“The advanced and waste biofuels paradox: Availability and sustainability of advanced and waste biofuels”
The Advanced Biofuels Coalition, representing leading companies in the advanced biofuels industry, provides corrections to the claims made in the recent report by Transport & Environment (T&E). T&E’s report disputes the environmental benefits of advanced biofuels and claims that sustainable feedstocks are a scarce resource. It questions whether advanced biofuels can meet the EU’s long-term targets for decarbonizing the transport sector and states that advanced biofuels are increasingly susceptible to fraud. The Advanced Biofuels Coalition, committed to the highest sustainability standards and to supporting Europe’s transition to climate neutrality, addresses these claims below.
The key role of advanced biofuels in climate neutrality
While T&E’s report disputes the environmental benefits of advanced biofuels, these fuels significantly contribute to the EU’s climate neutrality goals when produced sustainably. Advanced biofuels, produced from wastes and residues listed in the Renewable Energy Directive’s (RED) Annex IX Part A, support a shift away from fossil fuels in the EU’s hardest-to-abate sectors by providing a domestic renewable energy source and reducing dependence on fuels from third countries. Published in February 2024, the European Commission’s study on the “development of outlook for the necessary means to build industrial capacity for drop-in advanced biofuels” confirms that advanced biofuels are crucial for reducing emissions in the transport sector. The study highlights their significant contribution to the Fit for 55 package and the EU’s climate neutrality objectives. This contribution is anticipated to grow in the future, while both the aviation and shipping sectors are expected to increasingly demand biofuels.
Furthermore, the International Energy Agency’s report from July 2024 reaffirms that sustainable biofuels play a vital role in decarbonizing transport, while transparent and internationally agreed GHG accounting is essential for their successful deployment. Research by a large international consortium for the Commission indicates that, with industry collaboration and successful R&D, advanced biofuels could achieve net emissions savings of 330 million tonnes by replacing fossil fuels, enhance energy security, and provide a market volume of 1.6% of EU’s GDP. This would create over 100,000 new jobs, bolster Europe’s competitiveness, while promoting the sustainable transformation of EU’s economies based on a circular bioeconomy.
Feedstocks listed in the RED’s Annex IX Part A do not have significantly higher-value competing uses that would restrict their availability for advanced biofuel production. Instead of being landfilled or incinerated, these feedstocks can and should be utilized for the production of advanced biofuels to reduce the Union’s dependence on crude oil for transport fuels. Consequently, the use of Annex IX Part A feedstocks also aligns with the principle of cascading use.
Feedstock availability for advanced biofuels
According to the Commission’s study mentioned above, the total biomass potential available for energy markets in the Member States and accession countries is estimated to range between 310–836 million dry tonnes for 2030 and 294–892 million tonnes for 2050. A study by Imperial College London, also cited in T&E’s report, indicates that the potential availability of sustainable biomass is very sufficient to meet the feedstock demand for advanced biofuels. The study estimates that the net biomass available for biofuel production could reach 126–262 Mtoe by 2030 and 101–252 Mtoe by 2050. These estimates are based on conservative assumptions, considering only feedstocks from agricultural, forest, and waste origins listed in Annex IX of the RED (Parts A and B), suggesting that the total potential of biomass is most likely to be higher. The International Council on Clean Transportation’s analysis projects an increase in the sustainable availability of agricultural residues across nearly all EU Member States over time. The Joint Research Centre, which is the Commission’s science and knowledge service, has reported that Europe has over 1 billion liters per year in advanced biofuels production capacity. To fully realize the potential of sustainable biomass, long-term development must be supported by substantial additional funding for research and development across the EU, along with the regulatory certainty needed to encourage industry investments.
Displacement emissions
According to the European Commission, feedstocks can only be added to Annex IX if there are no significant risks of distortive effects on markets, which would generally also imply a low risk of displacement emissions. However, making definitive statements about displacement effect is a highly challenging, because estimating alternative uses requires making a high number of rough assumptions. An added layer of complexity is that not all displacement is equal. Displacing a feedstock used for energy recovery, e.g. heating in a boiler which has more low-GHG options to decarbonize, is not as severe as a feedstock used for the production of chemicals which has much fewer alternatives. So instead of removing feedstocks from Annex IX-A based on highly uncertain data, the Advanced Biofuels Coalition recommends to focus on increased transparency into the decision making behind Annex IX and request that the Commission develops a recurring report publishing market data on the end-uses for feedstocks on Annex IX. With this information that is lacking today and based on rough estimates, displacement impacts can be much better studied.
Clarifying fraud risks and data gaps
The Advanced Biofuels Coalition emphasizes that fraud prevention is notably less of a challenge for Annex IX part A advanced biofuels, which adhere to the highest sustainability standards. By stating that advanced biofuels are increasingly susceptible to fraud, T&E draws an overly broad conclusion, as there are no significant fraud cases for advanced biofuels produced from Annex IX part A feedstocks. Furthermore, the establishment of the Union Database for Biofuels has been a significant step in the right direction. As the European Court of Auditors notes, however, the lack of comprehensive and reliable data on biofuel production and consumption globally continues to undermine effective policy analysis and design. Therefore, data collection efforts should have an increased focus on the origin of feedstocks and the detailed breakdown of biofuel types by feedstock to inform policy decisions and accurately measure progress towards renewable energy targets.
Developing a robust policy framework for advanced biofuels
A robust policy framework in support of sustainable solutions is the bedrock of a successful energy transition. According to a European Investment Bank study on liquid sustainable fuels, the strength of EU climate regulation puts the Union in a leading position to tackle climate change. However, the study identifies regulatory uncertainty as one of the factors “slowing project development and posing significant barriers to the large-scale mobilisation of project financing”. Considering the scale of up-front investment to develop sustainable fuels projects, protection against future regulatory changes and clarity from regulators are critical ingredients to support project development.
The report by Transport & Environment recommends removing certain feedstocks from the RED Annex IX list or limiting their contribution to RED targets. The Advanced Biofuels Coalition emphasizes that maintaining stability with Annex IX A feedstocks is crucial to provide policy stability for the EU’s biofuels sector and maintain investor confidence. Removing feedstocks would be detrimental to the industry. Furthermore, RED II includes a mechanism (Article 28, Paragraph 6) that allows the Commission to add feedstocks to Annex IX but not to remove them. Should the list be expanded in the future, this should be coupled with an increase the sub-mandate targets to mitigate risks to the current project pipeline.
To further integrate advanced biofuels into the European energy mix, specific support mechanisms—such as dedicated sub-mandate targets for advanced biofuels in FuelEU Maritime and ReFuelEU Aviation—are essential. Additionally, the RED III includes a combined target of 5.5% for advanced biofuels and RFNBOs to incentivize investments. Rather than overlooking the potential of advanced biofuels, Member States should seize the opportunity to set ambitious sub-targets for their use and include strategies to scale up production and uptake to meet the targets set out in RED III.
For more information, please contact us at: info@advancedbiofuelscoalition.eu.
