Between politics and pandemic one could be forgiven for not closely following Europe\u2019s bioeconomy. But as we scan the globe for bio-economy green shoots, we are noticing some interesting \u2013 and disconcerting \u2013 activity \u201cacross the pond\u201d. Today we look to Europe and try to pluck the signal from the noise in Brussels amid promising commercial developments in the Euro bio-economy. Recent EU announcements fail to support conventional biofuels for ground transport biofuels, and we worry what that portends for the future of bio-based aviation and maritime fuels \u2013 not to mention the broader bioeconomy.<\/p>\n
If it\u2019s tuesday, this must be Belgium
\nMany Europeans take climate change very, very seriously. Across 11 countries of Central and Western Europe, 73% of voters want \u201ca party that will make the EU a global leader in fighting climate change\u201d. In response to this public clamoring, the politicians and bureaucrats of the European Commission (seconded by many Member States politicians) produce plans at a rate that would impress even select former U.S. Democratic candidates for president. In her recent \u201cState of the (European) Union\u201d speech, European Commission President von der Leyen \u2013 with the voluble support of 170 CEOs and a cacophony of \u201cbusiness networks\u201d \u2013 proposed to increase the EU\u2019s 2030 target for emissions reduction from 40% to at least 55% of their 1990 emissions as a more credible step towards the goal of Net-Zero by 2050 . This \u201crevised ambition\u201d joins an expanding menagerie of plans, initiatives, impact assessments, agendas, and frameworks, including the<\/p>\n
European Green Deal;<\/p>\n
NextGenerationEU Recovery Plan for Europe;<\/p>\n
Renewable Energy Finance Mechanism;<\/p>\n
Emissions Trading Scheme (ETS);<\/p>\n
National Energy and Climate Plans;<\/p>\n
Just Transition Mechanism; and<\/p>\n
Renewable Energy Directive.<\/p>\n
Corporate Clarion calls
\nGiven the European public and political enthusiasm for a Green Deal to drive a Green Recovery, including the \u20ac750 Billion Recovery Plan, European producers of biofuels and bio-based products have (understandably) not been shy when pressing Brussels to support growth of the European bioeconomy. The Bio-Based Industries Consortium pointed out 1) that the bioeconomy represents 11% of the EU economy, 2) that bio-based industries \u201cimprove food security, foster circularity, stimulate rural development and maintain green jobs in EU regions\u201d, and 3) naturally, bio-based industries should be \u201ckey to the EU\u2019s green recovery\u201d. The European Bioeconomy Alliance emphasized that the \u201cbioeconomy has a pivotal role to play in the transition to a more circular, sustainable and resource-efficient society\u201d. And the newly formed BioAdvantage Europe made it perfectly clear that a \u201cthriving bioeconomy will be crucial for meeting the goals of the European Green Deal and the Paris Accord on climate\u201d and that \u201c[t]ime is short, and the bioeconomy can make an impact now\u201d. Serious people from across the European bioeconomy, from Avril to UPM recognized the importance of the Green Deal moment and took the time to make their case. Certainly, jockeying for resources from the EU Green Recovery was a priority for these leaders of the EU bioeconomy, but we suspect another driver of their engagement.<\/p>\n
An electrifying future
\nBrussels responded to industry\u2019s strong, clear arguments, with an unimpressed shrug, as the Commission did not immediately signal increased support for the entire Bioeconomy. Fuels Europe succinctly pointed out the Commission\u2019s uneven approach: \u201cFuelsEurope supports the EU\u2019s ambition for climate neutrality by 2050, however limiting the role of renewable and low-carbon liquid fuels to aviation and maritime transport overlooks the potential of these fuels and risks jeopardizing optimal conditions for investments at scale in the short-term.\u201d Instead of promoting bio-based solutions currently available, Brussels seems more interested in the next generation of bio-based fuels and products. We fear that future support for these advanced fuels will wither just as the support for conventional biofuels has.<\/p>\n
Clearly, policymakers are facing enormous economic pressures from long-standing structural unemployment and rising debt. Unfortunately, EU Policy towards the bioeconomy does not appear to emerge from a well-reasoned set of priorities and balanced trade-offs, but instead reflects a superstition that the immediate productive use of biomass is not commensurate with sustainable de-carbonization. Instead, policymakers in Brussels prefer to incentivize green power (and electric vehicles) as opposed to a balanced approach to economy-wide de-carbonization.<\/p>\n
Redoing REDII already?
\nThe United States and Europe started their current federal biofuels policies at roughly the same time. The EU Renewable Energy Directive\u00a0was put in place in 2009 and is still the EU\u2019s policy governing the production and promotion of energy from renewable sources. In 2018, after two years of vociferous debate (that were dominated by concerns over indirect land use change) the EU approved its second RED, i.e. REDII, for the decade 2021 \u2013 2030. Helpfully, REDII meekly incentivizes advanced biofuels, namely those fuels produced from wastes and biomass residues (i.e. cellulosic biomass from agriculture and forestry). Unhelpfully, REDII clumped all fuels from \u201cfood-based feedstocks\u201d (their words not ours) into one disfavored category that was capped at 7% of transportation energy use. As Fuels Europe pointed out, the EU Green Deal would entrench the preference for advanced biofuels over conventional.<\/p>\n
The history of European disdain for conventional biofuels is definitely a story for another day, but the central issue is that the 2009 RED turned Europe\u2019s diesel automobile fleet into a massive export market for Indonesian palm oil. Subsequent burning of Indonesia\u2019s tropical forest, land clearing to establish more palm oil plantations, and the resulting CO2 emissions and biodiversity loss, even if not caused directly by European biofuel demand, has brutalized all biofuels\u2019 reputation in Europe.<\/p>\n
To add insult to injury, the REDII is not out of the woods, yet. To support the rapid advance of the European Green Deal (the outlines of which were agreed upon in December) the Commission is now reviewing all existing renewable energy regulations, including REDII that has not yet come into effect. The review will 1) assess how far EU renewable energy rules can contribute to a higher EU climate ambition, and 2) explore how to accelerate the transition to a more integrated energy system as outlined in the EU\u2019s strategies for energy system integration and hydrogen. Sure, these assessments are important, but the potential revision of a hard-fought policy set to start in 3 months has Europe\u2019s bioeconomy CEO\u2019s eager for policy stability and regulatory certainty.<\/p>\n
Green shoots II
\nMeanwhile, from the Finnish forests to the Iberian Peninsula, serious companies are bringing real bio-based fuels and products to market, delivering value, and forging genuine de-carbonization pathways. \u00a0These are just a few examples of what is hitting the headlines:<\/p>\n
Air bp and Neste are going to increase the volume of sustainable aviation fuel in Europe five-fold. Neste anticipates producing 1.5 million tonnes of SAF by 2023.<\/p>\n
France, Norway, Spain, and Sweden are enabling national SAF development with roadmaps and targets.<\/p>\n
Haldor Tops\u00f8e joined a consortium project near Copenhagen that will combine green hydrogen with carbon from direct air capture and Bioenergy Carbon Capture and Storage<\/p>\n
(BECCS) to produce sustainable fuels, like ammonia, methanol, and SAF.
\nINEOS and UPM are collaborating to bring sustainable bio-based polymers to market and using RSB certification to help them tell their green story.<\/p>\n
Neste and Shell agreed to increase the supply of sustainable aviation fuel.
\nRepsol produced the Spanish market\u2019s first batch of SAF at its Puertollano Industrial Complex.<\/p>\n
O Brussels, where art thou?
\nTo the na\u00efve American observer, the European Commission is a funny thing. What is Ursula von der Leyen actually the President of? Given that each EU Member State must translate the guidance from the Commission into its own set of national laws, there is ample space for national determination and, shall we say, adjustment. But the reality remains that policy matters. The Nordic bioeconomy thrives with national support.<\/p>\n
Genuine leadership from Brussels would likely percolate into national policies that would genuinely help grow an industry that would drive the Green Recovery, incentivize rural jobs, and bring about the Energy Transition and Circular Carbon Economy that so many are claiming to want.<\/p>\n
Despite Brussels\u2019 too-numerous-to-count pronouncements dramatic change to the European economy is not likely to occur any time soon. Next year Germany is having major elections and France the year after. The yellow vests (gilets jaunes) have re-appeared in Paris highlighting that \u201ckitchen table\u201d issues may eventually trump climate concerns. The economy of Eastern Europe relies on coal, and vehicle manufacturers will struggle to meet the ever-increasing ambition to de-carbonize personal transport. The very real and very pressing economic challenges of a lingering pandemic may focus politicians\u2019 perspectives back from 2050 climate goals to the present need for economic recovery. As much as anyone, we hope for a Green Recovery, but we hope that Green Stimulus properly accelerates growth of the bioeconomy as well as the intertwined Circular Carbon Economy.<\/p>\n
We commend those companies that are forging the European bioeconomy, and we wonder, what would be possible if the European public\u2019s clear enthusiasm for sustainable products could be harnessed through genuine political leadership. The bioeconomy needs the support of consumers and voters for it to succeed. Brussels trendy preference for electrification \u2013 at the expense of economy-wide solutions \u2013 does the people of Europe and Europe\u2019s creative bioeconomy a great disservice.<\/p>\n
Does Europe\u2019s experience hold any lessons for the United States?\u00a0 We think, yes. Making progress on both climate and economic growth requires a balanced suite of solutions: biofuels and bio-based products in parallel and synergy with more electrification, for a green and sustainable future.<\/p>\n
Leatherstocking LLC creates growth opportunities for clean-technology companies and investors through bespoke advisory services.\u00a0 We assist clients with policy analysis and advocacy, international market analysis, communications, sustainable investing, and strategic planning.<\/p>\n","protected":false},"excerpt":{"rendered":"
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