Current transport legislation offers a long-term perspective for sustainable fuels in aviation and shipping through fixed quotas – what impact will this have on the chemical sector?
With the Green Deal, the EU is taking on a pioneering role in the transition of the transport sector to climate neutrality. The current transport legislation offers a unique long-term perspective for sustainable carbon-based and especially biomass-based fuels in aviation and shipping, which fall under Annex IX, as well as for synthetic carbon-based fuels through the quotas set. A new report by the Renewable Carbon Initiative (RCI) analyzes three future scenarios for the development of demand for carbon-based fuels up to 2050 – each with possible developments according to the current political framework. The results illustrate that the demand for second-generation biofuels from biomass will increase significantly due to rising quotas for aviation fuels and shipping. This forecast not only highlights potential risks to the ecological balance and thus the sustainability of resources that need to be carefully managed, but also poses significant obstacles for other sectors that require renewable carbon to defossilize their products. The chemical and materials sector in particular is dependent on carbon from biomass and CO2 as a raw material in the long term. However, as this sector is in direct competition with the fuel sector and does not offer comparable regulatory incentives, it will have very limited access to second generation biomass and carbon from CCU (Carbon Capture and Utilization). On the other hand, the production of bio-based and synthetic fuels can also support the development of renewable carbon in the chemical industry, as some by-products of fuel production can be used as feedstock for the chemical industry.
RCI commissioned experts from the nova-Institute to prepare this report. The report contains 11 tables and 9 graphs as well as a detailed description of the latest fuel regulations in the European Union, which are of high value to stakeholders from other sectors with biomass and carbon capture needs. Although the focus is on Europe, the report also includes global scenarios and analysis. The main findings and conclusions are summarized below. A detailed analysis can be found in the full report, which can be downloaded free of charge at the following link:
https://renewable-carbon.eu/publications/product/eu-and-global-biomass-demand-for-transport-fuels-aviation-and-shipping-up-to-2050-and-implications-for-biomass-supply-to-the-chemical-sector-pdf/
The existing transportation ordinance diverts second-generation biomass to aviation and shipping
The chemical sector will not be able to compete with the SAF (Sustainable Aviation Fuels) sector for second generation biomass (Annex IX) under the current European framework, as the mandatory quotas mean that SAF producers are willing to pay much higher prices for the same biomass. The high demand from the transportation sector is expected to siphon off almost all available second-generation biomass. As demand increases, so will prices, and the availability of second-generation biomass for use in the chemical sector will be severely limited.
A higher share of synthetic fuels, above the mandated shares, could reduce competition for bio-based feedstocks and allow some of the second-generation biomass to be used in the chemical industry, creating a more level playing field.
There is considerable synergy potential between the transport and materials sectors
The production of biofuels generates a number of valuable by-products that could be made available to the chemical industry. For example, the production of sustainable aviation fuels (SAF) using the Fischer-Tropsch process produces high-quality naphtha, which, with a share of around 15 %, is an ideal raw material for steam crackers in the chemical industry. The modelling showed that, depending on the future technology mix, around 1 to 2 million tons of bio-based naphtha can be expected as a by-product of bio-based SAF production in the calculated biomass demand for SAF. Securing these streams for the chemical industry can help to fully exploit the synergies between the sectors.
The industrial use of biomass should be based on scientific, objective arguments, including efficient land use
The objectively questionable exclusion of food and feed crops for the production of future aviation fuels offers the opportunity to use these crops for the chemical sector. By reducing the demand for food and feed crops for road transportation, the chemical sector can use more food and feed crops without additional land. Ethanol and biodiesel plants could be preserved and repurposed as feedstock suppliers for the chemical industry, preserving the extensive existing infrastructure, innovation and jobs that have been created through significant investment over the past decades. Model calculations show that it is possible to increase the supply of starch, sugar and vegetable oil to the chemical industry in 2050 according to a moderate high-tech scenario without jeopardizing food security, sustainability and the production of biofuel/SAF. A change of image in the use of food and feed crops in the industry and long-term political acceptance would not only follow the scientific arguments, but would also support the chemical sector on its path to defossilization and sustainability.
The electrification of the transport system in combination with the transformation of carbon-dependent industries enables a sustainable system of biomass use
Combining the decarbonization of energy and transport with the defossilization of carbon-dependent sectors offers a holistic approach to sustainability. This integrated strategy creates a net-zero vision that includes the widespread adoption of electric vehicles and the transformation of carbon-dependent sectors such as aviation and chemicals. Such an approach would minimize carbon demand in the transport sector while establishing sustainable carbon cycles in industries that inherently require carbon. Furthermore, it opens up opportunities for innovation and stimulates a re-evaluation of the use of food crops in chemical and material production.
The future fuel mix for transportation will be significantly influenced by the ambitious regulatory framework in the EU, which will lead to a significant and increasing demand for bio-based and CCU-based carbon feedstocks. To ensure a sustainable supply of second-generation biomass that meets the high demand for biofuels, especially in aviation, while taking into account the needs of the chemical industry, further strategic policy measures are needed to ensure a level playing field, promote a circular economy and adapt policies to the principle of cascading use. A holistic approach to these challenges is essential to enable a sustainable and resilient transportation and chemical industry for the coming decades. By addressing these interconnected challenges simultaneously, a more coherent and sustainable industrial ecosystem can be created that balances the needs of different sectors while paving the way to a defossilized future.
“Our research shows that there is an urgent need for balanced policies that support both the transportation and chemical sectors in their transition to renewable carbon sources,” said Michael Carus, executive director of the Renewable Carbon Initiative. “Without coordinated and strategic approaches, we risk creating unintended barriers to the chemical industry’s defossilization efforts.”
The findings of this report underscore the urgent need for policymakers, industry leaders and stakeholders to work together on carbon management to develop a holistic approach to renewable carbon and its allocation. The RCI calls on EU legislators to take these findings into account in upcoming policy reviews and invites industry stakeholders to work together to find innovative solutions.
To find out more about how to create a sustainable future for the transport and chemicals sector, download the full report here.
https://renewable-carbon.eu/publications/product/eu-and-global-biomass-demand-for-transport-fuels-aviation-and-shipping-up-to-2050-and-implications-for-biomass-supply-to-the-chemical-sector-pdf/
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