Biodiesel can play an important role in reducing CO2 emissions from road transport. Per euro paid by the consumer, biodiesel makes the highest contribution to emission reduction. This makes it the most cost-effective climate measure that the government can choose. To make the energy transition a success, the transport sector must take steps. The government can actively accelerate this with the right incentive measures.
Heavy road transport
The transport sector is responsible for nearly a quarter of Europe’s greenhouse gas emissions. Road transport constitutes the highest proportion of overall transport emissions – emitting 76% of all EU’s transport GHG emissions (including domestic transport and international bunkers) in 2021.These emissions must be reduced by 95% by 2050 to achieve the climate goals. The transport sector must therefore become drastically more sustainable. Biodiesel can contribute to this. The fuel is suitable for heavy road transport, where electricity often provides insufficient power and hydrogen is still too expensive and limited in availability in the short term.
Annual obligation
Currently, the transport sector is still almost 90 percent dependent on fossil fuels, resulting in significant greenhouse gas emissions. An example of a measure with which the government can reduce this in the short term is increasing the annual renewable energy obligation. MVO therefore welcomes the government’s intention to increase the annual obligation already in 2024. The annual renewable energy obligation for transport can be met with synthetic fuels, electricity and hydrogen, but in the short term mainly with sustainable biofuels.
Stimulate
The government has various options to encourage the use of sustainable biofuels. For example, voluntary greenhouse gas emission reduction systems can be an incentive to reduce emissions through the use of renewable fuels, and can also be an incentive to use higher blends of biofuels. But compelling measures are needed to allow the transport sector to use higher blends of biofuels on a large scale.
Higher blends
Currently, diesel at the pump may contain a maximum of 7 percent biodiesel. But many modern diesel engines are suitable for a driving a higher percentage of biodiesel. The introduction of B10 at all Dutch pumps, following the example of E10 (10% bioethanol in fossil petrol) for vehicles with petrol engines, is a simple step to reduce CO2 emissions. Allowing a higher blending percentage of ten percent would further reduce emissions by 50 million mt CO2 eq/year.
Excise duty differentiation
However, most heavy-duty transport engines for trucks and inland shipping, for example, are suitable for handling even a higher blend of biofuel. CO2 emission reductions can be achieved in a cost-effective manner, especially with the application of these higher blends. At a blending percentage of 30 percent, the CO2 emission reduction increases by more than 200 percent. Experiences in other countries show that a higher share of biofuel in road traffic and heavy road transport is technically possible. Another option to encourage the use of a higher percentage of biofuels in heavy road transport is the application of excise duty differentiation, whereby any cost increase due to the use of biofuels can be compensated. Another variant is that in which fossil transport fuels are taxed more heavily than renewable fuels. Such a tax measure will be made possible in the foreseeable future under the European Energy Taxation Directive, and has the advantage that it does not cost the treasury any money.
Sustainable economy
A sustainable economy in which fossil fuels have largely been replaced by sustainable energy sources is not easy to achieve. The transition to a situation in which our energy supply will be structurally different in nature and form requires cooperation between companies and the government. The government uses policy and legislation to determine the timing and success of the energy transition.
Frank Bergmans, policy officer for sustainable development MVO
