Europe needs stable legal framework for biofuels to prosper: Neste
Berlin (Platts)--22Jan2013/810 am EST/1310 GMT
Europe needs a stable legal framework if biofuels research and
development is to prosper, Neste Oil's Executive Vice President, Oil
Products, Matti Lehmus, said at a conference Monday.
A proposal in October by the European Commission to cap the usage of
certain types of biofuel feedstocks in the European Union's renewables
mandate was not ideal, but if it is applied it must not then be superseded by
more changes further down the line, said Lehmus at the Fuels of the Future
conference in Berlin.
The EU has set a 2020 target of 10% of the transportation sector's
energy use to come from renewable sources.
The type of biofuel feedstock used to meet this target is not specified.
However, the use of food-crop feedstocks has been called into question
following studies into the real carbon savings obtained using those biofuels
after emissions related to the switching of land usage towards feedstock
production, known as the Indirect Land Usage Cost (ILUC), is taken into
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The EC proposal seeks to address the ILUC by calling for the EU's target
to be amended so that only a maximum of half of the overall 10% -- 5% of
total fuel in transportation -- would come from first-generation biofuels, or
the ones made from grinding and fermenting food crops. The rest would have to
come from second-generation biofuels and/or renewable power used in electric
"[It's] not the perfect way of responding to ILUC, but it's one of the
ways which might be effective," said Lehmus. "If that is the model to be
selected it is important that we don't have additional models implemented in
Neste Oil currently operate plants producing its proprietary NExBTL
renewable diesel in Finland, Rotterdam and Singapore with a total nameplate
capacity of just under 1 million mt in Europe and 800,000 mt in Singapore.
The NExBTL plants currently use around 54% crude palm oil, 41% waste products
and 6% of other feedstocks, including rapeseed, said Lehmus. Lehmus
emphasized the flexibility of the plants with regards feedstocks though and
the company's intention to use more advanced feedstocks in the future.
Approximately 80% of Neste's research and development budget for
biofuels goes toward developing new feedstocks for the company's renewable
products, with microbial and algae-based oil the priority for
second-generation biofuels, said Lehmus. Neste opened Europe's first pilot
plant for producing microbial oil from waste and residues at its Porvoo site
in Finland in October, following an investment of Eur8 million ($10.65
The EC's proposal also took steps to incentivize investment into the
development of the second-generation fuels needed to meet its revised target,
including allowing second-generation fuels to count four times as much
toward renewables mandates as first generation biofuels.
However, there is little EU-wide legislation related to
second-generation biofuels, with member states able to set their own
requirements. This lack of consistency among member states will discourage
investment, Lehmus said.
The definition of a second-generation biofuel should also not be too
broad, he added.
After Lehmus' talk, Helmut Lamp, Chairman of the Executive Board,
German BioEnergy Association (BBE), reiterated that the time required to
develop second-generation fuels to a commercial scale meant that they could
not be relied upon to meet the EU's entire carbon reduction target and that
first-generation biofuels would still be necessary.
"We see that climate protection goals cannot be achieved by these
projects [alone], because it's too late."
--Sean Bartlett, firstname.lastname@example.org
--Edited by Katharine Fraser, email@example.com