Q: After a long and very successful 34 years, the European Fuel Oxygenates Association has decided to change its name into Sustainable Fuels. The organization has also decided to put its key motto into the complete association name, making it “Sustainable Fuels: Driving Cleaner Mobility with Fuel Ethers”.
Could you please share with our readers what the main driver behind the decision was? Please also elaborate on whether there is any change between what EFOA did in the past and what Sustainable Fuels intends to accomplish going forward.
A: As the political environment and communication trends have been changing in the past few years, we thought it would be important to have a name that follows this tendency, and which better explains our vision and mission. We also undertook a survey among people we work with to see how they perceive us. We found out that our name is considered as being too technical and quite difficult to understand. I believe that our new name more effectively communicates what we stand for and who we are. Most importantly, it reflects the direction the industry is heading in. It also shows the contribution the industry is making to improving air quality and reducing greenhouse gas emissions from fuels.
Q: Fuel standards in recent years have gone through a whole range of changes, and the future is likely to see changes continue at an unchanged pace. What are the key objectives and main challenges for Sustainable Fuels during the next decade? What would be – in your opinion - the ideal fuel standard (in terms of octane ratings, restriction on harmful chemicals, etc.)?
A: Indeed, we have seen a big change in fuel standards worldwide. For example, around 20 years ago, lead was a dominant octane enhancer in petrol. Today, lead is used only in a handful of countries worldwide. We also see a big change in sulphur levels in petrol, though this change is a bit slower in some parts of the world. Petrol quality is important, as it has a direct impact on the level of air pollution. The higher the fuel quality in a particular country, the better the air quality, and the fewer the CO2 emissions. Fuel quality standards are the guardian of the environment and health. They have also been put in place to protect the car itself, and to ensure its mechanics work well. For instance, the so-called ‘harmful chemicals’ (chemicals harmful to health, environment or to the car), are not supposed to be used in petrol, yet sometimes end up in the fuel, due to loopholes in legislation. This is not the case everywhere, but we see this happening especially in Asia. In Vietnam, for instance, acetone has been used as octane enhancer in petrol, resulting in thousands of cars breaking down.
In my view, Europe is a great example of how fuel quality can positively impact the environment. Europe has set a higher Research Octane Number (RON) than the rest of the world, limited the use of health endangering metallic additives, and set the vapour pressure of fuels at 60 kPa. All this has resulted in improved air quality, reduced CO2 emissions and a ‘healthy’ car fleet. Europe also allows the use of MTBE, ETBE, TAME and TAEE (fuel ethers) in petrol. This has a great impact on air quality.
While Europe has done a lot, we see still a lot of potential for improvement in fuel quality. For instance, increasing the octane number to RON 102 from today’s RON 95 is a great opportunity to further cut CO2 emissions and air pollution from transport. We have calculated that nearly 20 million tonnes of CO2 can be saved in a year just by changing petrol to RON 102. It is a significant contribution to the overall target and could help car manufacturers and refiners meet their CO2 reduction targets.
Q: European fuel standards (Euro 6) are often referred to as the reference fuel for other parts of the world. We have seen China and large parts of Asia adapting the standards while others keep trailing behind. Where on a global basis do you see the highest need to push for fuel quality and emission standards and where do you foresee the toughest challenges for your association as well as your sister organizations, and on what grounds?
A: There are discrepancies with regard to fuel standards globally. While some countries are leading on fuel quality, others are still far behind. We would encourage all countries to look seriously into the fuel quality issue, as it is an opportunity to build a better environment for citizens. Interestingly enough, while Europe has been leading on issues related to fuel standards and fuel quality, there is still much to do there too. As mentioned above, we see an opportunity to ensure that the Research Octane Number increases to RON 102 in Europe. Globally, we also see the need to change the octane levels. In the US, a move to higher octane of RON 95 could be of great added value. In African states moving to RON 93-95 could bring a desired reduction of air pollutants, etc. Of course, some African states have already RON 93-95 in place. We also see an opportunity in ensuring that harmful chemicals are not being added to petrol just because of loopholes.
The discussions in Europe on post-Euro 6 are an opportunity to revise the test fuel legislation and to ensure that the new high-octane fuel ultimately reaches the consumer. We also think that this legislation could further encourage a more efficient, high-compression engine which would greatly benefit the new fuel.
As to the biggest threats, I think many of us are wondering about the future of liquid fuels and internal combustion engine (ICE). Several European countries have announced a planned ban of new ICE sales. The first one will be in Norway in 2025. That is of course if the prevailing political wind does not change. We have seen in recent years in Europe pressure not only from the green groups to ban the ICE, but also pressure from such groups as “yellow vests” to keep the prices of fuel relatively affordable. It is hence a difficult political environment, in which the policymakers need to navigate. I think that we must work out a pathway which is beneficial for everyone: environment, health, economy and the person driving a car. In our view, low-carbon liquid fuel can play an important role in the future contributing to the protection of the environment while ensuring a stable economic growth. We see quick technological progress with regard to liquid fuels, and we should give it a chance.
Q: Many of our readers have heard a lot about the EU RED II directive which was ratified in 2018. Could you please share with us what this means in terms of requirements for transportation fuels as well as in terms of fuel oxygenates, for the years to come till 2030 and eventually beyond?
A: In 2018, the Renewable Energy Directive (RED) II was agreed upon. The EU adopted a 32% renewable target by 2030, with the possibility to revise the target upwards in 2023. The Directive also sets a target of 14% of renewables in transport by 2030. Within the 14% target, the Directive requires the level of advanced biofuels to reach 0.2% in 2022, 1% in 2025 and 3.5% in 2030. Advanced biofuels were given a 2x multiplier and 4x multiplier for road vehicles. The Directive also caps the level of first-generation biofuels, which is set at the 2020 consumption levels of individual Member States and not higher than 7%. Member States can set lower caps than 7% and if they do so, they can reduce their headline transport accordingly.
The Renewable Energy Directive clearly shows that biofuels will play an important role in the years to come. However, there are still a several uncertainties with regard to the direction in which biofuels will develop in the future. The push for advanced biofuels is a welcome one, but it will take time and a substantial amount of investments to transform the production from first generation to second generation.
The European fuel ether industry has been looking into advanced bio-ethers as well. Some of the fuel ethers producers already produce advanced bio-methanol from renewable feedstock such as landfill gas, biomass, captured CO2 or municipal waste.
Q: Following up from the previous question, can you please explain how the EU directive system in this specific case will work? What are the measureable objectives member states have to achieve and when?
A: To reach the Union’s target, Member States will have to set their own contributions. They were required to send in their National Energy and Climate Plans in 2018 where they indicated their contribution to 2030 targets. The plans are now being revised by the Commission, which during the second half of 2019 will go back to individual Member States with technical feedback. Already in June 2019, Maroš Šefčovič, the Commission’s Vice-President for the Energy Union warned that the plans are not perfect. The Commission on the other hand announced that renewable energy could fall short by 1.6 percentage points against a 32% target for 2030. At the same time, energy efficiency measures risk leaving a gap of 6.2 percentage points versus a 32.5% benchmark. It will hence be in the hands of the Commission to negotiate with Member States to ensure that all the contributions amount to 32% of renewables.
Q: In Europe, the focus in the transportation fuels development area appears to have shifted to electrification and other alternative sources of energy. A political push is emerging from many angles while consumers are left with a high acquisition cost and inconveniences against existing but insufficient incentives, making the progress of electric vehicles (EVs), for example, till today a mediocre success. How do you see this trend developing in the future, between now and 2030 and also beyond.
A: Indeed, there has been a vibe about electric cars and alternative fuels among policymakers not only in Brussels and EU capitals but also in many other parts of the world. EVs are an interesting concept, which provide benefits in terms of improvement of air quality and reduction of tailpipe CO2 emissions. As any technology they have their pros and cons.
As current electricity generation is reliant on traditional fuels and as making EVs (or any other car) has impact on the GHG footprint, this mean that EVs are not entirely CO2- free. We therefore need to understand what the impact of EVs on CO2 emissions is today and how it will evolve in the future. EVs also face other problems in terms of availability of refuelling stations, battery range, recycling of batteries or the availability of rare earth elements (lithium, cobalt, nickel) to produce batteries. I believe that all these technological problems can be fixed, with time. This means however that we need to give it appropriate time.
Finally, while we see an increase in the share of alternative fuels, EVs and other alternative fuels, such as LPG, natural gas, hydrogen, alcohols, constitute a small share of the passenger cars.
All this means that we need to think how new fuels and new technologies should be introduced to consumers. We believe that for instance, a gradual approach which includes hybridisation of the fleet could be a first step towards full electrification in the future. As to the future itself, there is a place for all kinds of technologies and all kinds of fuels in the future: decarbonised liquid fuel, e-fuel, LPG, CNG, electric cars, diesel, hybrid cars, etc. With the speed of growth and the need to improve the standards of living of people on our planet, we need all those options to ensure a prosperous and cleaner future.
Q: We would like to thank you very much for sharing your views and opinion on the above topics with us.
Are there any other aspects we have not raised in our questions which you would like to address, in order to convey the strategy and work Sustainable Fuels is involved in? Any other specific topics, challenges and opportunities you see for Europe or elsewhere in the world? Please be so kind as to share your thinking with us.
A: Just one final message: the fuel ether industry is at an interesting point in time. The next 10 years will have a big impact on the decarbonisation agenda and could dramatically change our energy system and car fleet. We must not forget that low-carbon liquid fuels can be an important contributor to CO2 and air pollution reduction globally. Moving forward, I would like to see an even stronger cooperation of the fuel ether industry with car manufacturers, refiners and policymakers, so that we set together a policy framework which benefits the environment, health and all the citizens of the globe.