EU requires sustainable biofuels

The EU has a target of deriving 10 % of transportation fuel from biofuels by 2020. Thus, ethanol consumption in the EU will increase significantly in the future. The EU 27 Annual Biofuels Report published by USDA’s Global Agriculture Information Network states that the consumption of ethanol for conventional and advanced fuels in the EU will reach 1.498 billion gallons in 2011, whereas only 1.271 billion gallons will be produced domestically. This gap will have to be covered by imports. 

During 2011 and 2012, Germany and France remain the main markets, and Germany will import 30 % of its ethanol consumption.

RED Basics

The EU Renewable Energy Directive (Directive 2009/28/EC) establishes a common framework for the promotion of energy from renewable sources in the European Union. In the area of biofuels and liquid biomass for electricity and heat production, the EU set sustainability requirements for renewable fuels to qualify as meeting the mandatory renewable energy targets. With the RED in effect since Dec. 5, 2010, member states must transpose the directive into national legislation. Last July, the EU Commission approved seven certification schemes that companies can use to verify sustainability claims. The national legislation in Germany is based on certification by voluntary certification schemes.

The directive requires the use of sustainable biomass seeking to prevent companies from converting forest, peatlands or biodiverse grassland for the production of biomass for the use in biofuels for the EU market. Carbon-rich areas or areas with a high degree of biodiversity are not allowed to be used for the production of biomass for biofuels or liquid biomass for heat and power generation. If the land use has been changed after January 2008, biomass from this area cannot be certified as sustainable.

Furthermore, an RED requirement states that biofuels must achieve a reduction in greenhouse gases (GHG) of at least 35 % in comparison to fossil fuels. Beginning in 2017, the GHG emission savings target rises to at least 50 %, and in 2018 the target is at least 60 % for biofuels and bioliquids produced in installations in which production started on or after Jan. 1, 2017.

U.S. ethanol producers exporting into the EU can show that they fulfill these sustainability criteria by being certified under the framework of one of the certification schemes for sustainability and GHG emissions approved by the EU Commission. The EU recognized schemes can be used in all 27 member countries.

Opportunities

Sustainability certification is now the norm for exporting ethanol into the EU. In the German biofuels sector, for example, only certified biofuel can be used to meet the quota. There also is a potential for premium prices on certified products. It is a safe assumption that sustainability criteria will apply to other sectors in the future and that voluntary certification makes sense in order to satisfy increasing consumer demand for sustainable products. Sustainability certification of biomass and final biobased products also represents a huge opportunity in general: For the first time, ecological and social standards can be established in the global raw materials markets. It is important to seize this opportunity. Renewable energy producers can lead other sectors in achieving sustainability for future generations.