ADVANCEFUEL final event – How can Europe develop a market for advanced renewable fuels?


Type of post: NEWS.

The results of the EU Horizon 2020 project ADVANCEFUEL produced over the past three years have been presented during the project’s final event on 24 June 2020 in the context of the EU Sustainable Energy Week. The project coordinated by FNR brings together eight partners from seven different countries aiming to facilitate the commercialisation of advanced renewable transport fuels to contribute to the achievement of the EU’s renewable energy targets and reduce carbon emissions in the transport sector to 2030 and beyond. 
Discover the final results of the project ADVANCEFUEL.
Section: “ADVANCED BIOFUELS”.

Figure 1. Express train with tanker with biofuel (source: shutterstock)

Without advanced renewable fuels, EU will not meet climate objectives (Verbatim fragments of a press release of the project ADVANCEFUEL, Vanessa Wabitsch)

“While conventional biofuels have come under fire for sustainability concerns and land competition for feed and food production, liquid advanced biofuels are derived from renewable energy sources from lignocellulosic non-food energy crops, or agricultural residues, waste oils, and even renewable hydrogen and CO2 streams. The EU Renewable Energy Directive sets a target for the contribution of advanced biofuels to renewable transport fuel of at least 3,5 % by 2030.

Deploying Renewable fuels (RESfuels) over the next decades will require a substantial amount of sustainable feedstocks. To make this viable, all identified potentials, including innovations in land use and applied cropping schemes, need to be unlocked to be able to produce sufficient amounts of these sustainable fuels. Additionally, the further development and integration of suitable conversion technologies needs to be promoted and supported by strong and stable policy support, including financial incentives to reduce the economic risks involved in increasing this new market segment and for penalising the fossil based fuel production routes. Given such policies, the increased integration of the new processes into already existing fossil fuel infrastructure, the up-scaling of RESfuel production and the increased use of side products can lead to the cost reductions required for the expansion of this industry and the successful market roll-out of these favourable fuels.

Research conducted by the ADVANCEFUEL project addresses key regulatory, economic and environmental barriers for RESfuels and proposes evidence-based solutions to overcoming them. Even under the most favourable cost conditions, there is a significant gap of at least €20-40/MWh between the production cost of RESfuels and the price of conventional fossil fuels. Greater policy and financial support is needed to decrease the high costs and risks of RESfuels to make them the stronger alternative. While regulations could make fossil fuels the costlier option, a combination of policy instruments such as obligatory quotas with feed-in tariffs can provide a stable investment climate for RESfuels and help bridge the gap.

Addressing high feedstock and production costs of RESfuels, ADVANCEFUEL proposes that innovations in breeding and selection, as well as improved logistics and agricultural management, have the potential to increase biomass yields and reduce costs, while innovations in crop rotation schemes could also be effective. A project-led study also reveals the significant role that marginal lands could play in sustainably securing biomass production for resource-efficient advanced fuel value chains; however, in the case of energy crops, this must also be backed by proper policies.

Drop-in products for cars have the potential to outperform fossil fuels when it comes to engine efficiency, fuel consumption and emissions limits. For aviation, liquid RESfuels are the only low-carbon alternative, while the shipping sector’s gaseous and liquid RESfuels are the only mid-term alternatives to conventional fuels since electrification is not possible.”

Conclusions and recommendations (Presented during the media briefing: How can Europe develop a market for advanced renewable fuels?)

Feedstock production

- Site specific innovations and the learning effect have the potential to further increase yields of lignocellulosic cropping.
- The use of marginal lands for lignocellulosic energy crop production is a valuable strategy to provide additional biomass. Availability of data on cropping area in EU and on achievable yields on marginal land need to be enabled for decision making that is based on quantitative data.
- Sustainable biomass feedstocks are present in Europe but their efficient and timely mobilisation remains a challenge: Rural land-use planning must be combined with incentives to produce biomass; Financial support measures should account for costs related to the infrastructure for the logistics related to waste and residue collection, as well as large scale energy crop production, supply and logistics; The roll-out of new innovations will need to be supported.

Conversion

- In short- to mid-term, the gap between advanced biofuel production costs and fossil fuels cannot be fully bridged by technical improvements.
- At an initial phase, this can be achieved via subsidies, but in the long run the cost to use fossil fuels must be (become) higher than the cost to use biofuels (e.g., via additional CO2 taxes for fossil fuels).
- Tailored financing mechanisms (such as feedstock premiums, feed in tariffs and premiums, CO2 taxes, etc.) are necessary to develop a secure framework to reduce capital investment and uncertainties of production costs.
- Funding schemes (e.g. European Innovation Fund), banks and financial institutions should increase budget shares for RESfuels in their investment portfolios.
- Research and innovation grants should ensure continuity in funding for RESfuels to overcome technical barriers such as process design (i.e. increase process efficiency) and scale-up considerations.

End use

- Ambitious decarbonization plans require deployment of all renewable options, increased efficiency of the transport system and significant shifts towards more energy efficient transport modes.
- RESfuels are likely to exhibit increased shares first in road transport, however it is critical to enable similar and timely shift to heavy duty vehicles, maritime and aviation which have less alternatives and are more challenging in terms of CO2 emissions reduction. Without tailored targets for these sectors this shift may be difficult to manage
- E-fuels, produced from renewable electricity and direct air capture, are essential to complement the contribution of advanced biofuels in transport decarbonisation. They can be particularly useful in aviation.
- Biomass to Liquid (BtL), pyrolysis oil co-processing, bioLNG, bioDME must be deployed before 2030 to ensure fossil diesel substitutes are in place to meet the targets.

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