ASPECTS OF THE METHODOLOGY FOR CALCULATING GHG EMISSIONS FROM FOSSIL FUELS

Transcription

1 ASPECTS OF THE METHODOLOGY FOR CALCULATING GHG EMISSIONS FROM FOSSIL FUELS Article 7a of Directive 2009/30 HYBRID METHOD APPROACH FOR FOSSIL FUELS European Commission DG Environment January 29th, 2010 EBB

2 The Campa Biodiesel Biofuels Corp. NEOCHIM Green Biofuels Ireland Assocostieri

3 Relevance of Directive 2009/30 Art. 7 for biofuels producers Fuel suppliers have to gradually reduce the GHG intensity of the fuels they place on the market, including by blending biofuels Average emissions from petrol and diesel reported under Art. 7a Definition of the fossil fuel comparator against which all biofuels will be benchmarked and possibly excluded from the EU market ( cut-off values) Same biofuels sustainability criteria as in RE-D Link to marginal analysis of transport fuel supply/demand

4 World Production of Unconventional Liquid Fuels Source : US Department of Energy, International Energy Outlook, May 2009

5 Rationale for applying consistent methodologies to biofuels & fossil fuels (1) Fossil fuels and biofuels markets are closely correlated, not only price-wise, but also in terms of logistics, specifications, distribution EN590 standard (mineral diesel) allows blending of up to 7% v/v biodiesel without labelling; higher incorporation volumes possible if limiting fuel specifications designed by CEN are amended Almost all biofuels are today sold in the form of blends with fossil fuels (B5, B7 ). In some cases: blends are directly imported into the Community (B99, B19 from the US) Most EU Member States have adopted blending obligations (mandates coupled with by-out prices) and/or detaxation schemes incentivising the blending of biofuels with fossil fuels If GHG balance of fossil fuel assessed at the duty point: will most certainly have a biofuels component (see FQD Art. 1-6: GHG emission assigned to the fuel includes any blending component)

6 BIODIESEL MANDATES IN EU MEMBER STATES Member State OBLIGATION LEVEL IN 2010 Member State OBLIGATION LEVEL IN 2010 Austria 6,3% Latvia - Belgium 4% Lithuania 5% Bulgaria 2% Luxembourg 2% Cyprus 2,5% Malta - Czech Republic 4,5% (in volume) Netherlands 3,5% Denmark 5.75% (under discussion) Poland 5,75% Estonia - Portugal 5,75% Finland 5.75% Romania 4% (in volume) France 7% Slovakia 5,75% Germany 4,4% Slovenia 5% Greece - Spain 3,9% Hungary 5.75% Sweden - Ireland 4% UK 2010/11: 3,5% (in volume) Italy 3,5% Source: EBB

7 Rationale for applying consistent methodologies to biofuels & fossil fuels (2) FQD Art 7a and RE-D follows same objective: reducing GHG emissions in transport sector Allows to draw meaningful comparisons as to the respective performances of different and competing types of fuel Ensures a level-playing field on the EU fuel market, where mineral fuels and biofuels trade flows are closely related (blends) Minimizes the administrative burden for operators handling both fossil fuels and biofuels, as well as for the authority in charge of verification/audit Reduce the risk of fraud when individual operators will report the GHG emissions of the fuels they release on the market

8 Hybrid option for fossil fuels GHG reporting General principles 1. Tracking and accounting of emissions along the entire production chain within and beyond the EU, including those from flaring 2. Possibility for operators to choose between default values and actual values when reporting emission levels BUT UNDER SPECIFIC CONDITIONS 3. Conservative default values, incentivising the calculation of actual ones 4. Allocation based on energy content, in compliance with FQD Art.7(a)(1)

9 Default values Specific issues (1) Default values alone are not sufficient to address the purpose of Directive 2009/30, as it does not trigger any GHG reduction Emissions associated with extraction step varies widely according to crude oil type, technology, Refinery efficiencies need to be accounted for: EU-wide refinery model would contradict principle of LCA (ISO 14040) allocation should be made at the lowest possible sub-process level. See for instance Argonne study 2004, etc Given fossil fuels expected market share by 2020, even small reduction in emissions level would result in high overall savings RE-D Annex V 19: the fossil fuel comparator should be the latest available actual average emissions from the fossil fuel part of petrol and diesel consumed in the Community, as reported under Directive 98/70

10 Default values Specific issues (2) Parameter 1: Restriction on default values use Mandatory use of actual values for the extraction step, at the minimum when unconventional sources of crude oil are being used: Ensure an accurate reporting of GHG emissions for the most polluting oil sources Mirror the RE-D requirement whereby biofuels producers have to use actual GHG values in case they source their raw material from EU regions (NUTS2) where GHG emissions from agriculture overstep the EU average Revision of default values for refining step, to account for average performances of EU refineries

11 Default values Specific issues (3) Parameter 2: Conservativeness Default values set at a conservative level: Prevent operators from claiming better values than the actual ones Encourage reporting of actual data 40% penalty on biofuels processing step in RE-D

12 Default values Specific issues (4) Parameter 3: Level of disaggregation Just as for biofuels, default values should be defined for specific pathways, at a more precise level than what is currently being proposed If mandatory use of actual values not retained Default values for extraction to be defined on basis of region/technology Default values to be defined on basis of energy source (crude, oil sand ), fuel type (petrol, diesel), production technology etc All unconventional sources should be included, not only oil sands (oil shale, deep see drilling.). Different values for oil sands are necessary

13 G. Plouchart, IFP, April 2001

14 Brandt & Farrell, 2006

15 Default values Specific issues (5) Parameter 4: Revision / Peer-review Regular review and updates Source of input data to calculate and review default values is key: JEC consortium not the most neutral source in this respect. Need for peer-review, also in the case of input data for biofuels life-cycle assessment create level-playing field

16 Security of supply carbon leakage? In principle should not interfere with establishment of GHG accounting methodology. Aim of FQD is to reduce the GHG intensity of energy supplied for use in road vehicles and non-road mobile machinery Long-term goal not within the scope of this exercise: it is for international negotiations to achieve compromise on global GHG objectives Same issue with ETS: more coal used in FSU and China Gradual implementation of FQD : unlikely to affect security of supply If carbon leakage issue assumed to be true, implies that EU fossil fuel suppliers are aware of their actual emissions to enable comparison with imported fuels EU s refineries lower efficiency is the real issue If security of supply is considered, then biofuels should receive a credit under RE-D for improving it

17 Baseline Baseline: should be set realistically and transparently Regular review after 2010: should be increasing over time, as increased fossil fuel demand will lead to higher use of unconventional oil and therefore higher GHG emissions levels Fixed baseline until 2020 would not create any incentive for best performers and would not be consistent with moving biofuels benchmark in the RE-D Supplier-specific/ fuel-specific baseline? If considered, needs to be consistent with RE-D fossil fuel reference

18 Flaring and venting Emissions/savings to be allocated proportionally between fuel and coproducts Site-specific calculations + apportionment to share of oil delivered to EU

19 Chain of custody definition (1) CoC: defining time and spatial scaling is essential Chain of custody: definition of a reporting period of 1 year would be much less demanding than consignment-based reporting BUT this has to be consistent with biofuels CoC requirements International trade in agricultural commodities is at least as complex as trade in fossil fuels; yet, biofuels producers will have to keep track of GHG emissions from every batch of biofuels, while raw material may come from different farms. Probably not aggregation of carbon data allowed!

20 Chain of custody definition (2) Administrative burden? Fossil fuels are not submitted to the same sustainability requirements as biofuels, only the GHG reporting lower administrative burden upfront No cut-off value so widest range of aggregation is in theory allowed If reporting of actual values is too complex, then specific calculation tool should be developed Group reporting (Art. 7a-4): No such possibility for biofuels producers! If allowed, should be restricted to one Member State Define requirements for verification and compliance (audit), including by drawing on existing ISO/CEN standards (ISO )

21 Origin of fuels Most recent development : H.R introduced this week by US Rep. Bruce Braley (D-Iowa) : Would require, after a study on its feasibility, a country-of-origin label on US motor fuels Rationale : economic benefit and security of supply concerns rather than environmental concerns Feasibility study of various country-of-origin information disclosure requirements The listing of more than one country- of-origin would not be required for a fuel blend containing fuel at least 70% or more of which originated in a single country

22 Thank you for your attention Amandine LACOURT c/o EBB - Boulevard Saint-Michel Brussels Tel , al@ebb-eu.org Or visit the EBB web-site :