Overview of biofuel policies and markets across the EU-28
Transposition of the RED-FQD as amended by the ILUC Directive
• Legal basis:
o The Renewable Energy Directive 2009/28/EC (RED) and the Fuel Quality Directive (FQD) as amended by Directive 2009/30/EC have been transposed in all 28 Member States.
o Directive 2015/1513/EC (referred to as the ‘ILUC Directive’) amending the RED and FQD was to be transposed by 10 September 2017. To ePURE’s best knowledge, 19 Member States have implemented it: Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Hungary, Italy, Luxembourg, Malta, Spain, Sweden, Slovakia, Lithuania, Poland, Portugal, Netherlands and the UK. Five Member States are in process of transposing it into their national legislation: Bulgaria, Latvia, Ireland, the Czech Republic and Greece.
• Crop cap:
o Within those Member States which have fully transposed the ILUC Directive: Austria, Belgium, Croatia, Spain, Estonia, France, Finland, Hungary, Sweden, Slovakia, Malta, Lithuania, Poland, Portugal, Denmark and Italy have introduced the 7% crop cap. Luxembourg has not specified its level while Germany decided to lower it to 6.5% and the UK to 4%, with further reduction post-2020. The Netherlands sets the cap at 3% for 2018, 4% for 2019 and 5% for 2020.
o Within those Member States which are in the process of transposing the ILUC Directive: Bulgaria and Greece proposed to set the cap at 7%, while the Irish authorities have no plans to deviate from the 7%. In Latvia, the cap is included in the draft law, while in Czech Republic the crop cap has not been introduced.
• Advanced biofuels:
o Within those Member States which have fully transposed the ILUC Directive: Austria, Estonia, Finland, Lithuania, Portugal and Malta set the sub-target for advanced biofuels at 0.5%. Spain, Portugal, France, Croatia, Slovakia, Belgium, Germany and Poland have decided to set a sub-target lower than 0.5% by 2020. Denmark and Italy have increased the value above 0.5%. There is no subtarget set in the legislation in Hungary, Sweden and in the UK. The Netherlands sets the sub-target for advanced for at least 0.6% for 2018, 0.8% for 2019 and 1% for 2020, double counted.
o Within those Member States which are in the process of transposing the ILUC Directive: Latvia and the Czech Republic propose a sub-target at 0.5%. Bulgaria proposes to set the sub- target for advanced biofuels at 0.05% in 2020, while Greece and Ireland would endeavour to achieve 0.2% and 0.25% respectively.
• The double counting mechanism for biofuels is in place in 20 Member States. It is in process of being implemented in the Czech Republic, while in Spain it is not operative yet. To ePURE’s best knowledge, those countries that do not have double counting are Bulgaria, Sweden, Lithuania, Latvia and Germany.
Biofuels and decarbonisation targets
• Biofuels targets:
o In 2018, 26 of the 28 Member States have some sort of biofuels incorporation obligation:
▪ 14 had an overall biofuels incorporation target;
▪ 8 had placed a differentiated renewables obligation in petrol or diesel or both;
▪ 4 had both an overall biofuels obligation and differentiated incorporation obligations in petrol and /or diesel.
o 2 Member States do not have mandatory biofuels incorporation but rely solely on targets for the reduction of the carbon intensity of transport fuels: Germany and Sweden as of July 2018.
• GHG reduction targets for transport fuels: Article 7a of the FQD requiring the decrease of transport fuels’ GHG intensity is implemented in all Member States. In Germany, the 6% emissions reduction targets applies to 2020 and beyond.
• Penalties: In 24 Member States where biofuels incorporation obligations are in place, as well as in Germany and Sweden, fuel suppliers that fail to meet their obligation are liable to a penalty or can pay a buy-out price. There is no penalty system for suppliers that do not fulfil the biofuel obligation in Latvia and Denmark.
• Tax incentives for biofuels/or blends: Most of the countries do not have differentiated fiscal frameworks for biofuels. Austria, Croatia, Czech Republic, France, Sweden, Slovakia, Denmark, Lithuania, the Netherlands, Slovenia and Portugal have incentives in order to increase the use of biofuels. In France, E10 and E85 are taxed less while in Sweden and Denmark the taxation is reduced based on the CO2 of the fuels. In Finland transport fuels are taxed on their energy content and CO2 footprint. Latvia and Czech Republic apply a reduced excise duty rate on E85 that also theoretically applies in Netherlands (although E85 is no longer offered in the Dutch market). Furthermore, the excise duty rate for biofuels is set at 0% in Croatia and Slovenia, while in Portugal biofuels produced only by small producers benefit from excise tax exemption.
Assessment of Member States’ progress in reaching 2020 objectives
• Achieving the 10% renewable energy share in transport (RES-T) target: The gap between renewable energy in transport forecasted in the 28 EU National Renewable Energy Action Plans (NREAPs) and the actual consumption has widened over the last years. In 2016, the gap between the actual uptake of RES-T and the uptake forecasted by NREAPs was 7,669 ktoe. Steep efforts are required by Member Sates if the EU is to meet its 10% RES -target.
• Forecasted bio-gasoline consumption vs actual consumption: In the case of bio-gasoline (including ethanol), the actual uptake has remained relatively flat since 2010, averaging 2,745 ktoe. This uptake drastically contrasts with the increase forecasted by the 28 Member States. In 2016, the gap between the actual uptake and the one forecasted by the NREAP was 2,636 ktoe.
• Forecasted biodiesel consumption vs actual consumption: In the case of biodiesel, the gap between the actual uptake of biodiesel and the forecasted by the NREAP was 4,715 ktoe in 2016. The market uptake has also remained relatively flat from 2010 to 2015 with a marginal decrease in 2013 and 2016.
Market data for biofuels and passenger cars
• RES incorporation rates in petrol: The incorporation rate of bio-gasoline into the petrol pool has slowly increased from 2012 to 2015 then decreased in 2016 to 3.37%. Consumption of unleaded petrol (unspecified or E0) has been declining from 2012 to 2016, being replaced by: o unleaded petrol E5, whose consumption has remained at similar levels since 2013, and which represents the vast majority of the petrol market; o by E10, the consumption of which has been growing since 2013, reaching more than 9% of the petrol market in 2016; and o E+ (mainly E85) marginally, with a flat consumption of around 0.1% of the petrol market since 2013.
• The Renewable Energy Share in Transport in 2016 was 7.13% on a RED calculation basis. Within the RES- T, the share of biofuels was around 81%, also on a RED basis. Without the multipliers, this share was around 88%. Crop-based biofuels represented the major contributor to the renewable energy pool in Europe, both with and without multipliers.
• EU 15 - Sales of new passenger cars by fuel type in 2016: In 2016, 49.9% of all new passenger cars sold in EU-15 ran on diesel and 45.8% on petrol. Among alternative-fuelled vehicles (AFV), which represented 4.3% of the new passenger cars sales in 2016, hybrid (HEV) accounted for 1.9%, electrically chargeable vehicles (ECV) for 1.1% and other alternative-fuelled vehicles (Other AFV) for 1.2%. Moreover, the share of petrol cars sold in Germany, Denmark, Finland, the Nethearlands and in the U.K. is higher than the EU average. The share of alternative-fuelled vehicles sold in in Finland, Italy, the Netherlands and Sweden was also higher than the EU-15 average.
• EU passenger car fleet by fuel type in 2015: In the EU, more than half of all passenger cars raun on petrol. Diesel and petrol clearly dominated the market in 2015. On average, the share of alternative-fuelled vehicles (AFV) reached 3.18% in 2015.