
interpretation of the rules, in absence of a clear certification framework that may hamper
the scale-up of the EU’s RFNBO market.
In this regard, FuelsEurope calls for the completion of comprehensive certification
framework for RFNBOs, and puts forward certain recommendations, so that a clear and
unique interpretation of the relevant aspects of DAs can be ensured by the accredited
certification bodies.
Contact:
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