European Biofuels Markets
Introduction to European Biofuels Markets
Development of sustainable advanced biofuels is part of the Strategy for a Sustainable European Bioeconomy proposed by the European Commission in February 2012 to shift the European economy towards greater and more sustainable use of renewable resources and processes (for food, feed, energy and industry).
- developing new technologies and processes for the bioeconomy;
- developing markets and competitiveness in bioeconomy sectors;
- pushing policymakers and stakeholders to work more closely together.
In 2009 the EU bioeconomy had a turnover of nearly €2 trillion (2012) and employed more than 22 million people, 9% of total employment in the EU. The statistic included agriculture, forestry, fisheries, food and pulp and paper production, as well as parts of chemical,biotechnological and energy industries. Each euro invested in EU-funded bioeconomy research and innovation was estimated to trigger €10 of value added in bioeconomy sectors by 2025.
Market development of advanced biofuels for road transport, aviation and shipping
EEA published a report "Renewable Energy in Europe - 2017 Update - recent growth and knock on effects", which provides a detailed annual assessment of RES since 2005.
The following table is reproduced from the report and shows the actual final renewable energy consumption in transport for 2005, 2014 and 2015, approximated estimates for 2016 and the expected realisations in the energy efficiency scenario of the NREAPs for 2020.Also shown are the actual compound annual growth rates for 2005 - 2015, the growth from 2014 to 2015 and the compound annual growth rates required to reach the expected realisation in the NREAPs. The consumption of RES accounts for only biofuels complying with RED sustainability criteria. Sources EEA, Eurostat 2017b; NREAP reports .
Renewable Transport in the EU 28: Biofuels; Source: EEA Report No 23/2017 "Renewable Energy in Europe - 2017 Update"
In November 2017, the International Energy Agency published a “Technology Roadmap: Delivering Sustainable Bioenergy”, which provides the technology milestones and policy actions needed to unlock the potential of bioenergy in line with a long-term low-carbon and sustainable global energy mix. According to the roadmap, biofuel consumption in the transport sector must triple by 2030, with two-thirds of that coming from advanced biofuels. That means scaling up current advanced biofuels production by at least 50 times to keep pace with the 2DS requirements by 2030. In scenarios with more ambitious carbon reduction objectives, such as the IEA’s Beyond 2 Degree Scenario (B2DS), bioenergy linked to carbon capture and storage also becomes necessary.
Bioenergy in final energy consumption needs to double by 2030, and biofuels in transport treble. Advanced biofuels will need a massive scale up; Source: IEA
The IEA’s technology roadmap shows how that gap can be bridged, and highlights various areas where urgent action is needed, such as accelerating the deployment of a range of mature bioenergy solutions, which can immediately deliver multiple benefits, and enabling the deployment of the new technologies which are needed in a future low carbon energy system. In January 2017, IEA also published a How2Guide for Bioenergy, jointly developed with the Food and Agriculture Organization of the United Nations (FAO), as a toolbox that can be used for both planning and implementing new bioenergy strategies, or to improve existing ones.[Source: IEA Press releasefile].
The ICCT published a white paper in September 2017 on lessons learned for successful market introduction of advanced alternative fuels. The paper “Effective Policy Design for Promoting Investment in Advanced Alternative Fuels” finds that policy requirements are:
• Long-term (10 years) stable policy
• Avoid competition with first-generation biofuels
• Deal with sustainability up front
• Support offtake of advanced alternative fuels
• Assure cost containment for obligated parties
The full report identifies and analyzes lessons learned from the past decade of policy experience. These can help inform the design of many policy types that may be implemented in the future.
Information on market development initiatives are provided on the individual pages covering road transport, shipping and aviation. See the ETIP deployment support measures database which collates information on initiatives and supports to accelerate use of advanced biofuels at national and international level.
Statistics and market information are available from:
- ESBF - European Sustainable Biofuels Forum
- EBB European Biodiesel Board
- ePure - European Renewable Ethanol Association
There has been a specific focus on development of alternative aviation fuels within the European Union - partly because liquid biojet fuels are currently the only alternative to fossil fuels for air transport (i.e. electrification is not an option). In 2011 the EC, in coordination with Airbus, leading European airlines (Lufthansa, Air France/KLM, & British Airways) and key European biofuel producers (Neste Oil, Biomass Technology Group and UOP), launched an initiative to speed up the commercialisation of aviation biofuels in Europe. The initiative, labelled "European Advanced Biofuels Flight path" is a roadmap with clear milestones to achieve an annual production of two million tonnes of sustainably produced biofuel for aviation by 2020. Further information is provided on the aviation biofuels page of this website.
In recent years, market development of biofuels in Europe has been driven by binding targets set in the Renewable Energy Directive for 10% of renewables in transport energy use by 2020. Public concerns over land use issues have led to the amendment of the Renewable Energy Directive in 2015 (EU/2015/1513) which caps the use of conventional biofuels derived from crop plants at 7%. At the same time it obliges Member States to implement a target for biofuels from non-food feedstock of at least 0,5% in transport energy in 2020. As a further incentive the amendment rules the double-counting of the energy contents of advanced biofuels towards the renewable energy target of 10%. Hence the future expansion of biofuels markets in Europe is dependent on the commercial deployment of advanced biofuels that use wastes, residues and energy crops (grown on marginal land) as feedstocks. In addition, electricity from renewable resources for rail transport is counted 2,5 times and for road transport 5 times the energy content.
ePure position during the negociation of the RED amendment
In 2013, in preparation of the amendment of the Renewable Energy Directive, ePure, the association of the European ethanol producing industry, published a study on the double counting proposal: Double Counting, Half Measures: Study on the effectiveness of double counting as a support for advanced biofuels. The study concludes with alternative measures to accelerate deployment of advanced biofuels:
- Increasing the weighting of advanced biofuels towards the target for 10% renewables in transport will not help reducing GHG emissions from transport by 2020;
- A dedicated sub-target for innovative advanced biofuels technologies, with high enough penalties to prevent buy-outs;
- A strong, long-term and stable framework beyond 2020;
- Dedicated investment support for first-of-its-kind plants.
JEC biofuels programme
The JEC research collaboration started in 2000 bringing together:
- Joint Research Centre of the European Commission, (IET institute)
- EUCAR, the European Council for Automotive R&D
- CONCAWE, the Oil Companies’ European Organisation for Environment, Health and Safety
The JEC research collaboration provides scientific facts to European institutions, Member States and sector stakeholders relating to the energy use and efficiency and emissions from a broad range of road vehicle powertrain and fuel options.
The JEC Biofuels Programmes (2008-2010; 2011-2014) assessed the possible biofuel implementation scenarios for achieving EU renewable energy targets in the transport sector by 2020. These scenarios were assessed by modelling and other analyses.
In 2014 the JEC consortium came up with a revised version of its first report of 2011. The reference scenario and three fuel demand scenarios have been re-developed and tested on the legislative concepts proposed by EU institutions to modify the RED and FQD regulation with a view to including ILUC concerns. The revised reference scenario has been compared to the outcomes of the JEC Biofuels Study in 2011 to identify and characterise the main drivers behind different results on the capacity to attain the RED and FQD targets. The main conclusions to be drawn from the analysis performed in this revised version of the JEC Biofuels study using the F&F model and a revised bottom-up supply outlook for advanced biofuels are:
- None of the scenarios, tested againstthe legislative concepts, will achieve the RED and FQD targets.
- The introduction of an accounting cap on conventional biofuels towards achieving the RED target will diminish the potential impact of higher biofuel blends. It will also affect the use of drop-in fuels from such sources to blend beyond the current (diesel) grade.
- ´Switching to low-ILUC risk feedstocks has the potential to have a major impact on achieving the FQD and RED targets but is expected to be limited by feedstock availability.
Examples of older EC Projects on development of markets for biofuels
BIODIENET - Developing a network of actors to stimulate demand for locally produced biodiesel from used cooking oils (EIE/06/090/S12.448899)
BioDieNet aimed to involve Energy Agencies across Europe in the local production and distribution of biodiesel from used cooking oils (UCO), stimulating demand for higher concentrations of this biofuel. The 17 partners in 10 regions will form a network to share expertise and experience and provide specific, practical information, education, dedicated tools and support to help set up and maintain projects which result in greater uptake of locally-produced biodiesel by public and private vehicle fleets as well as individual vehicle owners.
BIODIESEL CHAINS - Promoting favourable conditions to establish biodiesel market actions (EIE/05/113/S12.420022)
The Biodiesel Chains project aims to understand & promote favourable conditions for the establishment of biodiesel market chains in selected countries which have had limited developments to date. The work focuses on countries – Greece, Belgium, Poland, Cyprus, Romania & Bulgaria – that are making limited progress in creating markets to achieve European liquid biofuel policies & targets.
BIOFUEL MARKETPLACE - Web-based Biofuel Marketplace for Supporting the e-commerce of Biofuel Products and Technologies (EIE/05/022/S12.420009)
The Biofuel Marketplace project will act as an interactive web-based forum where Europe’s biofuel actors can promote their technologies, exchange ideas, sell and buy biofuel products, disseminate results of national, international and European research activities and raise the awareness both of the public and the professional community. The on-line supply and demand information system is expected to encourage the further exploitation of the EU biofuels potential.
BIOGASMAX - Biogas Market Expansion to 2020 (FP6 - 019795)
The overall goal of this project is to reduce dependency on oil, reduce greenhouse gases and direct emissions through increased and more efficient production, distribution and use of biogas in the transport sector generated from a wide variety of feedstock available in urban areas and regions in Europe. The project adopts the well-to-wheel approach to identify the potential for efficiency gains and cost optimisation to ensure market expansion. It aims to prove the technical reliability, cost-effectiveness, environmental and societal benefits of biogas fuels and perform large-scale demonstrations to optimise industrial processes, experiment and benchmark new and near-to market techniques and expand biogas fleets as well as to identify and assess ways to remove technical, operational, organisational/institutional barriers, which can inhibit or prevent alternative motor fuels and energy efficient vehicles from entering the market.
BIOMOTION Biofuels in Motion (IEE)
This project aims to increase the use, knowledge and acceptance of biofuels. An international cluster of relevant actors and seven biofuel information centres will be established. A number of highly visible examples, or "beacons", will be used to demonstrate the use of various raw materials for the production of different biofuels on a commercial scale. The BioMotion Tour, with vehicles powered by several types of biofuels, will show the advantages of using biofuels. The project should encourage the development of biofuel supply chains and highlight market opportunities, particularly in rural areas. In addition to professional advice, the project contains specific motivation and PR actions aimed at particular target groups in accordance with the motto: Bio fuels in Motion by Information and Motivation.
BIOPROM Bioenergy-Promotion - Overcoming the non-technical barriers of project-implementation for bioenergy in condensed urban environments (Altener EIE-04-38585)
This project aimed to overcome non-technical constraints of the realisation of bio-energy projects in densely populated urban areas and to bring bioenergy projects on their way by establishing a network of actors and stakeholders of the bioenergy sector in five European regions. Biogas, biofuel, wood chip and wood pellet projects are considered within the project. The five different EU regions involved in this project lie in France, Slovenia, Austria and Germany.
BOOSTING BIO - Boosting Bioenergy in Europe (Altener EIE-04-38592)
The main aim of this project was to boost bioenergy use in Europe through targeted actions in 2005 and 2006, developing a vision for bioenergy in 7 EU Member States and consultation with policy makers and private companies. The vision for bioenergy will be worked out with a strategy to develop bioenergy further, based on a market analysis where financial instruments will be taken into account. This strategy will be integrated with views from national decision makers and industries in order to evaluate it.
CAB-CEP (BIOFUELS CITIES) - Biofuel Cities European Partnership (FP6 - 020085)
The Biofuel Cities project develops and maintains the 'Biofuel Cities European Partnership' in order to demonstrate the broadscale use of new and innovative biofuel technologies. Biofuel Cities covers the complete chain from feedstock to biofuels production, distribution and utilisation in vehicle fleets. The 'Biofuel Cities European Partnership' is set up with the aim to become a permanent institution.
CARBON LABELLING - Carbon Efficiency Labelling & Bio-Blending for Optimising benefits of Biodiesel & Additive Use (EIE/06/015/S12.442654)
The Carbon Labelling project implements several labelling measures in Europe which focus on transportation products and services with low CO2 emissions. The project promotes biodiesel, fuel efficiency improvements and ‘low carbon’ freight services. This first European carbon labelling initiative helps meeting greenhouse gas reduction targets of the European Union, reduces petroleum dependence and helps to combat climate change.
ELOBIO Effective and Low-disturbing Biofuels (EIE-07-139-S12.467616)
This project develops low-disturbing policy options, enhancing biofuels but minimising the impacts on e.g. food and feed markets, and markets of biomass for power and heat. The project consists of a review of current experiences with biofuels and other RE policies and their impacts on other markets, iterative stakeholder-supported development of low-disturbing biofuels policies, model-supported assessment of these policies' impacts on food & feed and lignocellulosic markets, and finally an assessment of the selected optimal policies on biofuels costs and potentials.
HyLights - Hydrogen for Transport in Europe (FP6 - 019990)
This is a coordination action that aims to accelerate the commercialisation of hydrogen and fuel cells in the field of transport in Europe on the basis that hydrogen enables the transport sector to phase in renewable energies on the path to cleaner mobility. HyLights will draw on a network of relevant experts. For this purpose an European Partnership for Hydrogen in Transport (EPHT ) will be established to extend the reach of the European Hydrogen and Fuel Cells Platform (HFP).
MADEGASCAR - Market development for gas driven cars (IEE)
MADEGASCAR (Market development for gas driven cars) is a project operating from September 2007 to January 2010, funded by the IEE programme. The project aims at developing the market for gas driven vehicles – natural gas and biomethane fuelled vehicles – with the overall goal to increase the number of energy efficient and alternative fuelled vehicles in European countries. The project will address existing barriers by creating more acceptance on the consumer side, educating fleet owners as well as car dealers, incentive programmes and by awareness raising and information activities. On the other side activities for a better supply infrastructure (fuel stations) and market structure, including the integration of biogas, will be carried out.
PREMIA - R&D, demonstration and incentive programmes effectiveness to facilitate and secure market introduction of alternative motor fuels (FP6 - 503081)
This a Specific Support Action that aims to assess the effectiveness of measures to support the market introduction of alternative motor fuels, taking into account the national context of member states. Three categories of fuels are envisaged: bio fuels, natural gas and hydrogen. Certain alternative fuels are closer to market maturity than others. Bio fuels could achieve market maturity rather soon (estimated up to 2010), while hydrogen is much further away (estimated up to 2020). Although a general European approach is most obvious, country-specific conditions and constraints may require different approaches in different countries. The strategy to introduce alternative motor fuels is best adapted to the specific country legislation, the available resources (e.g. land for bio fuels), supply opportunities and available energy sources and available infrastructure - so especially for the new member Countries a specific approach may be needed.
PRO-BIODIESEL Overcoming Non-Technological Barriers For Full-Scale Use of Biodiesel In Europe (Altener EIE-05-111)
The general objective of this project was to promote biodiesel as a competitive and commercial product in the European fuel market, using the broadest range of raw materials both from North and South-Europe and considering all the agents involved. One of the aims was to successfully put in the market 35,000 t/year of biodiesel, which represents an increases of 2.3% biodiesel on the production of EU-25 in 2003.
REFUEL Renewable Fuels for a Sustainable Europe (Altener EIE-05-042)
The object of this project is to develop a roadmap for biofuels to reach a target market penetration in 2030 in an effective way. It expects to deliver a meaningful road map that is consistent with EU policies and which has been discussed and agreed by a wide range of stakeholders resulting in a biofuels scenario consistent with a target market penetration in 2030 together with a design of the required supply chain and market structure, the assessment of costs and potentials and the short and long term barriers to implementation.
The aim of this project was to bring together information and future perspectives concerning the use of biofuels for transportation. It aimed to assist policy makers, NGO's and industrial decision makers in the selection of optimal pathways for the development and market introduction of biofuels in Europe. The project has now ended and many of the features have been transferred to the coordination project Biofuel Cities
ZERO REGIO - Lombardia & Rhein-Main towards Zero Emission: Development & Demonstration of Infrastructure Systems for Alternative Motor Fuels (Bio-fuels and Hydrogen) (FP6 - 503190)
This project has the overall objective of developing low-emission transport systems for European cities. The specific objectives of the project are to demonstrate the use of hydrogen as an alternative motor fuel, produced as primary or waste stream in a chemical plant or via on-site production facilities; development of infrastructure systems for alternative motor fuels ( bio-fuels & hydrogen) and integrating them in conventional refuelling stations. This will include demonstration of 700 bar refuelling technology for hydrogen blends of bio-fuels in fuel flexible vehicles, demonstration of alternative fuels via. automobile-fleet field tests at two different urban locations in the EU, Rhein-Main, Germany and Lombardia, Italy and demonstrating ways and prospects for faster penetration of low-emission alternative motor fuels in the market at short and medium term.