In the fight against climate change, Europe wants to replace more and more fossil fuels with renewable energy. In order to achieve this in the Netherlands, the recently revised European Renewable Energy Directive (RED III) must be converted into legislation at national level. The Dutch government is currently working on an amendment to the Environmental Management Act. Four transport sectors (land, sea, air and inland water) will have separate sector obligations for the use of renewable energy to reduce CO2 emissions.
Setting separate obligations per transport sector is a good idea. But that is not enough. The major issues in the field of climate and energy can only be solved if the government and the business community listen carefully to each other and work together. For producers of sustainable biofuels, government policy can only be successful if it meets a number of preconditions.
The sector obligations make the individual sectors responsible for sustainability and give substance to the ‘polluter pays’ principle. That’s a good starting point. It is important that the proposed system of trading certificates (the so-called emission reduction units (EREs)) will ensure investment security and stability. When EREs lead to deliveries from other transport sectors, this affects the predictability of the system and therefore investment security. EREs should therefore be deployed in the sector in which they were created, so that there is certainty about the use of renewable energy per sector.
The (physical) use of biofuels in road transport, aviation and shipping can be an important growth market. A condition for an attractive investment climate is that there is predictable government policy that takes market stability into account. Investment security for biofuel producers, the cost-effectiveness of different land and fuel combinations, and the feasibility of the proposed system are important points of attention.
The biofuels market is an international market. In an international market, competitive criteria for sustainable biofuels and sustainable raw materials determine whether the available biofuels are actually used in the Netherlands.
To ensure that climate objectives can be achieved in a cost-effective manner, government policy is needed that focuses on security of energy supply and increasing the potential of sustainable bio-raw materials.
With an extensive package of measures, the RED III gives the starting signal to realize sustainability ambitions in Europe. In order to ultimately be able to make the right choices in the Netherlands, it is wise to provide insight into the impact of the various proposals. This includes the contribution of certain measures to the most important climate objectives, but also what the measures mean for investment security for biofuel producers. Furthermore, insight into the cost-effectiveness of different soil and fuel combinations and the feasibility of the proposed system is required. Developing a limited number of scenarios can help with this.
Frank Bergmans, policy officer for sustainable development MVO
