- Four EU states suspend or drop biofuel blending to lower fuel prices.
- Finland relaxes blending for 2022-2023 to reduce costs of fossil and renewable fuels.
- Romania attracts big biofuel investments, EU target still not fully transposed.
- Clariant to build €140m cellulosic bioethanol plant in Podari, creating about 800 jobs.
Prices at fuels have become a major concern for all European drivers, prompting governments to seek solutions to stabilize costs. While the European Union has mandated since 2007 the addition of biofuels to conventional fuels, recently four member states decided to withdraw or reduce this obligation. The measure comes as biofuels contribute to higher final prices of petrol and diesel.
Each member state has developed its own strategy to keep fuel prices at an acceptable level, but the challenges are substantial. On one hand there is pressure from rising costs, and on the other hand there are European directives regarding the development of alternative fuel industries and the reduction of pollutant emissions.
Four countries drop the biofuel blending obligation
Finland had ambitious plans to raise the share of biofuels to 30% by 2029. However, Finnish authorities decided to ease blending obligations for the years 2022 and 2023, with the main aim of lowering prices for both fossil fuels and renewable fuels.
Latvia implemented similar measures to stabilize prices, suspending the mandatory blending of biofuels for the period July 1, 2022 - December 31, 2023. During this period, the inclusion of biofuels in gasoline and diesel becomes voluntary for distributors.
Germany proposes an even more radical approach, aiming to eliminate completely agricultural feedstocks from biofuel production by 2030. The German argument goes beyond price stability in the fuel market and also includes concerns about global food security.
Czechia decided that the use of biofuels becomes optional from July 1, 2023, while maintaining obligations to reduce greenhouse gas emissions and pollution levels.
Global perspectives on biofuels
The US Department of Agriculture anticipates a decline in biofuel consumption in the near term, driven mainly by high fuel prices. The Ukraine conflict has intensified the imbalance on the global energy market, contributing to this trend.
Nevertheless, the evolution of biofuels varies significantly from country to country. Despite a reduction in overall consumption, a growth in bioethanol production is foreseen in six European states: France, Germany, Poland, Hungary, Bulgaria and Romania.
The situation in Romania: major investments amid uncertainty
Romania finds itself in a contradictory situation. On the one hand, the country is investing heavily in biofuel plants, while on the other hand several states are renouncing their use. Additionally, the EU Directive on the promotion of energy from renewable sources for the 2021-2031 period has not yet been fully transposed into Romanian law.
Significant investments in biofuel production
The Swiss company Clariant plans to open a state-of-the-art plant to obtain cellulosic bioethanol in Podari. The investment is estimated at 140 million euros and would create about 800 jobs.
OMV Petrom announced the production of sustainable aviation fuel (SAF - Sustainable Aviation Fuel) at the Petrobrazi refinery. The process involves processing locally sourced rapeseed oil and will contribute to reducing CO2 emissions from commercial flights.
Romania’s biomass potential
According to the Ministry of Agriculture, Romania has the capacity to produce annually between 35 and 50 million tonnes of biomass from agricultural residues. This energy potential varies depending on the production of energy crops achieved each year.
In 2020, Romania produced about 300,000 tonnes of pure biodiesel (292,374 tonnes according to INS), from a total of 21.8 million tonnes produced in the European Union. The country sits toward the end of the European producers, which are led by:
- Spain: 4.2 million tonnes
- Germany: 3.7 million tonnes
- France: 2.3 million tonnes
Challenges and opportunities for the Romanian market
Renouncing by several European countries of the mandatory use of biofuels raises important questions about the future of Romanian investments in this sector. Nevertheless, the EU commitments to reduce carbon emissions and develop renewable energies remain in force, which could sustain demand for biofuels in the long term.
Romania must balance between the need to lower fuel prices for consumers and the opportunity to develop a local biofuels industry that could contribute to the country’s energy independence and to meeting environmental goals.
photo source: digi24.ro