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#StateAid: Commission approves €4.7 billion public support scheme for advanced #Biomethane and #Biofuels in Italy

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The European Commission has approved under EU state aid rules an Italian support scheme for the production and distribution of advanced biofuels, including advanced biomethane. The measure will contribute to reaching EU energy and climate change goals while limiting distortions of competition.

Commissioner Margrethe Vestager, in charge of competition policy, said: "This is yet another step towards greater use of renewable energy in Europe and helping Italy's transition to more environmentally friendly fuel sources. The scheme will encourage the production and consumption of advanced biofuels in Italy, while limiting distortions of competition."

The Italian scheme supports the production and distribution of advanced biofuels and advanced biomethane, also known as second and third-generation biofuels, for use in the transport sector. The scheme has an indicative budget of €4.7 billion and will run from 2018 until 2022.

Advanced biofuels and biomethane are the most sustainable and environmentally friendly biofuels. They are produced from feedstock that do not require agricultural land for their production, such as waste, agricultural residues, and algae. Therefore, they pose a significantly lower risk of indirect CO2 emissions caused by the use of additional land to grow crops for biofuels rather than for food and feed, and are particularly suited to help the EU achieve its climate and energy objectives.

Advanced biofuels and biomethane have much higher production costs than fossil fuels. Under the scheme, producers of advanced biomethane and biofuels receive a premium which allows them to compensate for these higher costs and compete with fossil fuels in the transport sector. The premium can be increased if producers also make investments to improve the distribution and liquefaction of advanced biomethane.

The level of the premium will be updated each year in relation to the production costs to ensure that producers are not overcompensated.

The scheme will also incentivise farmers to produce biofuel and biomethane from manure and other residues originating from their farming activities and use them in turn to power their agricultural machines and vehicles.

The scheme will be financed by transport fuel retailers who are obliged by law to include a certain percentage of advanced biofuels and biomethane in their fuel blends.

On this basis, the Commission concluded that the measure will help Italy reach its 2020 target for the use of renewable energy in transport, fight climate change and replace fossil fuels in the transport sector, while at the same time limiting distortions of competition, in line with the Commission's 2014 Guidelines on State aid for environmental protection and energy.

Background

Biofuels, including biomethane, are fuels produced by biomass. While biomethane is a gaseous fuel, other biofuels such as bioethanol and biodiesel are liquid.

As part of the EU 2020 strategy, the Renewable Energy Directive requires all Member States to ensure that at least 10% of all energy consumed in transport come from renewable sources by 2020. Sustainable biofuels are, together with electric vehicles, one of the main low-carbon alternatives to fossil fuels used in transport, as they are easily deployable on existing transport infrastructure.

The Commission's 2014 Guidelines on State aid for environmental protection and energy allow member states to support advanced biofuels under certain conditions.

The non-confidential version of this decision will be made available under the case number SA.48424 in the State Aid Register on the Commission's competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Biodiversity

Europe's time: How not to waste it?

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It is a historic moment for Europe. That is how the European Commission entitled the list of proposed measures to restore the economy of the European Union estimated at a record amount of 750 billion euros, with 500 billion being allocated free of charge as grants and another 250 billion – as loans. The EU member states should approve the plan of the European Commission in order to «contribute to a better future for a new generation».

According to the head of the European Commission Ursula von der Leyen, «Efficient approval of the plan will be a clear sign of European unity, our solidarity and common priorities». A significant part of the recovery measures is aimed at implementing the «Green Deal», a phased transition to climate neutrality of the EU countries. About 20 billion euros will be allocated to co-finance the existing InvestEU program aimed at supporting the development of sustainable energy technologies, including carbon capture and storage projects.

One of the most promising projects in this field is currently being implemented in the Netherlands in the Rhine–Meuse delta, which is of crucial importance for European and international shipping. The Smart Delta Resources Consortium has launched a campaign to assess all aspects of the carbon capture and storage systems construction for their subsequent reuse. It is planned that the consortium will be capturing 1 million tons of carbon dioxide per year starting from 2023 with a subsequent increase to 6.5 million tons in 2030, which will reduce the total share of emissions in the region by 30%.

One of the consortium members is the Zeeland refinery (a joint venture of TOTAL and LUKOIL that works with Europe's largest integrated refinery Total Antwerp Refinery). This Dutch plant is one of the industry leaders in climate neutrality. Digital optimization system for the processing of middle distillates (which includes marine fuel that complies with the strict requirements of IMO 2020 that have recently entered into force), as well as the recently upgraded and one of the largest hydrocracking facilities in Europe are installed at the plant.

According to Leonid Fedun, Vice President for Strategic Development of LUKOIL, the company is European and, consequently, feels an obligation to comply with current trends, including climate trends that define the market today.

At the same time, according to Fedun, climate neutrality in Europe will be achieved only by 2065, and in order to achieve it the global harmonization of regulatory approaches of all parties to the Paris Agreement is important.

The measures proposed by the European Commission to support the economies of member states may become a significant step along this path, as its first stage will be the development and internal coordination of each member state reorganization plans in the energy sector and in the economy field.

Using existing breakthrough projects in the field of climate neutrality as the best industry practices for the entire region may help shorten the time needed to implement support measures as well as become an instrument for a dialogue within supranational organizations and international agreements such as the Paris Climate Agreement.

 

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Biofuels

Commission imposes countervailing duties on #IndonesianBiodiesel

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The European Commission has imposed countervailing duties of 8% to 18% on imports of subsidized biodiesel from Indonesia. The measure aims to restore a level-playing field for EU biodiesel producers. The Commission's in-depth investigation found that Indonesian biodiesel producers benefit from grants, tax benefits and access to raw materials below market prices.

This inflicts a threat of economic damage to EU producers. The new import duties are imposed on a provisional basis and the investigation will continue with a possibility to impose definitive measures by mid-December 2019. While the predominant raw material for biodiesel production in Indonesia is palm oil, the focus of the investigation is on the possible subsidization of biodiesel production, irrespective of the raw material used. The EU biodiesel market is worth an estimated €9 billion a year, with imports from Indonesia of reaching some €400 million.

For more information, see the regulation published in the EU Official Journal and a page dedicated to the case.

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Biofuels

#Canada should take a leaf out of Europe’s books when it comes to #SustainableEnergy future

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The recently announced EU Bioeconomy Strategy continues that continent’s legacy of advancing biological solutions to environmental questions and strategically highlights the economic benefits of the approach with a strong focus on jobs, growth and investment in the EU. In fact, the EU’s bioeconomy already accounts for 4.2% of its GDP; it contributes over €2 trillion in annual turnover and €621 billion in added value, and keeps over 18 million people employed, writes International Institute for Sustainable Development Bioeconomy Lead Richard Grosshans.

The plan is not only concrete—including a €100m Circular Bioeconomy Thematic Investment Platform to bring bio-based innovations closer to the market, and  a pledge to build 300 new sustainable biorefineries across Europe by 2030—it also complements an EU directive to ensure that 20% of the EU’s total energy needs are met with renewables by 2020.

In short, the Europeans are significantly ahead of the game.

If Canada were to up its game in the bioeconomy sector, the impact would be significant. In fact, replacing just 5% of Canada’s gas supply with renewable gases would reduce GHG emissions by 10 to 14 megatonnes annually.

We are already moving in the right direction.

The proposed Clean Fuel Standard seeks to increaser use of lower-carbon fuel—including renewable natural gas—and applies to the transportation, building and industry sectors. And the newly-formed Circular Economy Leadership Coalition, a collaboration of major business leaders, academics and non-governmental organizations, are committed to accelerating Canada’s transition to a circular economy.

However, to fully advance a bioeconomy in the country we need a National Bioeconomy Strategy, inspired by the recently updated EU Bioeconomy Strategy, and even the White House’s 2012 National Bioeconomy Blueprint. In fact, this was already recommended by the Canadian Chamber of Commerce in 2015.

The strategy needs to exemplify existing Canadian successes in bioeconomy, but also pave a path for Canada to further pilot technologies and innovations at home and globally—innovations that convert Canada’s abundant bio-waste materials and industrial by-products into fuel, bio-based fertilizers, and high value chemicals while also recycling scarce metals, plastics, and valuable nutrients.

The government of Canada should provide the necessary support, incentives, and guidance, through funding and programs to attract businesses, and develop biorefineries and innovation clusters across the country.

Put simply, a bioeconomy relies on the use of biological products, biomass, and waste materials to be used and converted into food, feed, fuel and more. If you imagine a circular economy, whereby the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimized”, a bioeconomy represents the renewable component.

While the recent report from the Intergovernmental Panel on Climate Change certainly sent shockwaves across the world as it warned of the devastating consequences of our current environmental trajectory, it also spotlighted the urgent need to find alternatives to the status quo.

In a world that urgently needs to find alternatives to dirty fossil fuels that emit high rates of greenhouse gases (GHGs) that contribute to climate change, and that needs to move away from the current linear economic model of “extract, use and discard resources”, the bioeconomy proves a highly viable solution.

Canada’s large land base, low population density, and abundance of natural resources have traditionally proven limiting factors in the transition to a bioeconomy future.

With today’s environmental imperatives, however, Canada, which emits high levels of GHGs and has access to an overabundance of waste, residues, and biomass, is perfectly positioned to become a world leader in advancing a bioeconomy.

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