Oil giants attack biofuels target

Oil companies are fighting back against Commission proposals to introduce requirements to meet climate change targets.

The oil industry believes that the proposals published in January are incompatible with the Commission’s plans for biofuel.

In January this year, the European Commission proposed making the oil industry reduce its carbon dioxide (CO2) emissions by 1% per year over a ten-year period from 2011, as part of a revision to the fuels quality directive (FQD). In March, EU leaders agreed on a target of getting 10% of their transport fuel from plant-based biofuels by 2020, to reduce greenhouse gas emissions.

The FQD proposal was discussed at a stakeholder meeting hosted by the Commission last week (29 May). EUROPIA, the European association of oil companies, and CONCAWE, the oil industry research association, are arguing that the oil industry itself can do nothing to reduce the greenhouse gas intensity of mineral oil-based fuels, but they support the application of the proposed greenhouse gas mechanisms to biofuels. To achieve the 10% greenhouse gas intensity reduction only from biofuel, they estimate that biofuels would have to make up at least 16% of the EU fuel market. According to EUROPIA, Europe is not capable of producing the crops needed for a 16% share domestically, so meeting the emission reduction target would mean importing the necessary crops from distant countries such as Brazil, Malaysia and Indonesia, which would cost more, have fewer CO2 savings and have energy security implications.

EUROPIA also argues that in order to meet the required emission reduction target, petrol would have to be more than one-third ethanol. Most cars today struggle with the 10% ethanol blend recommended by the fuels quality review.

Lisa Boch Anderson of ExxonMobil said her company agreed with the EUROPIA estimates. Oil industry CO2 emission reductions would have to come from an increased use of biofuels, she said, because the potential for ‘upstream’ oil refinery efficiency improvements was limited by rising demand and the increasingly remote crude oil being drilled. Other technological options, including carbon capture and storage (CCS) for refineries, or hydrogen and electric cars, are not expected to be ready for large-scale use before 2020, according to Exxon and EUROPIA.

The Commission in its presentation to the meeting last week countered that the oil industry does have options for reducing emissions, including increased use of co-generation and use of waste heat, fuel switching, use of low greenhouse gas hydrogen, reduction of flaring and use of CCS for refineries. A Commission official said that "even the oil industry’s own figures show that efficiency improvements at refineries could reduce emissions by 1% over the ten-year period, while 30% of the fuels used at refineries could be switched to lower-emission alternatives".

The car industry rejects the oil industry’s argument. Sigrid de Vries of EU car industry representatives ACEA said it was "not a valid argument" to say a one-third ethanol blend would be needed to meet oil industry emission reduction targets. If more drivers switched to biofuels, she said, emissions would come down even on a low-ethanol blend.

She said that the first priority would have to be making biofuels more easily available. "We need tax incentives for biofuels and improved infrastructure, more suppliers," she said.

Stephanie Ho of the European Biodiesel Board said Europe should also be encouraged to switch from petrol towards diesel fuels, which need a lower blend of plant-matter to produce low CO2 emissions.

On Monday (4 June), both the environment and agriculture committees in the Parliament discussed the fuel quality proposal. Dorette Corbey, the Dutch Socialist MEP drafting the environment committee’s response, said that the greenhouse gas element was "an important and welcome step to achieve the climate goals which the EU has set itself".

Oil companies are fighting back against Commission proposals to introduce requirements to meet climate change targets.