Sustainable Transport and Biofuels

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Sustainable Transport and Biofuels

• Lisa Ryan
• Director of Research

22nd January 2009 IrBEA Annual Conference
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Presentation structure

• Introduction to Comhar SDC
• Policy Context EU and Irish
• Sustainable transport policy
• Biofuels component and policy
• Conclusions

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Comhar SDC - Structure

• Established by government in 1999 building on
  experience of social partnership
• Mandate from Minister for Environment
• Independent chairman and 25 members representing
  stakeholders from 5 pillars
• Environmental
• Community
• Economic
• Professional/ academic
• State
• 3rd term commenced January 2006.

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Comhar - Objectives

• Advise Government on policies which support
  sustainable development
• Engage with wider stakeholders and public to win
  support for sustainable development
• Bring added value to existing work and avoid
  duplication of work undertaken by other bodies
• Draw on broad representation to come to informed
  and balanced conclusions.

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What is Sustainable Development?

• Brundtland definition
• Development that meets the needs of the present
  without compromising the ability of future
  generations to meet their own needs

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Climate change and transport policy context

• Programme for Government (agreed June 2007) in
  Ireland
• The Government will set a target for this
  administration of a reduction of 3 per year on
  average in our greenhouse gas emissions.
• Appropriate fiscal instruments, including a
  carbon levy, will be phased in on a
  revenue-neutral basis over the lifetime of this
  Government.
• 23rd January 2008 European 20-20-20 Climate
  Change and Energy Package
• The mainstay of the new policy is a core energy
  objective for Europe that the EU should reduce
  greenhouse gas emissions by 20 by 2020. This
  objective will enable the EU to measure progress
  in re-directing today's energy economy towards
  one that will fully meet the challenges of
  sustainability, competitiveness and security of
  supply.

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EU Renewable Energy Directive (agreed 9/12/2008)

• 20 share of renewables in overall EU energy
  consumption by 2020
• Ireland assigned 16 renewable energy target of
  final energy consumption by 2020
• All Member States 10 renewables in transport by
  2020
• Sustainability criteria must be met
• Electricity and 2nd generation biofuels count for
  more than other RES in transport
• Electricity in transport 2.5 times the energy
  content of the renewable electricity input.
• Biofuels from wastes, residues, non-food
  cellulosic material, and ligno-cellulosic
  material 2 times energy content other biofuels.
  
• Sustainability requirements less strict.

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EU Biofuels Sustainability Criteria

• Sustainability criteria applied to European and
  imported transport biofuels and bioliquids.
  Commission to report on sustainability scheme for
  other biomass by 31/12/2009.
• Greenhouse gas savings from the use of biomass
  fuels in transport - 35 until 2017 50 from
  2017 (60 for installations after 2017).
• Biofuels not made from raw material obtained from
  land with high biodiversity value such as primary
  forest and other wooded land, highly biodiverse
  grassland, areas designated for nature protection
  purposes etc.
• Rrestriction for high carbon stock land
  (wetlands, forest land with more than 1 hectare
  with trees higher than 5 m and a canopy cover of
  more than 30, peatland (unless it is proven that
  the cultivation and harvesting of this raw
  material does not involve drainage of previously
  undrained soil).
• Other restrictions related to indirect land
  change, soil, water and air protection.
• Sustainability criteria review in 2014 focus on
  min. GHG emission saving, indirect land use
  changes, social impacts, biodiversity,
  availability of electricity or hydrogen from
  renewable sources etc.

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(No Transcript)
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Non-ETS sectors
Mt CO2e
Source EPA GHG Projections to 2020, September
2008.
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Irish GHG Emissions Projections
Kyoto target 62.8Mt
EPA 2008
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Transport Context

• Environmentally, transport faces a huge challenge
  in meeting the non-trading sector obligation of
  reduced GHG emissions by 20 by 2020, other
  issues are congestion, noise, safety, access to
  services.
• Economically, the challenge is to achieve a
  sustainable transport system at least cost, to
  meet the carbon constraint, to reduce congestion
  and associated travel times, and reduce our
  dependency on oil.
• Given budgetary constraints, it is difficult to
  see how sustainability can be achieved without a
  carbon tax that is recycled to fund key features.

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How to reduce transport impacts on the
environment ?

• Reduce the negative impacts produced per
  kilometre of travel, i.e. cleaner vehicles and
  fuels
• Reduce the number of kilometres travelled per
  vehicle
• Reduce the number of vehicles travelling.

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Comhar SDC input to STTAP

• Series of expert seminars
• June 2007 cycling and walking
• September 2007 rural transport and social
  exclusion
• November 2007 transport demand management with
  information measures
• December 2007 transport demand management with
  fiscal measures
• January 2008 road freight transport

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Key Measures

• Ensure that the five Is are in place
• Incentives (Fiscal measures)
• Integration with planning
• Information
• Institutional arrangements
• Infrastructure

Need the collaboration of the Department of
Finance and Environment Heritage and Local
government
Mainly within the scope of Department of Transport
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Policy context for Biofuels

• Potential to reduce greenhouse gas emissions,
  support rural communities, diversify energy
  supply.
• EU climate and energy package includes 10
  renewables in transport target by 2020.
• May be met through use of electricity from
  renewables in biofuels or use of biofuels
  directly as fuels.
• Cost of biofuels higher in most countries than
  fossil fuels (particularly now) in terms of GHG
  mitigation costs 200-1000/t CO2 saved.
• Policy measures to promote biofuels
• Excise duty relief
• Obligation schemes
• Subsidies to farmers
• Carbon taxes

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Irish Policy context

• 205 million has been granted in excise duty
  relief under the Mineral Oil Tax Relief Schemes
  (MOTR).
• Excise relief is expensive to the Exchequer and
  under MOTR is only given to selected companies.
• SEI commissioned Liquid Biofuels Strategy Study
  for Ireland in 2004 to assess Irish biofuels
  resources.
• Found that realistic estimate of Irish biofuels
  production could replace 2.3 of transport fuels
  in 2010.

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2007 EU 27 Biofuels Consumption
(toe)
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Public Consultation on Biofuels Obligation Scheme
in Ireland

• Operated by Department of Communications, Energy,
  and Natural Resources
• Obligation scheme proposed from 2009
• as the primary means of facilitating the
  sustainable development of biofuels in Ireland
• Issues in Consultation document
• International markets
• Sustainability Concerns
• Habitat and Ecosystem Preservation
• Land use Change
• Emissions
• Energy Security

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Main Proposal Details

• Obligation level 4 by volume
• Obligated parties suppliers of petrol and diesel
  at the point of excise duty application
• Eligible fuels all renewable transport fuels,
  but aviation and marine bunker fuels excluded.
  The fuels must meet the EU sustainability
  criteria (35 GHG savings).
• All registered fuels suppliers must report the
  biofuels sold and the administrator will award
  certificates to the supplier. At the end of the
  year, the supplier must demonstrate that they
  have enough certificates. If the supplier does
  not have the required amount, he is allowed to
  purchase certificates from other suppliers.
• Any supplier without enough certificates must pay
  a fine (called a levy).

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Biofuels Obligation Scheme (BOS)Comhar SDC
recommendations (1)

• Purpose of the scheme should be made clear
• to increase the share of renewable energy in
  transport? Or more strategic...
• to reduce greenhouse gas (GHG) emissions from
  transport?
• increase rural development?
• to increase the security of Irish energy supply?
  Depending on the chosen goal, the scheme should
  be designed accordingly.
• Regulatory Impact Assessment for the scheme is
  needed. Necessary to identify the impact of the
  scheme on
• Environmental impact estimated CO2 emissions
  savings?
• Employment / Rural development
• Agricultural practices
• Production of other crops
• Macroeconomic impacts.

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BOS Comhar recommendations (2)

• Target metric should be changed from volume to
  energy equivalent substitution or GHG emissions
  saved, depending on the priority of the scheme.
  Volume target may not mean anything in terms of
  how much energy is replaced or GHG emissions are
  saved.
• If volume-based scheme is used - increased
  credits or certificates should be awarded to
  suppliers of biofuels with higher greenhouse gas
  emissions savings.
• Incentives needed to supply advanced or 2nd
  generation indigenously-produced fuels.
• Benefits and costs of this measure should be
  estimated at different levels of biofuels
  penetration on the Irish market in order to
  properly evaluate the merits of the scheme.

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Certificates vs GHG emissions reductions

• Biofuels with higher GHG savings should be
  incentivised.
• A potential system could be the following
• gt35 savings 1 certificate
• gt50 savings 1.5 certificates
• gt75 savings 2 certificates
• Similar scheme for 2nd generation biofuels
• Social benefits of domestic biofuels to be
  estimated to determine value of same.

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Conclusions

• Improving sustainability of Irish transport
  represents huge challenge.
• EU non-ETS target for Ireland will be difficult
  to achieve agriculture and transport main
  sectoral challenges.
• Biofuels can help solve GHG emissions part of the
  problem. Clear, long-term objectives are needed.
• Rural communities can benefit and incentives
  should be provided to encourage fuels with GHG
  emissions savings - sustainable transport and
  bioenergy development.
• Design of incentives must promote sustainable
  biofuels and future technologies.

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• Lisa Ryan
• Comhar SDC
• Lisa.ryan_at_environ.ie
• 353 (0)1 8883917

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Consultation Document Questions

• At what level should the Obligation be set?
• Is the definition of an Obligated Party correct?
• Should there be a De Minimis level?
• Should multi annual banking of certificates be
  allowed?
• Incentivisation for Second Generation Biofuels
  and Biogas?
• How should the Levy System work?