Ecofys report concludes current European regulations underestimating GHG reductions

13 November 2014

Substituting biofuels for marginal fossil-based liquid fuels results in the avoidance of significant GHG emissions that are not currently accounted for in the European Renewable Energy Directive (2009/28/EC), according to a new analysis by the consultancy Ecofys. The study was commissioned by the European Oilseed Alliance (EOA), the European Biodiesel Board (EBB) and the European Vegetable Oil and Proteinmeal Industry (FEDIOL).

The European RED and the Fuel Quality Directive (2009/30/EC) both assess the GHG benefits of biofuels by comparing the lifecycle emissions of biofuels to a “fossil comparator”. However, the Ecofys authors note, the current comparator does not reflect the increasing emissions of fossil fuels that are becoming more difficult to extract. In addition, they argue, biofuels should not just be compared to the average performance of gasoline or diesel but with the fossil fuels they most likely replace—i.e. those that are marginally “not produced”.

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Unconventional oils such as extra heavy oil and bitumen (tar sands), kerogen oil (oil shale), light tight oil (shale oil), deep sea oil and synthetic products such as gas-to-liquids and coal-to-liquids, typically have higher carbon footprints than conventional oil mainly because the effort required to extract, refine and/or synthesize them is much larger than for conventional oil. As the share of these unconventional oil-based fuels gradually rises in the total fuel supply over time, the greenhouse gas footprint of the average fuel consumption also rises. Even for conventional oil production fields, because larger existing fields get depleted, the extraction efforts increase while smaller fields are taken in operation. Both effects increase the carbon footprint of conventional oil. Therefore the fossil comparator should be adjusted upward to reflect these changes.

Furthermore, in reality biofuels do not displace the average of fossil fuels brought on the market, but the marginal ones: those fossil fuels that are ultimately not produced because of a relatively lower and enduring demand following the introduction of biofuels. The marginal fuels are the resources that are most sensitive to long-term marginal price reduction, which is the main mechanism through which biofuels displace fossil fuels.

The Ecofys study first analyses the cause-effect relations of the marginal decrease of EU fossil fuel consumption (the effect of introducing biofuels) on the global development and exploitation of new fossil fuel sources. The study also investigates the carbon intensity of the four fossil fuel types that are most sensitive to a marginal reduced global demand for oil.

Based on the assessment that the marginal oil displaced by biofuels is a combination of oil sands, kerogen oil (oil shale) and light tight oil, the Ecofys team estimated that the marginal greenhouse gas emissions avoided by the introduction of biofuel are approximately 115 gCO₂eq/MJ—31.7 g/MJ above the average fossil fuel emissions as represented by the fossil comparator used in the European directives on Renewable Energy and on Fuel Quality. In other words, by taking the marginal approach, they found that the fossil fuels being displaced by biofuels would emit 31.7 g/MJ more than the current fossil comparator.

Comparison of well-to-wheel emissions from biofuels with fossil fuels using marginal approach. A range of EU RED typical emissions is plotted for ethanol (sugar beet 33 g/MJ, wheat 46 g/MJ) and for biodiesel (palm oil biodiesel with methane capture 32 g/MJ, rapeseed 46 g/MJ). Source: Ecofys. Click to enlarge.

While emphasizing that the 115 gCO₂ figure is an estimate, they also noted that sensitivity analysis shows that even in the unlikely scenario where only conventional fuels are being displaced, the emission factor should be at least 90 g CO₂eq/MJ.

In a case in which unconventional fuels with even higher emissions are being displaced, the number is potentially higher: 137.5 gCO₂eq/MJ.

The ‘marginal’ approach clearly shows that the true benefit of introducing biofuels is larger than is currently reflected through the use of the fossil comparator.

Recommendations. Based on their analysis, the Ecofys consultants recommend that the fossil comparator be adjusted to reflect the continuous shift in the fossil fuel market towards unconventional fuels, and that a fair comparison with fossil fuels should refer to the emissions of the fossil fuels being displaced—i.e. the marginal fossil fuels.

Further, the emission factors of various types of unconventional fossil fuels differ significantly and are changing fast with technological developments. Properly implementing the Fuel Quality Directive could provide a strong incentive to avoid the fuels with the worst greenhouse gas performance and thereby reduce the average emission factor of EU transportation fuels, they also suggested.

Full implementation of this policy would likely lead to a relatively reduced investment in and production of the most carbon intensive fossil resources, since they heavily depend on the European market. This would lead to significant reductions in both average and marginal emissions of fossil fuels, while at the same time driving improvements in the greenhouse gas performance of biofuels.

Resources

• Arno van den Bos, Carlo Hamelinck (2014) “Greenhouse gas impact of marginal fossil fuel use” (Project BIENL14773)