T&E: Biofuels and e-fuels in trucks will make it harder for aviation and shipping to go green

Transport & Environment (T&E) on Tuesday (8 November) said biofuels and e-fuels in road transport would reduce available volumes for hard-to-decarbonise sectors, while doing nothing to bring down e-fuel prices for aviation and shipping. 

In a brief explainer, T&E said the EU climate targets will slash demand for oil and gas. As a result, fuel suppliers are investing in e-fuels and biofuels to replace them. 

“It is in their interest to maximise the number of sales markets for those fuels, despite hard-to-abate sectors such as aviation and shipping needing to prioritise fuels based on green hydrogen (and advanced biofuels in the case of aviation) for their own use,” it said. 

“However, as part of its market maximisation strategy, the fuels industry tries to convince aviation and shipping actors that they would benefit if road transport also used biofuels and e-fuels. They claim that ‘using e-fuels in trucks and buses will help scale up production, reduce their costs, and make them more available for planes and ships’. They also claim that ‘Road hauliers will bear most of the high cost, making e-kerosene almost free for airlines.’ This is incorrect, as this simple explainer will make clear.”

Currently, T&E said fuel suppliers are correctly incentivised to focus on aviation and shipping in the Renewable Energy Directive (REDIII) thanks to multipliers as well as an indicative RFNBO supply target for shipping.

The 1% transport sub-target for RFNBOs can be met by providing the required minimum supply of e-fuels

needed to meet sub-targets under ReFuelEU and FuelEU Maritime, without any need for additional e-fuels to be used in road transport. The aviation and shipping regulations provide the right regulatory incentives to prioritise truly advanced and sustainable biomass feedstocks for hard-to-abate sectors instead of using them to produce liquid and gaseous biofuels for road transport.

“However, opening the door to fuels in road transport could incentivise the exact opposite. If e-fuels

and biofuels are credited in the CO2 standards for heavy-duty vehicles (HDVs), fuel producers would have an incentive to only provide the minimum volume of e-fuels and biofuels to the aviation and shipping sector that is needed to fulfil regulatory sub-targets,” T&E said. 

“They would tool their refineries to the detriment of kerosene output and try to maximise the fuel volume going into road transport. The same logic applies to advanced biofuel feedstocks, where competing uses are already limiting access to sustainable sources, which should therefore be prioritised in non-electrifiable transport modes.”

“The adoption of this crediting system could jeopardise the aviation and shipping industries’ access to sustainable, affordable, and scalable renewable fuels and their chance to cut emissions and move towards climate neutrality.”

Note: The full briefing by T&E can be found here.

Photo credit: Chris Pagan on Unsplash
Published: 9 November, 2023