AMF Annex 58 /IEA Bioenergy Task 41 Project 10
A Report from the Advanced Motor
Fuels TCP and IEA Bioenergy TCP

The Role of Renewable
Transport Fuels in
Decarbonizing Road Transport
Key Strategies in Selected Countries
Franziska Müller-Langer
Jörg Schröder
Kathleen Meisel
DBFZ Deutsches
Biomasseforschungszentrum
gemeinnützige GmbH
Kyriakos Maniatis
Eric Fee
European Commission, DG ENER
Angela Oliveira da Costa
José Mauro Ferreira Coelho
Juliana Rangel do Nascimento
Paula Isabel da Costa Barbosa
Rachel Martins Henriques
Energy Research Office of Brazil (EPE)
November 2020

Anton Fagerström
IVL Swedish Environmental
Research InstituteMarkus Millinger
Helmholtz-Zentrum fürUmweltforschung GmbH – UFZ

Masayuki Kobayashi
Yutaka Takada
Organisation for the Promotion of
Low Emission Vehicles (LEVO)

Alicia Lindauer
Kevin Stork
Zia Haq
US Department of Energy

Helen Lindblom
Swedish Transport Administration

Nils-Olof Nylund
VTT Technical ResearchCentre of Finland Ltd

Shaojun Zhang
Ye Wu
Tsinghua University

Edited by Dina Bacovsky
BEST — Bioenergy andSustainable Technologies GmbH

Summary / Abstract
This report constitutes Part 1 of the report on “The Role of Renewable Transport Fuels in
Decarbonizing Road Transport”. In this report the term decarbonization includes all
options to reduce GHG emissions and make road transport cleaner, including low(-fossil)carbon energy carriers such as biofuels, e-fuels, and renewable electricity. This part of thereport deals with the key strategies that the selected countries have developed todecarbonize road transport.
In the light of climate change, there is an urgent need to decarbonize our societies. The
transport sector, and within it in particular the road transport sector, is specificallychallenging, as transport demand is growing, and so are the sector´s GHG emissions.
Decarbonization includes all options to reduce GHG emissions and make road transportcleaner, including low(-fossil)-carbon energy carriers such as biofuels, e-fuels, andrenewable electricity. None of these will be able to solve this grand challenge alone, andrenewable transport fuels have an essential role in bridging the gap between GHG emission
reduction targets and the prospected emission reductions.
Most countries are aware that ambitious action is needed to abate the climate crisis. GHG
emissions from all sectors have to be reduced dramatically, and the transport sector isamong the hardest one to decarbonize. Measures can be taken according to the avoid-shiftimprove principle, i.e. avoid excessive transport, shift to less carbon-intensive transportmodes, and improve the carbon intensity of all transport modes. The use of renewableenergy carriers such as biofuels, e-fuels and green electricity for electric vehicles constitutes
one of the main measures to improve the carbon intensity of transport.
Consequently, many countries have set up legislation that mandates or encourages the useof renewable transport fuels. The European Union has introduced the Renewable Energy
Directive RED and its recast RED-II, mandating all EU member states to cover 10 % of theirtransport energy demand from renewable sources by 2020, and 14% by 2030. In the USA
the Renewable Fuel Standard (RFS) established volume requirements for renewable fuelbased on life-cycle GHG emission reduction thresholds across several fuel categories.
Annual volume targets in the initial legislation culminate at 36 billion gallons (136 billion
liters) of total renewable fuels per year in 2022. In Brazil, the RenovaBio system shallgradually reduce the average GHG intensity in the Brazilian transport system by around 10%
in 2030, relative to 2017.
Finland, Germany and Sweden (all EU member states) have set even more ambitious
targets for biofuels than mandated by the EU RED. Finland has a target of increasing theshare of biofuels (by energy content) in road transport fuels to 30% by 2030. Germany has atarget of reducing GHG emissions from the transport sector stepwise to 95 million tons byi2030 which is about 42% compared to 1990. One measure for achieving this is a GHGbased quota system which obligates fuel suppliers to sell a fuel mix which achieves a 6%
GHG mitigation a year compared to fossil gasoline and diesel mix from 2020 onwards.
Finally, Sweden has a target to reduce emissions from the road transport sector by at least
70% by 2030, compared with 2010. One measure to achieve this is a GHG reduction
obligation, which entails an obligation for fuel suppliers to reduce GHG emissions from soldvolumes of gasoline and diesel fuels by incorporating biofuels. In 2020 the reduction
obligation is 4.2 % for gasoline and 21 % for diesel. The reduction obligation will be
increased over time with an indicative target of 40% overall reduction in 2030, indicatively
composed of 28 % for gasoline and 66 % for diesel.
In the USA, besides the federal RFS, California was the first state to introduce a mandate ontransport fuel GHG emission reductions based on GHG intensities of fuels. The Low-Carbon
Fuel Standard (LCFS) sets annually decreasing carbon intensity benchmarks for gasoline,
diesel, and their replacement fuels. The LCFS has a goal of reducing the carbon intensity of
its transportation fuel pool by 20% by 2030 (relative to a 2011 baseline). The State ofOregon has a program similar to the LCFS requiring reduction of carbon intensity of its
transport fuels. Some Mid-West states are exploring similar clean fuel programs to reducetransport fuel GHG emissions.
Other countries are more focusing on electric vehicles in order to decarbonize the transport
sector. China has committed to lower its overall carbon intensity and to peak its national
carbon emissions by 2030 or earlier. In the transport sector, China is primarily focusing on
the introduction of electric vehicles (so-called new energy vehicles), but also promoting theuse of E10. Japan has committed to reduce GHG emissions from the transport sector from
225 million tCO2eq in FY 2013 to 163 by 2030, constituting a reduction of 27%. Measures
include the promotion of next-generation automobiles, and transport-system level measures.
All mentioned countries have also implemented legislation to gradually increase the fuelefficiency of vehicles, directly resulting in GHG emission reductions.

iiAuthors and acknowledgements
This report constitutes Part 1 of the report on “The Role of Renewable Transport Fuels in
Decarbonizing Road Transport”, a project that was initiated and carried out jointly by IEA
Bioenergy and the Advanced Motor Fuels (AMF) TCP, with financial support of the European
Commission. The project was Task 41 Project 10 under IEA Bioenergy and Annex 58 under
AMF.
Participants in this project were the Contracting Parties of IEA Bioenergy from Brazil, theEuropean Commission, Finland, and USA, the Contracting Parties of AMF from China,
Finland, Germany, Japan, Sweden, and USA, and AMF Annex 28 and AMF Annex 59. All
parties provided in-kind contributions, except for the European Commission that also
provided 80,000 USD to finance the work of experts. The overall project budget (in-kind plus
cash contributions) amounts to 200,000 USD.
Further to this part “Key Strategies in Selected Countries”, the following report parts havebeen published:•

Production Technologies and Costs•

Scenarios and Contributions in Selected Countries•

Deployment Barriers and Policy Recommendations•

Summary Report

This report part was written by Franziska Müller-Langer, Jörg Schröder, Kathleen Meisel (all
DBFZ Deutsches Biomasseforschungszentrum gemeinnützige GmbH), Kyriakos Maniatis,
Eric Fee (European Commission, DG ENER), Angela Oliveira da Costa, José Mauro
Ferreira Coelho, Juliana Rangel do Nascimento, Paula Isabel da Costa Barbosa, Rachel
Martins Henriques (all Energy Research Office of Brazil (EPE)), Anton Fagerström (IVL
Swedish Environmental Research Institute), Masayuki Kobayashi, Yutaka Takada (bothOrganisation for the Promotion of Low Emission Vehicles (LEVO)), Helen Lindblom(Swedish Transport Administration), Shaojun Zhang, Ye Wu (both Tsinghua University),
Markus Millinger (Helmholtz-Zentrum für Umweltforschung GmbH – UFZ), Alicia Lindauer,
Kevin Stork, Zia Haq (all US Department of Energy), Nils-Olof Nylund (VTT TechnicalResearch Centre of Finland Ltd) and edited by Dina Bacovsky (BEST – Bioenergy andSustainable Technologies GmbH).
The IEA Bioenergy TCP is an international platform of cooperation working in the frameworkof the IEA´s Technology Collaboration Programmes. IEA Bioenergy’s vision is to achieve asubstantial bioenergy contribution to future global energy demands by accelerating theiii

production and use of environmentally sound, socially accepted and cost-competitive
bioenergy on a sustainable basis, thus providing increased security of supply whilst reducing
greenhouse gas emissions from energy use.
www.ieabioenergy.com
The Advanced Motor Fuels (AMF) TCP also is an international platform of cooperation
working in the framework of the IEA´s Technology Collaboration Programmes. AMF´s vision
is that advanced motor fuels, applicable to all modes of transport, significantly contribute to asustainable society around the globe. AMF brings stakeholders from different continents
together for pooling and leveraging of knowledge and research capabilities in the field ofadvanced and sustainable transport fuels.
www.iea-amf.org

iv

Content
Introduction ........................................................................................................................... 1
Renewable energy related legislation in the European Union................................................ 2
The Renewable Energy Directive of 2009 (RED) ............................................................... 2
The recast of the Renewable Energy Directive – RED-II ................................................... 3
ANNEX IX of RED-II .......................................................................................................... 6
The EU transport sector .................................................................................................... 7
Finland .................................................................................................................................. 9
Energy supply and demand ............................................................................................... 9
Introduction .................................................................................................................... 9Road transport energy ................................................................................................. 11
Vehicle fleet ................................................................................................................. 12
Targets for emission reductions in road transport ............................................................ 13
Measures to promote reduced CO2 emissions from road transport .................................. 15
Projections ...................................................................................................................... 18
Sweden ............................................................................................................................... 20
Energy supply and demand ............................................................................................. 20
Introduction .................................................................................................................. 20
Transport sector ........................................................................................................... 21
Targets for emission reductions in road transport ............................................................ 24
Measures to promote reduced CO2 emissions from road transport .................................. 24
Projections ...................................................................................................................... 26
Germany ............................................................................................................................. 29
Energy supply and demand ............................................................................................. 29
Introduction .................................................................................................................. 29
Transport sector ........................................................................................................... 30
Vehicle fleet ................................................................................................................. 32
Targets and measures..................................................................................................... 33
Projections ...................................................................................................................... 35v

Summary of scenarios until 2030/2050 ........................................................................ 35
Scenarios for biofuels and other renewable fuels until 2030 ......................................... 39
USA .................................................................................................................................... 43
Energy supply and demand ............................................................................................. 43
Targets and measures..................................................................................................... 46
Corporate Average Fuel Economy (CAFE) and GHG Emission Standards .................. 46
Renewable Fuel Standard (RFS) ................................................................................. 47
California’s Low-Carbon Fuel Standard (LCFS) ........................................................... 48
The Bioeconomy Initiative ............................................................................................ 49
Projections ...................................................................................................................... 50
Brazil ................................................................................................................................... 52
Energy supply and demand ............................................................................................. 52
Introduction .................................................................................................................. 53
Current situation........................................................................................................... 53
Ethanol ........................................................................................................................ 55
Biodiesel ...................................................................................................................... 55
Targets and measures..................................................................................................... 56
The Paris Agreement ................................................................................................... 56
RenovaBio ................................................................................................................... 57
Others Policies ............................................................................................................. 58
Barriers and Policy Gaps ............................................................................................. 59
Projections ...................................................................................................................... 60
Final Remarks ................................................................................................................. 64
China .................................................................................................................................. 65
Energy supply and demand ............................................................................................. 65
Targets and measures..................................................................................................... 66
China’s climate commitments....................................................................................... 66
National energy security and energy supply ................................................................. 67vi

Action plans on air pollution prevention and control ..................................................... 67
Fuel consumption regulations ...................................................................................... 68
Emissions and fuel quality regulations for vehicles....................................................... 69
New energy vehicles and automotive biofuels .............................................................. 70
Projections ...................................................................................................................... 72
Japan .................................................................................................................................. 76
Energy supply and demand ............................................................................................. 77
Targets for emission reductions in road transport ............................................................ 79
Measures to promote reduced CO2 emissions from road transport .................................. 80
Projections ...................................................................................................................... 81
Planned further policy measures .................................................................................. 82
Abbreviations ...................................................................................................................... 84
Appendix ............................................................................................................................. 87vii

List of Figures
Figure 1: Final energy mix in the transport sector of the EU28 in 2000 compared to 2018
(Source: JRC 2020) .............................................................................................................. 8
Figure 2: The Finnish energy mix (primary energy supply) in 2018 ..................................... 10
Figure 3: The Finnish final energy consumption by sector in 201810.................................... 10
Figure 4: Volumes of liquid biofuels in Finland1 ................................................................... 12
Figure 5: Road transport CO2 inventory from 2005 (reference year) to 2030 (target year) andthe trajectories needed to reach emission reductions of -39 or -50% by 20304.................... 15
Figure 6: Trends in CO2 emissions of new passenger cars and vans and used imported
passenger cars8. ................................................................................................................ 17
Figure 7: Supply of energy in Sweden 1970-2018, TWh, Sources: Swedish Energy Agency
and Statistics Sweden ......................................................................................................... 21
Figure 8: Energy use for transport 1970-2018, TWh, Sources: Swedish Energy Agency andStatistics Sweden................................................................................................................ 21
Figure 9: Raw materials for HVO used in Sweden 2018. Source: Swedish Energy Agency 22
Figure 10: Country of feedstock origin for HVO consumed in Sweden in 2017 .................... 22
Figure 11: Biofuel use in Sweden 1995-2018. Source: Swedish Energy Agency................. 23
Figure 12: The gap between BAU scenario and the goals for the Swedish transport sector.
Source: Swedish Transport Administration.......................................................................... 27
Figure 13: Development of the energy demand of different sectors (DBFZ based on AGEB
2018) .................................................................................................................................. 30
Figure 14: Development of biofuel production and use (adopted from DBFZ 2019) ............ 31
Figure 15: Policy frame in the EU and their transposition in Germany (adapted fromDBFZ 2019) ........................................................................................................................ 34
Figure 16: Vehicle fleet scenario Germany in 2050 (DBFZ based on Wietschel et al) ......... 38
Figure 17: Final energy demand of German transport sector in 2050 (DBFZ based on
Wietschel et al )41 ................................................................................................................ 38
Figure 18: Base case scenario – fuel quantities within the GHG quota until 2030 ............... 41
Figure 19: Climate scenario – fuel quantities within the GHG quota until 2030 .................... 42
Figure 20: 2018 U.S. primary energy consumption by sector .............................................. 44viii

Figure 21: States (in green) that have adopted state-level GHG targets in line with the Paris
Agreement .......................................................................................................................... 46
Figure 22: Volume targets for renewable fuel under RFS .................................................... 47
Figure 23: Renewable fuel growth resulting from California's LCFS (2011-2019) ................ 49
Figure 24: Projections of annual LDV sales and of transport sector fuels consumption in the
USA .................................................................................................................................... 51
Figure 25: The Brazilian primary energy supply and Final consumption energy for transports
in 2017 ................................................................................................................................ 54
Figure 26: Transport energy demand projections over time in two scenarios ...................... 61
Figure 27: Historic and projected ethanol supply for three scenarios .................................. 61
Figure 28: Projected biodiesel production to 2029 ............................................................... 62
Figure 29: Market penetration of hybrid and EV light duty vehicles on the Brazilian market 63
Figure 30: The prediction of future vehicle stock in China (low scenario) ............................ 73
Figure 31: The prediction of future vehicle stock in China (high scenario) ........................... 74
Figure 32: The future emission trends for on-road vehicles in China under three designed
policy cases (note: emissions of gasoline-powered motorcycles included) .......................... 74
Figure 33: Trends in composition of primary energy supply................................................. 77
Figure 34: Trends in energy consumption in the transport sector. ....................................... 78
Figure 35: Examples of MLIT efforts in the plan for global warming countermeasures ........ 82ix

List of Tables
Table 1: GHG saving thresholds in RED-II ............................................................................ 5
Table 2: The Finnish vehicle fleet6...................................................................................... 13
Table 3: Current Swedish biofuel production, ktoe .............................................................. 23
Table 4: German vehicle stock – comparison of amounts in 2010 and 2017 ....................... 32
Table 5: Brief summary of exemplary scenarios (RS – Reference scenario; FS – Futurescenario, a RS and national solo efforts; b global climate protection) ................................... 36
Table 6: U.S. biofuels production in 2018 ............................................................................ 45
Table 7: GHG emission reduction thresholds for renewable fuels in RFS............................ 48
Table 8: Biofuel installed production capacity (ML/year). ..................................................... 78
Table 9: Summary of the transport fuel consumption (ML) .................................................. 79
Table 10: Estimated emissions of energy-originated CO2 in each sector (Japan´s Intended
Nationally Determined Contribution (INDC)) ........................................................................ 80
Table 11: Major examples of government policy measures ................................................. 81
Table 12: Dissemination targets for the next-generation passenger vehicles in 2030 sales
and results in 2017.............................................................................................................. 82xIntroduction
This report constitutes Part 1 of the report on “The Role of Renewable Transport Fuels in
Decarbonizing Road Transport”. It contains descriptions of the key strategies of sevencountries to reach their individual targets for decarbonizing and cleaning the road transport
sector. Each chapter was written by experts with respect to transport technologies andtransport policies who are involved in either the IEA Bioenergy TCP or the Advanced Motor
Fuels TCP. The main work on this part of the report was done in 2019, so part of the values
cited have 2017 or 2018 as reference year.
The countries that have contributed to this report are Brazil, China, Finland, Germany,
Japan, Sweden and USA; also, a section on the European Union has been added. This
selection of countries has introduced remarkable strategies and policies to reduce GHG
emissions from the road transport sector and/or to make road transport cleaner, and bestpractice examples for successful policies can be observed in these countries. Yet they also
face challenges, and so it is worth studying whether their current policies will be sufficient toreach their ambitious goals (as is done in Part 3 of the overall report). The fact that thisselection of countries is a very diverse group with large differences in land area, population,
population density, transport work, GDP etc. allows to observe how different framework
conditions affect what strategy will be most effective.
Every country chapter first describes the current energy supply and demand in general andspecifically in the transport sector, future scenarios for energy supply to the transport sector,
the targets set for the transport sector, and main strategies and policies to reach thesetargets. As bioenergy and biofuels policies of Finland, Germany and Sweden follow therespective EU legislation, the main parts of EU legislation are described upfront.
It should be noted that the term “advanced biofuel” is defined differently in different
jurisdictions and is thus not consistent with respect to the biofuel pathways covered by theterm. More details on the definitions are provided in Part 2 of the overall report (“Production
Technologies and Costs”).

1Renewable energy related legislation in the European Union
The Renewable Energy Directive of 2009 (RED)1
The main regulatory framework in the EU currently in force regarding biofuels is the RED(Renewable Energy Directive)2, which establishes an overall policy for the promotion of
production and consumption of energy from renewable sources in the EU. The RED contains
a general consumption target for renewable energy as well as the requirement for EU
Member States to obtain a share of energy from renewable sources in all forms of transportof at least 10% by 2020. It is generally accepted that biofuels will be the main renewableenergy source in attempting to reach this target, although renewably produced electricity andhydrogen are also eligible to count towards the target as well. By means of an amendment(the so called ILUC Directive) implemented in 20153, a limit of 7% has been imposed forbiofuels produced from food and feed crops grown on agricultural land for contributing to the
10% target. This 7% limit was introduced to address concerns related to the possible risks ofindirect land use change (ILUC) of such feedstocks. In order to promote the use of certain
feedstocks, including wastes and residues (listed in part A of Annex IX of the RED), the RED
also includes an indicative target of 0.5% for advanced biofuels. Finally, advanced biofuels,
as well as (other) biofuels produced from used cooking oil and animal fats may be double
counted towards the 10% target. Double counting is up to the individual EU Member States
to implement in their national legislation or not.
In order to be counted towards the target biofuels must meet certain sustainability criteria,
irrespective of whether they were produced using raw materials cultivated inside or outside
the EU. This is to ensure that the biofuels consumed in the EU are sustainable. The
sustainability criteria consist of various requirements. First, the GHG emission savings fromthe use of biofuels as compared to the use of fossil fuels must amount to at least 60% forbiofuels produced in installations starting operation after 5 October 2015. With respect toinstallations that were in operation on or prior to this date, the GHG emission savings had to

1 Extracts from ART Fuels Forum, Advance Biofuels in India: A comparative analysis between India and the EU
for cooperation and investment, Final Report, Radhika Singh, Stamatis Kalligeros & Jai Uppal, October 2018
2 Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of
the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC
and 2003/30/EC, as amended.
3 Directive (EU) 2015/1513 of the European Parliament and of the Council of 9 September 2015 amending
Directive 98/70/EC relating to the quality of petrol and diesel fuels and amending Directive 2009/28/EC on the
promotion of the use of energy from renewable sources, OJ

2amount to at least 35% until 31 December 2017, and as of that date they must amount to atleast 50%. Furthermore, in order to meet the sustainability criteria biofuels may not be madefrom raw material deriving from land with high biodiversity value, high carbon stock, or
peatland, as defined in the RED. The RED provides for several possibilities for producers to
calculate the GHG emission saving levels of a particular type of biofuel, namely by:•relying on default values for GHG emission savings that assign a standard GHG
emission saving value for each type of biofuel depending on the raw material used;•

calculating the actual GHG emission savings themselves, using a method provided
for in the Directive;•

or calculating actual values for one or more steps in the production process, while
relying on disaggregated default values for the remaining steps.

In case an economic operator can realise a better GHG performance than the default values(which are set conservatively), it is attractive to make own calculations of actual GHG
emission reduction values. Details regarding the calculation of GHG emission reduction
values are provided in the RED.

In order to further increase the flexibility of the measure, the Commission recognised via
Comitology procedures independent voluntary certification schemes. There are several
recognised voluntary certification schemes that market operators can use4. Finally, financial
support for the consumption of biofuels may only be given to biofuels meeting thesustainability criteria. EU Member States must report to the European Commission every
two years the progress they have achieved with respect to their implementation of the RED,
including with respect to biofuels. The European Commission must monitor several elements
under the RED in general, but also specifically related to biofuels, and publish consolidated
reports for the EU based on its monitoring as well as the Member State reports.

The recast of the Renewable Energy Directive – RED-II5
The RED-II was adopted on of 11 December 2018 and the Member States will have totranspose the RED-II by 30 June 2021 and the original RED will be repealed as from 1 July
2021.

4

See https://ec.europa.eu/energy/en/topics/renewable-energy/biofuels/voluntary-schemes.

5

Directive (EU) 2018/2001 (recast) on the promotion of the use of energy from renewable sources; 11

December 2018

3

The RED-II like the RED defines advanced biofuels as biofuels that are produced fromfeedstocks as listed under part A of Annex IX. The RED-II puts forth a Union binding overalltarget to ensure that the share of energy from renewable sources in 2030 is at least 32%.
Furthermore, a requirement is imposed on EU Member States to require fuel suppliers toensure that the share of renewable energy supplied for final consumption in the transport
sector is at least 14% by 2030. This share is calculated as the sum of all biofuels, biomass
fuels (subject to fulfilling the sustainability and greenhouse gas emissions saving criteria set
out in the directive) and gaseous and liquid transport fuels of non-biological origin used in
the transport sector. Also Recycle Carbon Fuels, renewably produced electricity andhydrogen can be included, an option open to the member states but not compulsory.
Recycle carbon fuels are fuels recovering energy by using fossil wastes to produce fuels.
There will be Delegated Regulations defining the methodology to estimate and a thresholdfor GHG reductions required to qualify as a recycle carbon fuel.
For the purpose of the calculation of the 14% target, the use of energy from biofuels andbiogas produced from feedstocks listed in Part B of Annex IX i.e. used cooking oil andanimal fat, is limited to 1.7%. This contribution can be double-counted towards the 14%
target, as an option open to the member states but not compulsory. The Commission can
add feedstocks to Part B of Annex IX, but not remove them. The feedstocks it can add toPart B of Annex IX are those that can be processed with mature technologies. Similarly, forthe purpose of the calculation of the 14% target, the contribution of fuels supplied in theaviation and maritime sector will be considered to be 1.2 times their energy content. The
share of biofuels, bioliquids and biomass fuels produced from food or feed crops in each
Member State may not be more than 1% higher than their share in 2020. However, theirshare is capped at 7% of the gross final consumption in road and rail transport. Moreover, incase this share is below 1%, the contribution may be increased to a maximum of 2%. If a
Member State’s share of biofuels, bioliquids, biomass fuels produced from food or feedcrops is less than the aforementioned 7%, the Member State may reduce the overall 14%
target accordingly by maximal 7 percentage points. For example, in case a Member State
has limited the contribution from biofuels, bioliquids, biomass fuels produced from food or
feed crops to 2%, it may reduce the overall 14% target to 9%.
The RED-II defines advanced biofuels as biofuels that are produced from feedstocks listed inPart A of Annex IX of the directive. It provides that the share of biofuels and biogas produced
from these feedstocks shall equal to at least 0.2% in 2022, 1% in 2025 and 3.5% in 2030,
gradually increasing over time. Furthermore, the contribution of advanced biofuels may be
double-counted towards the 14% target, as an option open to the member states but notcompulsory. The Commission can add feedstocks to Part A of Annex IX, but not remove
4them. The feedstocks it can add to Part A of Annex IX are those that can only be processedwith advanced technologies.
The RED-II lays down certain sustainability and greenhouse gas emissions saving criteria forbiofuels, bioliquids and biomass fuels in order for them to be counted for the contribution
towards the Union target and Member States renewable energy share in compliance withrenewable energy obligations; and eligible for financial support. These criteria apply
irrespective of the geographical origin of the biomass. The RED-II for the purposes of thesustainability criteria differentiates between biofuels, bioliquids and biomass fuels produced
from agricultural biomass and those produced from forest biomass. Therefore thesustainability criteria for the two differ.
Default GHG emission values and calculation rules are provided in Annex V (for liquidbiofuels) and Annex VI (for solid and gaseous biomass for power and heat production) of theRED-II. The Commission can revise and update the default values of GHG emissions whentechnological developments make it necessary. Economic operators have the option toeither use default GHG intensity values provided in RED-II or to calculate actual values fortheir pathway. Table 1 below outlines the Greenhouse gas savings thresholds in RED-II.
Table 1: GHG saving thresholds in RED-II6

Plant operation startdateTransport biofuels Transport renewable fuels of Electricity, heating andnon-biological origin
cooling

Before October 2015

50%

-

-

After October 2015

60%

-

-

After January 2021

65%7

70%

70%

After January 2026

65%

70%

80%

Biofuels, bioliquids and biomass fuels from agricultural biomass must not be produced fromraw materials originating from:•High biodiversity land (as of January 2008), including: primary forests; areas
designated for nature protection or for the protection of rare and endangered
ecosystems or species; and highly biodiverse grasslands;

6

See https://ec.europa.eu/jrc/en/jec/renewable-energy-recast-2030-red-ii

7

However, the baseline fossil comparator was raised from 84 to 92 g/MJ, i.e. in absolute emission, the change

from 2015 to 2021 is only 2 %.

5•High carbon stock land that changed use after 2008 from wetlands, continuously
forested land or other forested areas with trees higher than five meters and canopy
cover between 10% and 30%;•

Land that was peatland in January 2008.

ANNEX IX of RED-II
ANNEX IX Part A. Feedstocks and fuels, the contribution of which towards the target
referred to in the first subparagraph of Article 3(4) shall be considered to be twice theirenergy content:•(a) Algae if cultivated on land in ponds or photobioreactors.

•(b) Biomass fraction of mixed municipal waste, but not separated household waste
subject to recycling targets under point (a) of Article 11(2) of Directive 2008/98/EC.

•(c) Bio-waste as defined in Article 3(4) of Directive 2008/98/EC from privatehouseholds subject to separate collection as defined in Article 3(11) of that Directive.

•(d) Biomass fraction of industrial waste not fit for use in the food or feed chain,including material from retail and wholesale and the agro-food and fish andaquaculture industry, and excluding feedstocks listed in part B of this Annex.

•(e) Straw.

•(f) Animal manure and sewage sludge.

•(g) Palm oil mill effluent and empty palm fruit bunches.

•(h) Tall oil pitch.

•(i) Crude glycerine.

•(j) Bagasse.

•(k) Grape marcs and wine lees.

•(l) Nut shells.

•(m) Husks.

•(n) Cobs cleaned of kernels of corn.

•(o) Biomass fraction of wastes and residues from forestry and forest-basedindustries, i.e. bark, branches, pre- commercial thinnings, leaves, needles, tree tops,
saw dust, cutter shavings, black liquor, brown liquor, fibre sludge, lignin and tall oil.

•(p) Other non-food cellulosic material as defined in point (s) of the second paragraphof Article 2.

•(q) Other ligno-cellulosic material as defined in point (r) of the second paragraph of
Article 2 except saw logs and veneer logs.

•(r) Renewable liquid and gaseous transport fuels of non-biological origin.

•(s) Carbon capture and utilization for transport purposes, if the energy source isrenewable in accordance with point (a) of the second paragraph of Article 2.
6•(t) Bacteria, if the energy source is renewable in accordance with point (a) of thesecond paragraph of Article 2.

Part B. Feedstocks, the contribution of which towards the target referred to in the firstsubparagraph of Article 3(4) shall be considered to be twice their energy content:•(a) Used cooking oil.

•(b) Animal fats classified as categories 1 and 2 in accordance with Regulation (EC)No 1069/2009 of the European Parliament and of the Council

There is a cap on the Annex IX Part B biofuels of 1.7 % in 2030, or lower if a member state
decides so.

The EU transport sector
Final energy consumption in the EU28 transport sector has increased from 344 Mtoe in 2000
to 382 Mtoe by 2018. While fossil fuels dominate the energy mix, the Renewable Energy
Directive (RED) has driven a significant increase in biofuels mainly between 2005 and 2010,
and particularly for bio-diesel and bio-diesel blends (see Figure 1 on the next page)8.
Under the 2018 revised RED, liquid biofuels are projected to increase to 10% of thetransport sector energy mix, compared to approximately 5% in 2018. Over half are expected
to be advanced biofuels. Scenarios in which energy policy is further revised to match a 55%
emission reduction target in 2030 project biofuels to make up 13-14% of the transport energy
mix by 2030. In the same scenarios, electric vehicles are expected to reach 9-11% of thetransport energy mix by 2030 while very small amounts of synthetic and recycled carbon
fuels enter the market9.

8

JRC, Energy Consumption and Energy Efficiency Trends in the EU-28, 2000-2018, 2020. doi:10.2760/847849,

JRC120681
9European Commission, 2020: Staff Working Document SWD/2020/176: Impact Assessment on Stepping up

Europe’s 2030 climate ambition Investing in a climate-neutral future for the benefit of our people.

7

Figure 1: Final energy mix in the transport sector of the EU28 in 2000 compared to 2018 (Source: JRC 2020)8

FinlandKey facts for Finland (2018)
Total fuel consumption of the road transport sector:
3,900 ktoe, of which 368 ktoe are renewable
Number of vehicles in use:
3.2 million, of which 32,000 are alternative fuel vehicles (incl. electric vehicles)
Current GHG emissions from the road transport sector:
11.7 tCO2eq in 2018
In the current policies scenario the energy consumption of the road transport sector in
Finland is projected to decrease some 4 % from 2018 to 2030.
The target is to reduce GHG emissions from the transport sector by 50% compared to2005 by 2030.
Measures to achieve this target include energy efficiency throughout the whole transportsystem, electrification and 30% share (actual) of biofuels in 2030 (2030 biofuel obligation
already written into law). In addition to the biofuel obligation, additional measures toreach the target have to be taken.
Scenarios show that it seems possible to achieve this target.

Energy supply and demand
Introduction
Finland is a relatively large country, with an area of 338,000 km2 (391,000 km2 including
water areas), roughly the same as the size of Germany. The population, however, is small,
only some 5.5 million, compared to the 83 million of Germany.
Finland has no indigenous resources of oil, gas or coal, all of which are imported. Woodfuels, by-products from the large pulp and paper industry, are an important contributor to the
Finnish energy mix (Figure 2, the year 2018 is the latest year for which complete data isavailable in February 2020).

9

Figure 2: The Finnish energy mix (primary energy supply) in 201810

Figure 3: The Finnish final energy consumption by sector in 201810

Primary energy consumption in 2018 was 1,381 PJ (33.0 Mtoe). The share of renewableenergy was 36%. Final energy consumption was 1,128 PJ (26.9 Mtoe). Figure 3 shows final
energy consumption by sector10. Transport in total is 181 PJ (4.3 Mtoe), or 16% of final
energy consumption. Energy consumption in road transport was 165 PJ (3.9 ktoe), 91% of10

http://www.stat.fi/til/ehk/index_en.html

10transport and 15% of total energy use.
In 2018, the total CO2 emissions were 56.5 Mt11. The total CO2 emissions from transport
were 11.7 Mt, and the emissions from road transport 11 Mt12. The relative shares of CO2
emissions were 21% (transport total) and 19% (road transport), road transport representing
93% of transport emissions. Three Finnish companies, namely Neste (focus renewablediesel), UPM (focus renewable diesel) and St1 (focus ethanol) are active in liquid biofuels13.
In addition, the Finnish gas company Gasum is the leading company for both biogas and
LNG in the Nordic countries14.
The current (2018) domestic production capacity of liquid biofuels by the three actors is in
the order of 535 ktoe/a, and the capacity abroad (Neste Rotterdam, Singapore) is 2.3
Mtoe/a13. For the production of biofuels in Finland, Neste mainly uses imported feedstocks,
whereas UPM and St1 use indigenous feedstocks.
Road transport energy
Diesel fuel dominates the energy supply for road transport, with a share of close to twothirds, or 2.6 Mtoe. Gasoline fuels (E5, E10 and E85) were in total 1.3 Mtoe. The contribution
from methane (biogas and natural) is low, only some 8 ktoe or 0.2%. The share of electricity
in road transport is still even lower than for gaseous fuels, the estimate for 2018 is some 4
ktoe6.
Since 2008, Finland has an obligation for liquid biofuels. The obligation for 2018 was, taking
into account double counting, 15%, the target for 2020 being 20%15. In 2018 the actual shareof liquid biofuels was 9.3% (and the overall share of biofuels including biogas was 9.4%).
The renewable content was 6 % in gasoline and 11 % in diesel. As the greater part of the
biofuels supplied to the Finnish market were eligible for double counting, the obligation was
fulfilled, with the calculatory value somewhere between 15 and 20%.
The share of renewables in gasoline was 6% and 11% in diesel. Some two thirds of thegasoline in Finland is E10. The contribution from E85 is low, in the same order of magnitude
as for methane. The bio-component in diesel is mainly drop-in type paraffinic diesel (HVO).

11

https://www.stat.fi/til/khki/2018/khki_2018_2019-05-23_kat_001_fi.html

12https://www.liikennefakta.fi/ymparisto/paastot_ja_energiankulutus

13

http://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/161074/63-2018-

Biopolttoaineiden_kustannustehokkaat_toteutuspolut_vuoteen_2030_.pdf?sequence=1&isAllowed=y14

https://www.gasum.com/en/for-businesses/

15

Saarinen, J. (2013). The Finnish Biofuel Policy. CEN/TC 19 Conference. Helsinki, 27 May 2013.

11

Close to 60% of the methane used in transport was renewable bio-methane.
The biofuels obligation allows banking and year-to-year flexibility. Consequently, there has
been quite significant variations in biofuel volumes supplied to the Finnish market, muchdepending on the demand on other markets. Especially the demand for renewable diesel ishigh. Figure 4 shows the development of biofuel volumes from 2010 to 2018.
The amount of biocomponents in gasoline (ethanol, ETBE and some hydrocarbons from
HVO production) has been fairly constant, 70 - 90 ktoe/a, whereas there have beensignificant fluctuations in renewable diesel (HVO) use. In 2014 and 2015, more than 400
ktoe of renewable diesel was used, but much less was used in 2016. The variations are sohuge that they have an impact on the total transport CO2 inventories reported to theCommission.

Figure 4: Volumes of liquid biofuels in Finland1

Vehicle fleet
Table 2 shows the Finnish vehicle fleet (without 2- and 3-wheelers) in 2019. The passenger
car fleet is some 2.7 million units. The average age of the passenger car fleet is quite high,some 12 years16.

16

http://www.aut.fi/en/statistics

12

Table 2: The Finnish vehicle fleet6.
2019
Passenger cars
Gasoline
FFV
DieselNatural gas (CNG)
PHEV
BEV

2,735,276
1,916,961
8,773
781,658
7,556
16,634
3,695

Vans

325,036

Buses and coaches

12,628

Trucks without trailer

69,369Trucks with trailer

27,026

In 2018, 120,505 new passenger cars were registered17. In addition, some 40,000 usedpassenger cars were imported to Finland. In new registrations, gasoline dominates with
70%, and diesel has a share of 24%. Alternative fuel vehicles represent all in all 6% of new
registrations, roughly 1% each for both methane vehicles and BEVs, and some 4% for plugin hybrids. FFVs have vanished from the market. At the end of 2019, there was a total ofsome 4,000 BEVs, 17,000 PHEVs, 8,000 methane fueled cars and 9,000 FFVs (part ofthese converted vehicles) in Finland.

Targets for emission reductions in road transport
The base trajectory for road transport towards 2030 is the so-called ALIISA 2016 “businessas usual” baseline6, sanctioned by the Ministry of Transport and Communications
The ALIISA 2016 baseline makes the following assumption for road transport in 2030:•

passenger car stock: 2,957,532 unitso17electric passenger car stock (PHEVs + BEVs): 120,000 units•

total transport work (all road vehicles): 55,591 million km•

total energy use: 3,420 ktoeofossil liquid fuels 2,904 ktoe (84.9%)oliquid biofuels 462 ktoe (13.5%)onatural gas 8 ktoe (0.2%)obiogas 8 ktoe (0.2%)

http://trafi2.stat.fi/PXWeb/pxweb/fi/TraFi/TraFi__Ensirekisteroinnit/030_ensirek_tau_103.px/

13

o
•

electricity 37 ktoe/427 GWh (1.1%)

total TTW CO2 emissions 8.99 Mt (-24% compared to the reference year 2005)

The 2016 Finnish national energy and climate strategy for 2030, presented in November
2016, calls for a 50% reduction of CO2 emissions from transport by 2030, the reference year
being 2005. Three key measures to reduce emissions are listed:•

Improving the energy efficiency of the transport system•

Improving the energy-efficiency of vehicles•

Replacing oil-based fossil fuels with renewable and/or low emission alternatives

Within the three key measures, several detailed measures or sub-targets are mentioned. For
renewable and low-emission energy carriers the following measures and targets are listed:•

Increasing the physical share of biofuels (energy content) in road transport fuels to30%•

Expanding the refueling infrastructure for alternative energies in transport (recharging
of electric vehicles, gaseous fuels including hydrogen)•Encouraging the uptake of alternative vehicles, the minimum targets set for 2030
being:
o

250,000 electric vehicles (battery electric vehicles, plug-in hybrids, fuel cellvehicles)o

50,000 gas fueled vehicles

The 2019 Government Program of Prime Minister Antti Rinne/Sanna Marin, in addition
to energy efficiency throughout the transport system, highlights sustainable biofuels forheavy-duty vehicles and aviation, synthetic carbon-neutral fuels, recharging infrastructure for
EVs and biogas in transport. Biogas is seen as an important element in the circular
economy. A program for recirculation of nutrients will be developed, and this will include
increasing production of biogas and creating a market for recirculated nutrients.
Biogas is currently not taxed in Finland. Including biogas in the biofuels obligation meansthat biogas would have to be put under tax.
Figure 5 shows the ALIISA baseline CO2 inventory from 2005 (reference year) to 2030
(target year) and the trajectories needed to reach -39 (the overall emission reduction target
for Finland in the non-emission trading sector/European effort sharing) or -50% by 2030. The
oscillations in the CO2 emissions around 2015 are a result from variations for biofuelsdelivered to the Finnish market. The reference value for 2005 is 11.7 Mt CO 2. The baseline
lands at 8.9 Mt CO2 or -24% compared to 2005. The emission reductions for 2030 have to
be based on a combination of:14•energy efficiency•

use of biofuels/carbon neutral fuels•

electrification of vehicles

The 2016 national energy and climate strategy assumes that intensified energy efficiency
measures (other than electrification of vehicles) throughout the transport system could bringabout emission reductions of 1.6 Mt of CO2 in 2030. Subtracting this from the ALIISA 2016baseline would result in 7.3 Mt CO2, a reduction of 38%. Thus additional volumes of biofuels
and increased numbers of EVs will be needed to reach the targeted 50% reduction.

Figure 5: Road transport CO2 inventory from 2005 (reference year) to 2030 (target year) and the trajectories
needed to reach emission reductions of -39 or -50% by 20304.

Measures to promote reduced CO2 emissions from road transport
In Finland, the use of biofuels is seen as an important way to reduce greenhouse gas
emissions from road transport. In several studies looking towards 2030, biofuels are
predicted to render the biggest CO2 reductions in transport, having more impact than
improvements in energy efficiency and electrification of transport. Notwithstanding, it isrealized that the emission reductions in transport cannot rely on biofuels only.
The list of measures to reduce CO2 emissions from road transport includes, among otherthings:15

•obligation for liquid biofuels7,18•

fair taxation system for liquid transport fuels15•

CO2 based vehicle taxation (passenger cars)19•

acquisition support for BEVs20•

scrapping premium for old cars21•

support for conversions of vehicles (passenger cars)22•

support for refueling infrastructure23

The support measures thus cover renewable fuels, energy efficiency (through CO2),
electrification and fleet renewal. The biofuels obligation and the CO2 based vehicle taxation
are probably the two measures, which have delivered the most significant CO2 reductions intransport in Finland.
For several years, Finland has had a consistent policy for biofuels in transport. Biofuels
related R&D activities have received funding, and there has been funding (investment
support) available for demonstration projects as well. The first biofuels obligation was set in2008. The obligation was revised in 2010, accompanied by a tax reform treating biofuels in afair way. The target for 2020 is 20% biofuels in road transport, taking into account double
counting for advanced biofuels.
In the spring 2019, the biofuels obligation was revised again, and the pathway towards 2030
was set. The biofuel target for 2030 is 30%, and this time actual energy contribution without
double counting. There is also a separate sub target for advanced biofuels, 10%, i.e., one
third of the total contribution13. In addition, a 10% biocomponent obligation was set for lightfuel oil24.
The CO2 based vehicle taxes (purchase tax as of 2008 and annual tax as of 2010) has
brought down the CO2 emissions significantly, from 179 g/km in 2007 to 118 g/km in 201818

https://www.finlex.fi/fi/laki/alkup/2019/20190419

19

Parkkonen, L. (2013). Taxation of petroleum products and vehicles in Finland. CEN/TC 19 Conference.

Helsinki, 27 May 2013.
20

https://www.traficom.fi/fi/asioi-kanssamme/sahkoauton-hankintatuki

21

https://www.traficom.fi/sites/default/files/media/publication/Romutuspalkkiokampanja_2018_Traficomin_t

utkimuksia_11_2019.pdf
22https://www.traficom.fi/fi/asioi-kanssamme/muuntotuki

23

https://energiavirasto.fi/liikenteen-infratuki

24

https://www.finlex.fi/fi/laki/alkup/2019/20190418

16

(Figure 6). In 2019, the minimum purchase tax is 2.7% (BEVs) and maximum 48.9% (WLTP
CO2 >360 g/km)25. The progressive CO2 tax is a strong indirect support to BEVs and PHEVs.
In the case of high-performance vehicles, PHEVs are significantly cheaper to buy than theirgasoline or diesel counterparts. This is a kind of casting defect in the system, supporting
high performance cars, which in fact may never be operated on electricity.

Figure 6: Trends in CO2 emissions of new passenger cars and vans and used imported passenger cars8.

The acquisition support for BEVs in itself has probably not helped uptake of BEVs
significantly. However, the combination of vehicle and energy taxes provide a significant
incentive for BEVs. Parkkonen14 has estimated, that the tax benefits for a BEV compared toa gasoline or diesel car are in the order of 15,000 € over a time period of 10 years.
In 2018, the scrapping premium was used for some 7,000 vehicles. The average CO2
value for the new replacement vehicles was 100 g/km, 18 g/km lower than the average newcars in 2018. However, the scrapping premium has not been a sufficiently strong instrument
to lower the average age of the passenger car fleet in Finland.
The idea behind the conversion support is to enable older vehicles to switch to renewablefuels (E85 and biogas). However, the impact of the conversion support has been rather

25

https://www.vero.fi/globalassets/henkiloasiakkaat/autoverotus/verotaulukko-1a_1365_2018.pdf

17

limited. E85 or flex-fuel conversions are only allowed for MY 2007 and older vehicles.
Retrofitting to methane again in most cases imply significant loss of luggage space.
The support for refueling infrastructure is probably also of limited impact. The Energy
Authority has so far launched two competitive biddings, in 2018 and 201926. The total
support in the 2018 bid was 3 M€. Support was given to 6 methane refueling facilities and to
5 high power charging stations. The 2019 bid will close in September 2019.

Projections
In 2018, in preparation for the update of the biofuels mandate for 2021 to 2030, the Prime
Minister’s Office (PM Juha Sipilä) launched a tender for a study with the title “Cost effective
pathways of biofuels until 2030”. A consortium led by Pöyry Management Consulting Ltd
won the tender. The other partners were VATT Institute for Economic Research and TEC
TransEnergy Consulting Ltd. The final report of the study was published in early October
201827 (“Biofuels 2030”). The study confirmed the definition of policy set in the 2016 nationalenergy and climate strategy, Finland will need some 30 % liquid biofuels in 2030 to meet a
50 % emission reduction target in road transport.
The main conclusions of the Biofuels 2030 study can be summarized as follows (withcomments):•

Finland can reach a 50% emission reduction by 2030 with a combination of improved
energy efficiency, 30% liquid biofuels (800 ktoe), 250,000 EVs and 50,000 biogas
vehiclesoconfirmation of the definition of policy set in the 2016 national energy andclimate strategyo•mandate set at 30% (actual) for 2030

The current and planned indigenous production capacity would be sufficient for a
30% share of liquid biofuels, but the production would for the greater part be basedon imported feedstockoa separate subtarget of 10% advanced biofuels to speed up development ofindigenous biofuels based on, e.g., lignocellulosic feedstocks

26

https://energiavirasto.fi/liikenteen-infratuki

27

http://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/161074/63-2018-

Biopolttoaineiden_kustannustehokkaat_toteutuspolut_vuoteen_2030_.pdf?sequence=1&isAllowed=y18

•The effect of the new biofuel mandate on pump prices (with tax) is estimated to be+5% on an average (-3…+14%), which with current prices and taxation system would
mean +7 cnt/l (relative to the current mandate of 20 % with double counting)ofluctuations in current daily pump prices of fuels can easily be +5 cnt/l, so theimpact can be considered to be relatively marginal•

The cost increase for the various business sectors and the end-users induced by the
new mandate would, on an average, be moderate•

The effects of the new mandate on the state economy is limited as well, as the effecton tax revenues is estimated to be less than 0.3%, while increase in VAT
compensates for reduced fuel taxesowith the current tax system (energy and vehicle taxes) a drop-in tax revenues
will be an issue when moving towards electrification of vehicles

A summary of the Biofuels 2030 study is available as appendix to this report.

19

Sweden
Key facts for Sweden
Total fuel consumption of the road transport sector:
6,700 ktoe, of which 1,500 ktoe are renewable
Number of vehicles in use:
5.5 million of which 0.3 million are alternative fuel vehicles (incl. electric vehicles)
Current GHG emissions from the road transport sector:
15 MtCO2eq in 2017
The energy consumption of the road transport sector in Sweden is projected to decrease
due to more energy efficient vehicles.
The target is to reduce GHG emissions from the transport sector (excl. aviation) by 70%
compared to 2010 by 2030.
Measures to achieve this target include Bonus-Malus and reduction obligation.
Scenarios show that it seems possible to achieve this target. However, measures forincreased transport efficiency are needed in order to meet the targets in a sustainable
way.

Energy supply and demand
Introduction
Figure 7 below illustrates the supply of energy in Sweden from 1970 to 2018. The amount ofenergy supplied within the Swedish energy system has been about the same since the mid1980s, between 550-600 TWh per year (1,980-2,160 PJ). The industrial sector used 141
TWh (508 PJ) in 2018, mainly biofuels and electricity to run processes. The residential
sector used 147 TWh (529 PJ), mainly district heat, electricity and biofuels. The transport
sector used 84 TWh (302 PJ), mainly petroleum products but also biofuels and electricity.

20Figure 7: Supply of energy in Sweden 1970-2018, TWh, Sources: Swedish Energy Agency and Statistics Sweden

Transport sector
The transport sector uses mainly petroleum products but also some electricity and a growing
share of biofuels. In the transport sector, petroleum products accounted for 76% of theenergy use in 2018. During the last few years the amount of biofuels has increased
significantly. Road transport accounted for 92% of the final domestic transport sector energy
use in 2018. Figure 8 shows the final use in TWh in 2018.

Figure 8: Energy use for transport 1970-2018, TWh, Sources: Swedish Energy Agency and Statistics Sweden

21

Almost all energy for transport is imported, both fossil and biofuel products. When HVO wasintroduced on the Swedish market, it was produced from crude tall oil from Sweden, Finland,
and the United States. As the demand for HVO increased, the number of feedstocks andcountries of origin increased. Today, the raw materials are slaughterhouse wastes, Palm
Fatty Acid Distillate (PFAD), crude tall oil, palm oil, corn oil and rapeseed (see Figure 9). The
majority of feedstock for HVO is imported (Figure 10).
3%

4%

10%
Slaughterhouse wastes
37%

Palm Fatty Acid Distillate(PFAD)
Crude tall oil
Palm oilCorn oil46%

Figure 9: Raw materials for HVO used in Sweden 2018. Source: Swedish Energy Agency

Figure 10: Country of feedstock origin for HVO consumed in Sweden in 201722

The current Swedish biofuel production includes ethanol, FAME, HVO and biogas and isshown in Table 3.
Table 3: Current Swedish biofuel production, ktoe
Ethanol

FAME

HVO

Biogas

Total

Ktoe

126

177

179

120

602

TWh

1,5

2,1

2,1

1,4

7,1

A clear trend of the increasing use of biofuels within the transport sector can be seen in
Figure 11, especially of biodiesel (both FAME and HVO). The use of biofuels amounted to
17 TWh (61 PJ) in 2017 which corresponds to 21 % of the transport sector’s energy use.
The electricity use within the road transport sector is close to zero. However, around 3 TWh(11 PJ) of electricity is used in railways.
Almost 84% of the renewable fuel used for road transport in Sweden during 2018 was low
blending of hydrotreated vegetable oil (HVO) and fatty acid methyl ester (FAME) in diesel.

Figure 11: Biofuel use in Sweden 1995-2018. Source: Swedish Energy Agency

23

Targets for emission reductions in road transport
Swedish energy policies aim to promote ecological sustainability, competitiveness andsecurity of supply. The energy policies are based on the EU regulatory framework.
EU goals by 2030•

Reduce energy consumption by 32.5 % through increased energy efficiency•

At least 32 % of energy consumption provided from renewable sources•

14 % of energy consumption by the transport sector provided from renewable energy•

Reduce GHG emission for Sweden by 40 % compared with 199028

Swedish energy and climate goals•

50 % more efficient energy consumption by 2030 compared to 2005•

100 % of electricity production shall be from renewable sources by 2040•

2045, at the latest, Sweden will have no net emissions of greenhouse gases (GHG)•

For the transport sector, a reduction in emissions (not including domestic air travel) ofat least 70% by 2030, compared with 2010

Measures to promote reduced CO2 emissions from road transport
The overall goal of Sweden’s environmental policy is to be able to pass on to the next
generation a society in which major environmental problems have been solved, without
increasing environmental and health problems beyond the country’s borders. Sweden aims
to become one of the world’s first fossil-free welfare countries. To achieve this, the fossil-fueldependency of the transport sector needs to be broken. Several measures are needed, suchas reducing the total energy demand of the transport sector (through energy efficient
vehicles and a transport efficient society) and ensuring that the remaining energy is bothrenewable and sustainable.
In 2017 a new climate policy framework was approved. The long-term climate goal meansthat by 2045, at the latest, Sweden will have no net emissions of greenhouse gases (GHG).
In more precise terms, the long-term climate goal means that emissions from activities on
Swedish territory will be cut by at least 85% compared with emissions in 1990. To achieve
net zero emissions, flexibility measures are included (i.e. investments in other countries toreduce emissions). For the transport sector, a reduction in emissions (not including domestic
air travel) of at least 70% by 2030, compared with 2010, has also been adopted.
In the strategy on living cities, the government has decided on a milestone goal that28

sectors not included in the EU Emissions Trading System

24passenger transport by public transport, walking and cycling shall account for at least 25 %of passenger transport in the country by 2025 and the share shall double in the long term.
This goal also means limiting the growth of passenger car traffic which in the long run cannot
increase if this goal is to be achieved. These goals are not matched to the climate target,and it may require more or less of these parts to reach the climate target in 2045.
In mid-2018 the Government introduced what is known as a bonus-malus system, whereby
environmentally adapted vehicles with relatively low carbon dioxide (CO2) emissions (up to
60 g/km) are awarded a bonus at the time of purchase, and vehicles with relatively high CO2emissions (above 95 g/km) are subject to a higher tax (malus) during the first three years.
The system includes cars, light buses, and lights trucks. The bonus is limited to a maximumof SEK 60,00029.
Another important measure introduced in mid-2018 is the GHG reduction obligation, which
entails an obligation for fuel suppliers to reduce GHG emissions from sold volumes ofgasoline and diesel fuels by incorporating biofuels.
In 2020 the reduction obligation is 4.2 % for gasoline and 21 % for diesel. The reduction
obligation will be increased over time with an indicative target of 40% overall reduction in
2030, indicatively composed of 28 % for gasoline and 66 % for diesel.
The biofuels included in the reduction obligation system are subject to the same energy andCO2 taxation as fossil fuels. Biofuels outside the reduction obligation scheme have reduced
taxes.
The reduction obligation has reduced climate impact from gasoline and diesel. The fuelsuppliers have so far fulfilled the reduction obligation according to the current levels in thescheme. Fuel producers seem to have shifted focus from high-blended and pure biofuels to
low-level blending into gasoline and diesel. There is no incentive for the fuel suppliers to
exceed the obligation, which means that the reduction obligation is both a floor and a roof forbiofuel use.
For a more extensive list of policy measures, the effects and lessons learned, see the report
The contribution of Advanced Renewable Transport Fuels to transport decarbonization in
Sweden - 2030 and beyond(https://www.ivl.se/download/18.20b707b7169f355daa77ae0/1561538469463/C416.pdf).

29

1 SEK is around 0.12 USD

25

Projections
The Swedish Transport administration makes different types of projections, both businessas-usual (BAU) and scenarios with different developments. In the current BAU-projection,transport demand is expected to increase by around 25% from today to 2040. The share ofvehicle kilometers by electric vehicles would reach 38% by 2040. The share of renewablefuels is assumed to stay on the same level as today, since the reduction obligation scheme
is on the same level 2040 as today in the BAU-projection.
The Swedish transport administration also has scenarios that reach the climate targets for
Sweden, i.e. 70% reduction of CO2-emissions to 2030 compared to 2010 and zero
emissions in 2045. The scenarios combine three areas of action to reach the targets set for
the Swedish transport sector in the future, namely:•

A transport efficient society•

More efficient vehicles and propulsion•

Transition to renewable energy

The starting point is that the route chosen includes all these three areas of action. The
reason is that the expected rapid transition requires multiple parallel measures for effects tovindicate. Moreover, to simultaneously pursue several tasks is a way to diversify andminimize risks. It is also important to pick a clear path that others may follow. Furthermore,
given the fact that the resources needed for the transition such as raw materials for biofuelsand batteries, vehicles and infrastructure, are limited on a global scale, allowing a multitudeof actions increases the chances for success. Finally, there are synergistic effects from theactions working in combination, primarily from a more transport efficient society.

26

Figure 12: The gap between BAU scenario and the goals for the Swedish transport sector. Source: Swedish
Transport Administration

Figure 12 illustrates three different projections; the grey line illustrates the CO 2-emissions if
no improvements would be made in the vehicle fleet and the transport demand increases.
The yellow line illustrates the BAU-scenario; the transport demand increases by around 25%
but with an improved vehicle fleet due to measures already decided today (the CO2
regulation for new vehicles on EU-level is very important). The green line illustrates the pathneeded to meet the climate targets. The red arrow illustrates the gap between where we
expect to be in 2045 if no additional measures are taken and where we need to be to reachthe climate targets.
The GHG reduction obligation is an important measure in Sweden and currently the levels inthe system are only set until 2020. The decision on reduction levels for the coming years will
have a very large impact on the development of renewable fuels in Sweden (both the fuels
included in the system and indirectly also the fuels outside).
There is also a lot of activity concerning electrification of the transport sector and one
important measure is the Bonus-Malus system. The idea of the bonus malus system is to
reward vehicles that emit relatively small amounts (up to 60 grams per kilometer) of carbon

27

dioxide (CO2), with a maximum bonus of 60,000 SEK30, while burdening vehicles that emit
relatively large amounts of CO2 with higher vehicle tax for the first three years: malus. Thisway, the bonus malus system can serve as a complement to the more general fuel tax, andcontribute to reducing the transport sector's oil dependence and climate impact. The BonusMalus system has significant impact on the sales of new cars. There is also a new climate
premium introduced in 2020 in the form of state aid for certain environmental vehicles. The
premium will promote the introduction of environmental trucks and electric non-road mobile
machinery on the market and contribute to reduced greenhouse gas emissions. The
Swedish Transport Administration has been given a Governmental assignment to develop
deployment strategies for an electric road system.

30

1 SEK is around 0.12 USD

28

Germany
Key facts for Germany
Total fuel consumption of the road transport sector:
54,120 ktoe, of which 2,850 ktoe are renewable in 2017
Number of vehicles in use:
About 50 million in road application, of which 1.6% are alternative fuel vehicles (incl.
electric vehicles)
Current GHG emissions from the road transport sector:
162 million- tCO2eq in 2017
The energy consumption of the road transport sector is projected to likely increase until
2030 due to different prognoses.
The target is to reduce GHG emissions from the transport sector by 42% compared to1990 by 2030.
Measures to achieve this target include the transposition process of the RED- II and
ESR into national laws and regulations. Moreover, the Climate protection Law will be thebase allowing to reach the targets until 2030 or not. It is very likely that the GHG quota
will be continued from 2021 onwards and further CO2-related instruments will come into
effect.

Energy supply and demand
Introduction
The primary energy demand of Germany in the year 2017 was 325 Mtoe (13,594 PJ) andthe corresponding final energy consumption was 223 Mtoe (9,329 PJ). Almost 30% of final
energy consumption (66 Mtoe – 2,755 PJ) was used in the transport sector. After a steady
growth phase in the 1990s, from 2000 on the total demand for energy in transport declined
slightly. Since 2010, it has been increasing steadily again. Compared to 1990, the energy
demand increased by 16% in the transport sector, while the total energy demand ofGermany decreased by 9% in the same period. Above all, the demand for diesel and jet fuelis rising, while the consumption of gasoline has fallen sharply in the last 20 years. In 2017,82% of the 66 Mtoe (2.755 PJ) in transport were used in road transport, 15% in aviation andonly 2% and 1% in rail transport and inland shipping, respectively. Figure 13: shows thedevelopment of the final energy consumption.

29

240

Final energy consumption in Mtoe/a220

Industry, trade and services

200

Private households

180
Mining and manufacturing
160
Transport(renewable fuels)
Transport(electricity)
Transport(natural and associated gas)Transport(other petroleum-based fuels)
Transport(diesel)Transport(gasoline)

140
120

100
80
60
40

20
0
1990

1995

2000

2005

2010

2015 2017*© DBFZ, 09/2019
data base: AGEB 2019; * priliminary data

Figure 13: Development of the energy demand of different sectors (DBFZ based on AGEB 2018)31

Transport sector
In 2017, the German energy consumption in the transport sector (64.8 Mtoe w/o electricity)
was 96% fossil (53% diesel, 26% gasoline, 16% jet fuel, 0.2% CNG/LNG, and 0.5% LPG)
and only 4% were renewable fuels. The renewable share includes biofuels such as biodiesel(FAME) with 1.9 Mtoe (80 PJ) and bioethanol with 0.7 Mtoe (31 PJ). Other renewable fuels
like vegetable oils, HVO/HEFA and biomethane are less than 0.1 Mtoe (3.1 PJ).
The German biofuel sector has been heavily influenced by changing political conditions(abolition of tax breaks for biofuels in 2011 and switch from energy-based to GHG based
biofuel-quota in 2015). As a result, biofuels were mainly used as blends and the total amountof biofuels brought onto the market decreased slightly despite the steadily increasing energy
demand. Figure 14 shows the production and use of biofuels in Germany as well as theachieved GHG mitigation. While the fraction of pure biofuels was still around 60%(2.7 million tonnes) of total renewable fuels in Germany in 2007, due to changed policies it

31

AG Energiebilanzen e.V., Auswertungstabellen zur Energiebilanz Deutschland 1990-2017, Stand: Juli 2018

(online: https://ag-energiebilanzen.de/index.php?article_id=29&fileName=ausw_30jul2018_ov.xls)

30

has meanwhile dropped to well below 1% in 2017. HVO/HEFA is not produced in Germany,
it is completely imported. The production volumes of biodiesel (FAME) were at about thelevel of domestic use until 2011. Since 2012, production volumes have been rising slightly
despite decreasing biodiesel use. Germany is currently a net exporter of biodiesel(0.8 million tonnes). The biofuel market for gasoline substitutes has developed rather
steadily. Since 2011, it has accounted for up to 23% (1.2 million tonnes) of the total biofuel
used (by energy content). The remaining demand is imported. Biomethane has been
established on the market at a rather low level. The amount of biomethane used as fuel wasaround 0.04 Mtoe (1.6 PJ) in 2017. This is equivalent to about one third of the CNG fuelused in transport. The total amount of biomethane produced and fed into the natural gas gridis significantly larger at around 0.8 Mtoe (33.2 PJ) per year and is mainly used in the

4,5

10

4

9

3,5

8

6

2,5

5
2

4

1,5

3
2

0,5

1

0

0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018

1

Production

Use

Vegetable Oil
Bioethanol
GHG mitigation

Biodiesel (FAME)
Bioethanol in ETBE

GHG mitigationin Mio. t/a

7

3

2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018

Production and use of biofuels in transport
in Mtoe/aelectricity and heating market.

HVO / HEFA
Biomethane (Biogas)© DBFZ, 09/2019
Data base: BDBe 2019, 2019; BLE 2015a, 2018; BNetzA und BKartA 2018; Destatis 2018, 2019; FNR 2019; IFRI 2019; OVID 2019a, 2019b;
VDB 2015; HVO / HEFA: no production in DE; Biomethane: production also for electricity and heat sector; GHG mitigation: 2019 + 2010
35% based on RED, 2011-2017 based on BLE data

Figure 14: Development of biofuel production and use (adopted from DBFZ 2019) 32

32

Naumann, Karin: Monitoring Biokraftstoffsektor. 4. überarbeitete und erweiterte Auflage. Leipzig: DBFZ

31

The biofuels used avoided 7.7 million tonnes of greenhouse gases (GHG) in 2017. The
average specific GHG mitigation potential of biofuels within GHG quota is 81% for biodiesel(FAME), 65% for HVO/HEFA, 83% for bioethanol and 91% for biomethane.
Vehicle fleet
The stock of registered vehicles has been very volatile in Germany in recent years. While thestock of road vehicles is steadily rising, other segments like rail vehicles and vessels show
significant declines. Table 4 shows the German vehicle stock in 2010 and in 2017. The
number of passenger cars has increased by almost 10%. This is essentially driven by amassive increase (35%) in diesel-powered passenger cars. The stock of gasoline-powered
passenger cars (incl. LPG and CNG/LNG) has remained virtually unchanged since 2010.
Although there is an impressive increase in hybrid electric vehicles (HEVs) and batteryelectric vehicles (BEVs,) the absolute number of vehicles, in particular for battery electricvehicles, continues to be very low, only 79,000 registered vehicles are clearly off the (nowdiscontinued) target of one million electric vehicles (incl. Plug-in hybrid vehicles, PHEV) on
the German market by 2020.
Table 4: German vehicle stock – comparison of amounts in 2010 and 201733
2010

2017

Change42.3 million
30.5 million
11.3 million
419 thousand
72 thousand
37 thousand
2 thousand

46.5 million
30.5 million
15.2 million
421 thousand
75 thousand
237 thousand
54 thousand

+9.9%
-0.1%
+35.1%
+0.6%
+5.5%
+535%
+2,235%Light and heavy duty
vehicles

2.4 million

3.0 million+24.2%

Semi-trailer trucks

178 thousand

211 thousand+18.5%

Buses and coaches

76 thousand

79 thousand+3.9%

Rail vehicles

14.3 thousand

9.9 thousand (in2015)- 0.8%

Airplanes

1.3 thousand

1.2 thousand-8.7%

Vessels

4.7 thousand

4.1 thousand-12.2%

Passenger cars
Gasoline
DieselAutogasNatural gas (CNG/LNG)
HEV (incl. PHEV)
BEV(DBFZ-Report Nr. 11). 2019. ISBN 978-3-946629-36-8. (online:
https://www.dbfz.de/fileadmin/user_upload/Referenzen/DBFZ_Reports/DBFZ_Report_11_4.pdf)
33

Radke, Sabine: Verkehr in Zahlen 2018/2019. 47th year. Federal Ministry of Transport and digital

Infrastructure Germany, ISBN 978-3-00-061294-7

32

The sharp increase in the number of road vehicles is also reflected in the resulting mileage.
Between 2010 and 2016, the mileage increased by 9% and corresponded to the increase ofvehicle fleet. The annual mileage of a vehicle significantly influences the type of vehicle
propulsion system used. Passenger cars have shown that diesel-powered vehicles are morecommonly used for longer journeys. They make up 33% of the vehicle stock and account for
47% of the mileage of passenger cars. Alternative propulsion systems such as natural gas,
LPG and electric propulsion are only responsible for less than 2% of the mileage. Trucks arealmost exclusively diesel driven. Only subordinate mileage of 2% and 0.5%, respectively,
can be attributed to gasoline and alternative propulsion systems.

Targets and measures
An overview on existing transport fuel policy measures on EU level and their nationaltransposition in Germany is shown in Figure 15:. A more detailed overview on measures isgiven in (DBFZ 2019)34 and (IEA T39 2019) 35.

34

Naumann, Karin: Monitoring Biokraftstoffsektor. 4. überarbeitete und erweiterte Auflage. Leipzig: DBFZ(DBFZ-Report Nr. 11). 2019. ISBN 978-3-946629-36-8. (online:
https://www.dbfz.de/fileadmin/user_upload/Referenzen/DBFZ_Reports/DBFZ_Report_11_4.pdf)
35

IEA TCP Bioenergy T39 (2019) Implementation Agendas- 2018 Update: A review of key biofuel producing

countries- May 2019 (to be published by 12/2019 at http://task39.ieabioenergy.com/publications/)

33

European Union
Strategies
White paper transport
Energy Efficiency Plan
A resource-efficient Europe
Roadmap low carbon economy in 2050
Roadmap Resource Efficient EU
Energy Roadmap 2050
Green paper - climate and energy policies 2030
Clean Power for transport
Strategy for Low-Emission Mobility
Clean Energy For All Europeans...

Directives

Regulations

EuropeanCommission

European Council§

2003/96/
EC (ETD)2009/30/
EC (FQD)

2009/28/
EC (RED)

2014/94/
EU (AFID)

EG 598/2009(Antidumping)

EU 599/2009(Antidumping)

EuropeanParliament

2015/652

2018/2001(FQD methods)(RED II)

EU 1315/2013

2018/842(ESR)(Verkehrsnetz)

EU 1194/2013

2015/1513(antidumping)

Amendment of RED and FQD...

Targets & Frame

Germany

Strategies
Mobility and Fuels Strategy
Climate protection plan 2050
Climate package (for 2030)
National Energy and Climate Plan

FederalGovernment
Parliament

Laws

§

§37a, bBImSchG

Regulations
EnergieStG

BiokraftNachV36.
BImSchV37.
BImSchV38.
BImSchV

UERV

Federal Council© DBFZ 09/2019 | without claiming to be exhaustive
2009/30/EG (98/70/EC) – FQD Fuel Quality Directive | 2009/28/EC – RED Renewable Energy Directive | 2003/96/EC – ETD Energy Tax Directive | 2014/94/EU – AFID Directive on
the deployment of alternative fuels infrastructure | 2018/842 (ESR) – Effort sharing regulation 2021-2030 | BImSchG: Federal Immission Control Act (§37a – Minimum shares of
biofuels related to the total fuel amount in transport) | EnergieStG: Energy Tax Law | Biokraft-NachV – Biofuels sustainability regulation | 36. BImSchV – Regulation for
implementation of biofuels quota | 37. BImSchV – Regulation for counting of electricity based fuels and coprocessing of biooils on the GHG quota | 38. BImSchV – Regulation forthe determination of further terms regarding the GHG mitigation of fuels

Figure 15: Policy frame in the EU and their transposition in Germany (adapted from DBFZ 2019)36

Key to fulfil the RED and FQD targets is the GHG-based quota system, which was been
implemented in 2015. It obligates fuel supplier companies to sell the respective biofuel
together with its fossil counterparts’ gasoline or diesel (which is usually done throughblending), in order to produce a fuel mix with 3.5%, 4% and 6% GHG mitigation (compared
to fossil gasoline and diesel mix) for the entire fuel sector from 2015, 2017 and 2020
onwards. The target continues after 2020 at the level of 6% a year. In case of non-fulfilmentof these obligations, penalties will apply of about 47 EURct/kg CO2 equivalent. Biofuels thatare counted within the quota are fully energy taxed. Moreover, the German BImSchV
regulations provide for instance the frame for a maximum limit of conventional biofuels andminimum quotas for advanced biofuels as well as counting of electricity for transport.
According to the German Climate protection plan in transport, the GHG mitigation has to beabout 40-42% until 2030 (c.t. 1990, i.e. reduction about 65-68 million tonnes). The
framework conditions for renewables in transport until 2030 is set with the Renewable
Energy Directive II (RED-II, 2018/2001/EU, set of 14% renewable fuels in transport by 2030

36

Naumann, Karin: Monitoring Biokraftstoffsektor. 4. überarbeitete und erweiterte Auflage. Leipzig: DBFZ(DBFZ-Report Nr. 11). 2019. ISBN 978-3-946629-36-8. (online:
https://www.dbfz.de/fileadmin/user_upload/Referenzen/DBFZ_Reports/DBFZ_Report_11_4.pdf)

34

and frame for dedicated fuels and sustainability criteria). In addition, the Effort sharing
regulation (ESR 2018/842), which sets binding annual emission reductions by Member
States from 2021 to 2030, is important. Recently, Germany has started the transposition
process of the RED-II and ESR into national laws and regulations. Moreover, the Climate
action program 2030 as well as the Climate protection law will be the base allowing to reachthe targets until 2030 or not.
It is very likely that the GHG quota will be continued from 2021 onwards combined with CO2related instruments.

Projections
In the following section several scenarios are summarized, and an analysis of pathways toachieve the German targets for the transport sector is presented.
Summary of scenarios until 2030/2050
A summary of different scenarios of developments in Germany based on Wietschel37 et al ispresented in Table 5.

37

Wietschel, Martin et al.: Überblicksstudie. Auswertung von Studien und Szenarien der Energiesystemanalyse

mit Schwerpunkt „Mobilität“ (online: https://um.baden-wuerttemberg.de/fileadmin/redaktion/mum/intern/Dateien/Dokumente/5_Energie/SDA/Studie_Energiesystemanalyse_Mobilitaet.pdf)

35

Table 5: Brief summary of exemplary scenarios(RS – Reference scenario; FS – Future scenario, a RS and national solo efforts; b global climate protection)(Öko 2016)38(BDI 2018)39(dena 2018)40(Öko/ISI2015)41

Population (million) in
2030 / 2050

78 / 74

81 / 77

81 / 76

78 / 74

GDP CAGR until 2050

0. % p.a.

+5%

1.1% p.a.

0. % p.a.

Oil (USD/bbl) in 2030 /
2050

120 / 195

111a, 80b /115a, 50b

77 / 65

128 / 195

CO2 (EUR/tCO2) in 2030 /
2050—

26 / 45—

30 / 50

Reference scenario (RS)Current
measures will
be continued

Current
measures will
be continued

Current
measures will
be continued

Current
measures will
be continued

Future scenario 1 (FS1)

Decarbonizationof transport
sector andmaximum
vehicleefficiency

80% GHGreduction in
2050

Strongvariation oftechnologies
used

80% GHGreduction in
2050

Future scenario 2 (FS2)

FS1 + Qualityof life in innercities and

95% THGreduction in

Strongelectrification

95% GHGreduction in

PremiseBase assumption

Scenario target

38

Zimmer, Wiebke et al.: RENEWBILITY III - Optionen einer Dekarbonisierung des Verkehrssektors. Endbericht

zum Vorhaben FKZ 2013/S 142-247681 (online: http://www.renewbility.de/wpcontent/uploads/Renewbility_III_Endbericht.pdf)
39

Gerbert, Philipp et al.: Klimapfade für Deutschland, Boston Consulting Group, prognos, Januar 2018 (online:

https://bdi.eu/publikation/news/klimapfade-fuer-deutschland/)
40

Bründlinger, Thomas et al.: dena-Leitstudie Integrierte Energiewende, Juli 2018 (online:

https://www.dena.de/fileadmin/dena/Dokumente/Pdf/9261_denaLeitstudie_Integrierte_Energiewende_lang.pdf)
41

Repenning, Julia et al.: Klimaschutzszenario 2050, 2. Endbericht, Studie im Auftrag des Bundesministeriums

für Umwelt, Naturschutz, Bau und Reaktorsicherheit, Dezember 2015 (online:
https://www.oeko.de/oekodoc/2451/2015-608-de.pdf)

36Premise

Biomass assumption(Öko 2016)38(BDI 2018)39(dena 2018)40

shifting of
freight traffic to
the rails

2050

in all sectors

2050

RS: until 2020
7% cap andafter 2020
phase-out for
fuels from
cultivatedbiomass.

RS: maximum
sustainableamountavailable forenergy use is
29 Mtoe(1,200 PJ) to
31 Mtoe(1,300 PJ) in
Germany.

Domestic
potential forbioenergy is
23 Mtoe(950 PJ/a);imported
potential forbioenergy is 4
Mtoe/a(173 PJ/a);
the assumed
potential limitof 24 Mtoe/a(1023 PJ/a) isachieved for all
scenarios

Domestic
biomass
potential is 29
Mtoe/a(1,211 PJ)(RS), 29
Mtoe/a(1,223 PJ)(FS1) and
27 Mtoe/a(1,131 PJ)(FS2); rawmaterials
mainly waste
and residues;
importedbiomass
necessary

Domestic PTX
is 11 to 14
Mtoe/a (468 to
590 PJ/a )in
2050.

FS2: PTL after
2030; 2040:
25% PTL of
total liquid
fuels; 2050:
50% PTL of
total liquid
fuels;
domestic or
imported PTL
is used.

FS: Blending
quota for
Bioethanol(lignocellulose)
of 5%,
biodiesel (BTL,HVO palm oil,
UCOME) of
10% andbiomethane of
4%; total
potential
biofuels of
maximum 90 PJ

PTX assumption(Power to X, PTG – togas,
PTL – to liquids)

FS: 5% in
2030; 95% in
2050; 100%
imported

FS: available
sustainableamountincrease from
26 Mtoe(1,076 PJ) in
2015 to 29
Mtoe(1,200 PJ) in
2050;
therefrom 9%
for transport
sector
FS2: demandfor PTX fuels is
29 Mtoe/a(1,224 PJ) forall sectors, 21
Mtoe (878 PJ)
for transport
sector;significant
importdemand forGermany

FS2: PTG
hydrogenmainlyproduced inGermany and
PTG methane
imported fromEU(Öko/ISI2015)41

Based on the studies investigated in Wietschel et al42, Figure 16 shows exemplary vehicle
fleet scenarios until 2050 and Figure 17 shows scenarios for the final energy demand in theGerman transport sector by 2050 split into the most important energy carriers.

42

Wietschel, Martin et al.: Überblicksstudie. Auswertung von Studien und Szenarien der Energiesystemanalyse

mit Schwerpunkt „Mobilität“ (online: https://um.baden-wuerttemberg.de/fileadmin/redaktion/mum/intern/Dateien/Dokumente/5_Energie/SDA/Studie_Energiesystemanalyse_Mobilitaet.pdf)

37

100%

Road vehicle fleet in 2050

80%

60%
40%

20%

350 tsd.

350 tsd.

350 tsd.

595 tsd.

654 tsd.

595 tsd.

930 tsd.

930 tsd.

930 tsd.

32 mill.

43 mill.

39 mill.

43 mill.

43 mill.

43 mill.

41 mill.

42 mill.

41 mill.

37 mill.

44 mill.

43 mill.

0%

RS FS1 FS2

RS FS1 FS2

RS FS1 FS2

RS FS1 FS2

RS FS1 FS2

RS FS1 FS2

RS FS1 FS2

Öko 2016

BDI 2018

dena 2018

Öko/ISI 2015Öko 2016

BDI 2018

dena 2018

Passenger cars (PC)
Gasoline
PHEV (methane)

DieselBEV.
Natural gas
FCEVLight / heavy duty vehicles (LDV/HDV)
PHEV
HEV

PHEV (gasoline/diesel)
Pantograph (electricity)

Figure 16: Vehicle fleet scenario Germany in 2050 (DBFZ based on Wietschel et al)43
50

Final energy demand in Mtoe

45

40
35

30
25

20
15

10
5

Öko 2016
Fuels (fossil)

BDI 2018
Fuels (fossil, bio, synthetic)

dena 2018
Biofuels

FS2

FS1

RS

FS2

FS1

RS

FS2

FS1

RS

FS2

FS1

RS

0
Öko/ISI 2015
PtX

Electricity

Figure 17: Final energy demand of German transport sector in 2050 (DBFZ based on Wietschel et al )43

Although different methods, assumptions and data bases were used for these scenarios, thefollowing statements can be made:43•

The national target for 2030 will not be reached in most of the studies•

Avoiding traffic or shifting traffic is relevant in all scenarios but to a different extent

Wietschel, Martin et al.: Überblicksstudie. Auswertung von Studien und Szenarien der Energiesystemanalyse

mit Schwerpunkt „Mobilität“ (online: https://um.baden-wuerttemberg.de/fileadmin/redaktion/mum/intern/Dateien/Dokumente/5_Energie/SDA/Studie_Energiesystemanalyse_Mobilitaet.pdf)

38

•

Direct or indirect use of electricity is dominant for all transport modes•

Combustion engines remain relevant, but with alternative fuels•

There is demand for synthetic fuels (especially e-fuels or PTX-fuels) that will bemainly imported•

Passenger cars show direct electrification in all scenarios (BEV with market shares of
10-30% until 2030 and 30-70% until 2050), while other powertrains and related fuels(e.g. PHEV, fuel cell, synthetic fuels, CNG) and their shares greatly vary between the
different assessments•

LDV and HDV become increasingly more relevant due to high estimated growth;battery-based powertrains are seen for LDV up to 12 t and HDV short-radius
distribution; other solutions vary between the different assessments (e.g. trolley HDVwith hybrid-diesel and battery, hydrogen-HDV, and HDV with synthetic fuels)

Scenarios for biofuels and other renewable fuels until 2030
In order to analyze the impacts of the European and national targets and frames on thedesign of the GHG quota in Germany, nine different scenarios for the development of theenergy supply until 2030 have been investigated using the BENOPT model44,45 . More details
on objectives, frame assumptions, data base and results can be found in the working paperof Meisel et al46.
In each scenario the optimal fuel mix has been modeled based on input parameters such as:

44•

political frame,•

biomass feedstock potentials,•

international feedstock and fuel imports,•

blending walls based on the existing fuel standards,•

existing fuel capacities and their meaningful increase,

Millinger, Markus: Greenhouse gas abatement optimal deployment of biofuels from crops in Germany

Transport. Res. Part D-Transport. Environ. 69, 265 – 275: https://doi.org/10.1016/j.trd.2019.02.005
45

Millinger, Markus: BioENergyOPTimisation model (Version 1.0). http://doi.org/10.5281/zenodo.2812986

46

Meisel, Kathleen et al.: Future Renewable Fuel Mixes in Transport in Germany under RED II and Climate

Protection Targets: Untersuchungen zur Ausgestaltung der Biokraftstoffgesetzgebung in Deutschland Arbeitspapier (04.07.2019), Energies 2020-13(7)-1712: https://doi.org/10.3390/en13071712 Results of the
BMEL/FNR project FZK 22401416 (online:
https://www.dbfz.de/fileadmin/user_upload/Referenzen/Studien/Ausgestaltung_Biokraftstoffgesetzgebung.p
df)

39

•

specific efficiencies for fuel production,•

increase of renewable electricity within the German electricity mix,•

increase of gaseous fuels in transport and•fuel specific GHG emissions and production costs.

Moreover, electro mobility for road transport has been taken into account as well. The
relative advantage of different fuel options in fulfilling the overall energy demand within the
GHG quota system is mainly based on the fuel specific GHG mitigation costs. These areused as an indicator for competitiveness of fuel options on the market47.
The results of the two most important scenarios are briefly explained as follows.
Base case scenario – direct transposition of RED-II
If the RED-II frame is directly implemented to reach 14% renewables in transport while thefinal energy demand in road and rail transport is about 52Mtoe (2,178 PJ) in 2030 (56 Mtoe 2,350 PJ in 2017), the corresponding GHG quota is just 5.7% (w/o upstream emission
reduction and electricity in rail transport). This would be less than the 6% target already set
for 2020 onwards and of course far away from reaching the target on GHG reduction until
2030 (40-42% ct. 1990). This is even the case with about 6 million BEV, that have beentaken into account and an increase of the gas share in transport towards 3% until 2030.
To fulfill RED-II minimum targets about 3,8 Mtoe (160 PJ) are required (Figure 18:). To reach
this, important options are biomethane from biowaste, which will fulfill the advanced fuelquota set in RED-II, as well as sugar cane ethanol and/or domestic ethanol (mainly based on
starch, in the case that sugar cane ethanol imports do not increase), which will provide therenewable fuel share in 2030. Moreover, there will be decreasing shares on used cooking oil(UCO) methyl ester as well as on rape seed based methyl ester and palm based methyl
ester. Options that show increasing markets globally such as HVO/HEFA will not play a role.

47

Müller-Langer, Franziska: Importance of biofuels within the Renewable Energy Directive (RED II) as acontribution to climate protection in transport. 16th International Conference on Renewable Mobility. Berlin(Germany). 21.01.2019

40

3,5
3
2,5
2

1
0,5

Biomethane (maize)
Ethanol (sugar cane)
FAME (rape seed)
HVO/HEFA (palm)

Biomethane (biowaste)
Ethanol (sugar beet)
FAME (UCO)
Electro mobility (BEV)

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2017

0

2030 © DBFZ, 09/2019

1,5

2016

Fuel quantities within the GHG quota (Base case)in Mtoe4

Ethanol (starch)
FAME (palm)
FAME (animal fats)

Figure 18: Base case scenario – fuel quantities within the GHG quota until 2030

Climate scenario – 40% GHG reduction
To achieve the target of -40% GHG until 2030, a significant reduction on final energy
demand in road and rail transport is required (39 Mtoe – 1,620 PJ compared to 50 Mtoe 2,110 PJ in 1990) and at the same time a comparably high GHG quota of about 34.5%
which corresponds to about 41% renewables.
To reach this, in addition to about 10 million BEV and an increasing gas market shares,
approximately 14 Mtoe (690 PJ) from almost all considered fuel options would be required(Figure 19). To ensure this, commercial fuel production capacities for advanced biofuels(mainly straw based ethanol and synthetic BTL fuels) and PTX (mainly PTL) need to beinstalled and come into operation already in the early 2020s.

41

16
14
12
10
8

4
2

Biomethane (biowaste)
LPG
Ethanol (sugar cane)
Biomethanol
FAME (UCO)
HVO/HEFA (UCO)PTL

PTG hydrogen
Bio-LNG (biowaste)
Ethanol (sugar beet)
FAME (palm)
FAME (animal fats)
HVO/HEFA (rape seed)Electro mobility (BEV)

Biohydrogen
Ethanol (starch)
Ethanol (straw)
FAME (rape seed)
HVO/HEFA (palm)
BTL

Figure 19: Climate scenario – fuel quantities within the GHG quota until 2030

42

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2017

0

2030 © DBFZ, 09/2019

6

2016

Fuel quatities within the GHG quota (climate target)
in Mtoe18

USA
Key facts for the USA
Total fuel consumption of the road transport sector:
708 Mtoe, of which 36.1 Mtoe are renewable
Number of vehicles in use:
260 million, of which 1.08 million are alternative fuel vehicles (incl. electric vehicles)
Current GHG emissions from the road transport sector:
1,871 MtCO2eq in 2017
The energy consumption of the road transport sector in the US is projected to decrease
due to fuel efficiency standards, vehicle electrification, and biofuels.
The Renewable Fuel Standard is aimed at reducing GHG emissions from thetransportation sector. State regulations will reduce GHG emissions in certain areas suchas California.
Measures to lower GHG emissions include Renewable Fuel Standard and California
Low-Carbon Fuel Standard. Scenarios show that it is possible to reduce GHG
emissions from the transportation sector.

Energy supply and demand
While renewable energy capacity continues to grow, current U.S. energy production andconsumption is largely reliant on fossil fuels. The United States is currently a net exporter ofcoal and natural gas, and is expected to become a net exporter of petroleum liquids after2020.48 Much of this increased production of fossil fuels is tied to continued development oftight oil and shale gas resources. However, renewable transportation fuel production has
also been increasing, with an average annual percentage change of 15.3% for ethanol
production (1981-2018) and 10.4% for biodiesel (2008-2018).49
In 2018, the U.S. produced 95.722 quadrillion BTU of energy (100.987 EJ), a combination offossil fuels, nuclear electric power and renewable energy.50 Renewable energy production

48

https://www.eia.gov/outlooks/aeo/pdf/aeo2019.pdf

49

https://tedb.ornl.gov/wp-content/uploads/2019/03/TEDB_37-2.pdf

50

https://www.eia.gov/totalenergy/data/monthly/pdf/sec1_3.pdf

43

accounted for 12% of total energy production in the U.S. (11.617 quadrillion BTU, i.e. 12.256
EJ). In addition, the U.S.’s net imports of energy amounted to 3.625 quadrillion BTUs (3.824
EJ).51 Ultimately, the U.S. consumed 101.093 quadrillion BTUs (106.653 EJ) of energy in2018.52 Of this total, 80% was in the form of fossil fuels (coal, coal coke imports, natural gas
and petroleum).53 Domestic petroleum accounted for 89% of U.S. petroleum consumption.54
Figure 20 shows the U.S. primary energy consumption by sector in 2018.

Figure 20: 2018 U.S. primary energy consumption by sector55

The U.S. transportation sector accounted for 28% of the country’s energy use in 2018.56 Of
this energy, 91.7% of it was comprised of petroleum, with transportation petroleum
accounting for 93% of total U.S. petroleum production and 69% of U.S. petroleum use.57
According to 2016 figures, 59% of U.S. transportation energy use was in cars and light

51

Ibid.

52

Ibid.

53

Ibid.

54

https://tedb.ornl.gov/wp-content/uploads/2019/03/TEDB_37-2.pdf

55

U.S. Energy Information Administration, Monthly Energy Review, July 2019

56

Ibid.

57

Ibid.

44

trucks.58 5% was used for medium trucks, and 19% for heavy trucks and buses, with around
18% being used by non-highway modes of transportation.59
In 2018, of the fuel consumed for transportation in the U.S., 3.1% (880.19 tBTU, i.e. 928.7
PJ) was from natural gas, 5% (1,419.67 tBTU, i.e. 1,497.8 PJ) from renewables (including
ethanol and biodiesel) and 0.3% (24,964 GWh)60 from electricity.61 Ethanol is typically
blended with gasoline, while biodiesel can be used in diesel engines or blended withpetroleum diesel. In 2018, U.S. production of ethanol surpassed 16 billion gallons (31,000ktoe), with 90% of it being consumed domestically.62 Biodiesel production in 2018 hit 1.8
billion gallons, with close to 1.9 billion gallons (5,6000 ktoe) being consumed domestically,
including imports.63 U.S. biofuels production by RFS category is summarized in Table 6.
Table 6: U.S. biofuels production in 201864

U.S. fuel production by typeMillion Gallons [Million%
Liters]Renewable fuel (-20% GHG)

14,955 [56,605]

Ethanol (corn)

86%

14,955 [56,605]

Advanced (-50% GHG)

2,212 [8,372]

Biodiesel

1,855 [7,021]

Renewable diesel

305 [1,154]

Other

52 [197]

Cellulosic (-60% GHG)

275 [1,041]

Ethanol

6.5 [25]

Renewable natural gas (LNG/CNG)

268 [1,014]

Other

0.5 [2]

58

Ibid.

59

Ibid.

60

85.18 tBTU equivalent

61

https://tedb.ornl.gov/wp-content/uploads/2019/03/TEDB_37-2.pdf

62

Ibid.

63

Ibid.

64

EPA RIN production data

45

12.5%

1.5%

Targets and measures
There are a number of measures in place that are driving transportation sector greenhousegas (GHG) emissions reductions in the United States including several policies andinitiatives aimed at increasing biofuel use and vehicle efficiency. While there is no current
national target for GHG emissions reduction, 24 states plus the territory of Puerto Rico haveadopted state-level GHG targets, as depicted in Figure 21 below.65

Figure 21: States (in green) that have adopted state-level GHG targets in line with the Paris Agreement

Corporate Average Fuel Economy (CAFE) and GHG Emission Standards
Corporate Average Fuel Economy (CAFE) standards, regulated by the U.S. Department ofTransportation’s (DOT’s) National Highway Traffic and Safety Administration (NHTSA), set
annual targets for average fuel economy that automakers are required to meet for light-,
medium- and heavy-duty vehicle fleets. In parallel, the U.S. Environmental Protection
Agency (EPA) has developed vehicle tailpipe GHG emission standards. Under the current
standards, cars and light trucks of model year 2017-2021 must meet a combined fleet-wide
fuel economy of 40.3-41 mpg (5.74 – 5.84 liters/100 km) on average, and require to not
exceed 163 grams/mile of carbon dioxide (CO2) (101 g CO2/km).

65

https://www.usclimatealliance.org/

46

CAFE standards were first enacted in 1975 in order to reduce energy consumption in thetransportation sector by increasing the fuel economy of cars and light trucks (now expanded
into medium and heavy duty vehicle fleets). The CAFE standards set a fleet-wide average
fuel economy that must be achieved by each automaker for each category of vehicle. When
CAFE standards are raised it drives automakers to create a more fuel-efficient fleet,strategically reducing GHG emissions on a per mile basis for each fleet66.
Renewable Fuel Standard (RFS)
Adopted in 2005 and expanded in 2007 under the Energy Independence and Security Act,
the Renewable Fuel Standard (RFS) established volume requirements for renewable fuelbased on life-cycle GHG emission reduction thresholds across several fuel categories.
Annual volume targets in the initial legislation culminate at 36 billion gallons (136.25 M liters)of total renewable fuels per year in 2022, with a 15 billion gallon (56.78 M liters) per year cap
on conventional biofuels (e.g. corn ethanol).67 The volume targets are depicted in Figure 22.

Figure 22: Volume targets for renewable fuel under RFS68

The Environmental Protection Agency (EPA) is tasked with annually adjusting volume
targets for the four categories of renewable fuel specified in the legislation: cellulosic
biofuels, advanced biofuels, biomass-based diesel and total renewable fuels. Fuels in each66

https://www.transportation.gov/mission/sustainability/corporate-average-fuel-economy-cafe-standards

67

https://www.epa.gov/renewable-fuel-standard-program/overview-renewable-fuel-standard

68

Conversion factor from billion gallons to billion liters is 3.785

47

of these categories must meet the corresponding lifecycle GHG emissions reduction
threshold relative to a petroleum baseline: cellulosic biofuels - 60% reduction, advanced
biofuel - 50% reduction, biomass based diesel - 50% reduction, and conventional renewablefuels - 20% reduction.
Table 7: GHG emission reduction thresholds for renewable fuels in RFS
Renewable Fuel Category

Lifecycle GHG Emissions Reduction Threshold

Cellulosic

60%

Advanced

50%

Biomass Based Diesel

50%

Conventional Renewable Fuel

20%

The RFS is implemented through the EPA administered program via a Renewable
Identification Number (RIN), which assigns a RIN to each gallon of renewable fuel. Eachregulated entity is required to meet the set volumes based on the percentage of its
petroleum product sales, these set volumes are known as renewable volume obligations(RVOs). Entities can meet their RVOs by either selling biofuel volumes or purchasing RINs
from other entities that have exceeded their requirement in the RIN market69.
While there has been significant growth in total renewable fuel since the RFS was adopted,
throughout the life of this program, the growth of cellulosic biofuel production has been lower
than anticipated. The reduced volume targets have been largely satisfied by renewable
natural gas, with cellulosic ethanol making up only 2% of the cellulosic biofuel volume.
California’s Low-Carbon Fuel Standard (LCFS)The State of California adopted the Low-Carbon Fuel Standard (LCFS) in 2009 to incentivize
the production of renewable fuels. This fuel agnostic program aims to reduce transportation
GHG emissions, setting annually decreasing carbon intensity benchmarks for gasoline,
diesel, and their replacement fuels. The LCFS has a goal of reducing the carbon intensity of
its transportation fuel pool by 20% by 2030 (relative to a 2011 baseline).70 California’s Global
Warming Solutions Act of 2006 has a GHG emission reduction goal of 80% below 1990

69

https://afdc.energy.gov/laws/RFS.html

70https://ww3.arb.ca.gov/fuels/lcfs/background/basics-notes.pdf

48

levels by 2050.71 The program has succeeded in increasing renewable fuel use (see Figure23), and has established a market for credit transactions exceeding $2 billion in 2018.72 The
State of Oregon has a program similar to the LCFS requiring reduction of carbon intensity of
its transport fuels. Other states in the USA are exploring similar clean fuel programs to
reduce transport fuel GHG emissions.

2 500

Fuel Volume (Millon GGE)

2 000

1 500

1 000

500

0
Ethanol

2011
2012
Biodiesel

2013
2014
Renewable Diesel

2015
2016
2017
2018
Fossil Natural Gas
Biomethane

2019
Electricity

Figure 23: Renewable fuel growth resulting from California's LCFS (2011-2019)

The Bioeconomy Initiative
The Bioeconomy Initiative seeks to enable the sustainable production and utilization of
biomass for affordable domestic biofuels, bioproducts, and biopower.73 This initiative wascreated by the Biomass Research and Development (BR&D) Board, an interagency
collaborative, co-chaired by the U.S. Department of Agriculture (USDA) and U.S.
Department of Energy. The initiative seeks to align the member agencies’ goals andactivities, to address technology uncertainty, leverage resources and capabilities, andaccelerate bioeconomy growth.

71

Ibid.

72

https://ww3.arb.ca.gov/fuels/lcfs/background/basics-notes.pdf

73

https://biomassboard.gov/pdfs/Bioeconomy_Initiative_Implementation_Framework_FINAL.pdf

49

Projections
According to projections by the U.S. Energy Information Administration’s (EIA’s) Annual
Energy Outlook 2019 report, overall U.S. transportation energy consumption is projected to
grow between 2018 to 2050.74 However, increases in efficiency will partially offset thisgrowth. The transportation sector is set to see the steepest decline in energy intensity
among all sectors, calculated as “the amount of energy consumed per unit of potential
demand.“75 Light and heavy duty vehicles are projected to see a 32% decline in level ofenergy used per mile between 2018 and 2050, despite an increase of 20% in miles traveled,
due to fuel economy and energy efficiency standards. Heavy duty vehicle energy
consumption and diesel use is expected to be at 2018 levels in 2050, again due to fueleconomy standards, despite a 52% increase in truck vehicle miles traveled. However,transportation is projected to remain the sector with the highest CO2 intensity, as petroleum
remains the dominant fuel used in vehicles.
The EIA’s projections as depicted in Figure 24 show alternative fuels increasing their shareof total transportation energy consumption, as the motor gasoline and distillate fuel oil
shares drop from 84% in 2018 to 74% in 2050. Growth is projected in sales of battery
electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV) and hybrid electric vehicles.
Second to electricity, jet fuel consumption is projected to increase by 35% between 2018and 2050, as aircraft fuel efficiency is outpaced by increased demand for air transportation.
Natural gas use in medium- and heavy-duty vehicles is also projected to increase in terms of
total sale share.76

74

https://www.eia.gov/outlooks/aeo/pdf/aeo2019.pdf

75

Ibid.

76

https://www.iea-amf.org/app/webroot/files/file/Annual%20Reports/AMF_Annual_Report_2018_FINAL.pdf

50

Figure 24: Projections of annual LDV sales and of transport sector fuels consumption in the USA7778

77

EIA 2019 Annual Energy Outlook

78

The Conversion factor for quadrillion BTUs to Mtoe which is 25.1997

51

BrazilKey facts for Brazil
Total fuel consumption of the road transport sector:
84.3 Mtoe in 2017, of which 16.9 Mtoe are renewable (a)Number of vehicles in use:
39 million in 2017, of which 27.7 million are alternative fuel vehicles (incl. flex fuel +ethanol + hybrid vehicles)(b)Current GHG emissions from the road transport sector:
187 MtCO2eq in 2017(a)(c)
The energy consumption of the road transport sector in Brazil is projected to increase
due to the car fleet raise driven by the economic growth(b).
The target is to reduce GHG emissions by 37% compared to 2005 by 2025 andindicated a 43% reduction by 2030, economy-wide, which includes the transport
sector(d).
Measures to achieve this target include RenovaBio Policy, which will gradually reduce
the average GHG intensity in the Brazilian transport sector(e).
Scenarios show that it seems possible to achieve this target.

(a)79 (b)80 (c)81 (d)82 (e)83

Energy supply and demand79

EPE (2019) Brazilian Energy Balance. Empresa de Pesquisa Energética, Rio de Janeiro. Source: www.epe.gov.br

80

EPE (2018). Demanda de Energia dos Veículos Leves: 2018 – 2030. Empresa de Pesquisa Energética, Rio deJaneiro. Source: www.epe.gov.br
81

IPCC (2006) Intergovernmental Panel on Climate Change – IPCC Guidelines for National Greenhouse Gas

Inventories, Prepared by the National Greenhouse Gas Inventories Programme, Eggleston H.S., Buendia L.,
Miwa K., Ngara T., and Tanabe K. (eds). Published: IGES, Japan. Source: www.ipcc.ch
82 BRASIL (2015) intended Nationally Determined Contribution towards Achieving the objective of the United Nations

Framework Convention On Climate Change. September 2015. Source:

http://www.itamaraty.gov.br/images/ed_desenvsust/BRAZIL-iNDC-english.pdf
83

BRASIL (2017) Law 13,576/2017, December 26th. Brasília: Diário Oficial da União. Fonte: www.planalto.gov.br

52

Introduction
The Brazilian energy matrix is quite varied and stands out worldwide for its high degree of
renewability, an attribute observed in few countries in the world. As a result, GHG emissions
per unit of energy consumed in the country are small compared to other nations. However,energy consumption per capita is currently well below standards in developed countries.
Reducing the level of poverty tends to increase energy demand, even when prioritizing lessenergy-intensive processes, decoupling the increase in energy consumption from economic
growth.
Thus, the great challenge of the Brazilian energy sector is to adapt to provide an increasing
national energy demand, while ensuring a high share of renewable sources in its matrix, andguaranteeing competitiveness and reliability. According to EPE's medium and long term
studies, this will imply expansion and production of liquid biofuels such as ethanol andbiodiesel, as well as the significant upscaling of installed capacity of wind, solar, biomass
thermoelectric plants, the construction of new hydroelectric plants, and also investments inenergy efficiency. In short, there are several actions and policies to be taken with theultimate goal of keeping GHG emission indicators among the smallest in the world, withoutcompromising socioeconomic progress and the commitment made by Brazil to combat
climate change.
Current situation
The present energy situation of Brazil is summarized in Figure 25. Brazil has already ahigher contribution of renewable energy, 43% of the domestic energy supply, compared tomost countries. Fossil fuels still represent 54.9% of the total domestic energy supply, and77.8% of transport sector, while biofuels are already 19.7% of the transport sector in 2017(21.1% for road transport)84, and are going to rise to 27.9% by 2029 (31.8% for roadtransport)85.

84

EPE (2019) Brazilian Energy Balance. Empresa de Pesquisa Energética, Rio de Janeiro. Source:www.epe.gov.br
85

EPE (2019) Ten-Year Energy Expansion Plan 2029. Empresa de Pesquisa Energética, Rio de Janeiro. Source:www.epe.gov.br

53

Brazilian Primary Energy Supply

Transport Sector

Figure 25: The Brazilian primary energy supply and Final consumption energy for transports in 2017

The main renewable fuel in transport is hydrous ethanol, used as E100, followed byanhydrous ethanol and biodiesel, which are blended into gasoline and diesel, respectively,by mandate.
The use of biofuel in the transport sector in 2017 was 26.6 billion liters of ethanol (hydrous
and anhydrous), the majority is from sugar cane, 0.4 billion liters come from corn ethanol,and 3.6 billion liters of biodiesel. The total energy consumption of biodiesel was 4.2 billion
liters85. Almost 70% of the biodiesel production has been made from soy-bean oil86.
The use of electricity in the transport sector is quite insignificant, since it is used only intrains and the presence of hybrid and electric vehicles in the fleet is inferior of 0.5%.
Since passenger cars are not licensed for the use of diesel as a fuel, the ethanol andgasoline consumption are related to this class of vehicles, whereas diesel and biodiesel areused by trucks, buses, various types of machinery and some light-duty vehicle models. In
Brazil, approximately half of the work related to the transport of goods is based on heavyduty vehicles.
Concerning the main oil products used in transport sector in 2017, there was a net import ingasoline86 of 4.0 billion liters87 and diesel of 12.3 billion liters88. Net imports of ethanol were

86

Gasoline A and diesel A: fuels without the addition of hydrous ethanol and biodiesel, respectively.

87

EPE (2019) Brazilian Energy Balance. Empresa de Pesquisa Energética, Rio de Janeiro. Source:www.epe.gov.br
88

ANP (2018) Resolution ANP nº 719, 22 de fevereiro de 2018. Agência Nacional de Petróleo, Gás Natural e

Biocombustíveis. Brasília: Diário Oficial da União. Source: www.anp.gov.br54

small (0.4 billion liters)88.
Ethanol
The use of biofuels, notably ethanol, has a long tradition in Brazil. In 1975, the Brazilian
government started the National Alcohol Program (Proalcool), aiming to reduce dependenceon oil imports by promoting the production of fuel ethanol (anhydrous as an additive togasoline and hydrous to dedicated fleet– E100).
Ethanol has remained an important part of the Brazilian transport fuel system, with an E100
distribution network and a mainly locally produced car fleet. In 2003 flex vehicles werelaunched that could operate on gasoline or E100 according to the preferences of theconsumer (mainly based on fuel prices ratio). The market share quickly increased to morethan 90% of new car sales. In 2017, 74% of Otto cycle fleet was flex fuel. This development
was also supported by tax-breaks both regarding the vehicle sales taxes and the fueltaxation.
The blending mandates for anhydrous ethanol in gasoline have been varied over time fordifferent reasons. In early 2015, it was raised to 27% and has been kept at this level since.
Fuel distributors are annually obliged to provide evidence to the regulatory entity (ANP Brazilian Agency of Petroleum, Natural Gas and Biofuels) of the requirement to meet theiranhydrous blending mandate, based on the sales of gasoline of the year before. Similar
rules are applied to ethanol producers and importers88.
There were roughly 370 sugar mills in Brazil by the end of 2017, and two industrial scale
cellulosic ethanol plants using bagasse, and six operating plants of corn ethanol, most colocated with sugarcane mills and operating also in the off-season and some stand-alone
plants. The installed capacity was around 40 billion liters of hydrous ethanol and 20 billion
liters of anhydrous ethanol. The actual split between sugar and ethanol is typically 40/60, but
this ratio is adjusted each season by the mill owners to take account of the expectations forthe harvest as well as for the sugar and ethanol markets89. In addition to the 26.6 billion liters
directed in 2017 for transport purposes, some 1.0 billion liters were consumed for chemicaland other non-fuel purposes and a practically neutral import/export balance. So, theBrazilian internal production was 27.7 billion liters87.
Biodiesel
The National Biodiesel Production Program (PNPB) has been instituted in 2004 to promote89

EPE (2019b) Ten-Year Energy Expansion Plan 2029. Empresa de Pesquisa Energética, Rio de Janeiro. Source:www.epe.gov.br55

domestic biodiesel production and reduce the diesel import dependency. It has a social
element to alleviate and reduce regional economic differences by supporting family-operated
farms90. There are some 50 licensed biodiesel plants, predominantly based on soy-bean oil(some 70%), followed by tallow (17%). Through an auctioning system, the fuel distributors
are obliged to buy the biodiesel to accomplish their blending mandate. The overall
production was 4.3 billion liters in 201788. Federal Law 11,097/200590 established biodiesel
as a fuel and set a compulsory 2% blending mandate in 2008, which was increased to 3%
later the same year, to 4% in 2009, 5% in 2010. The Federal Law 13,303 /201491 enforced ablending mandate to 6%, and 7% later in the same year. In 2016, Federal Law 13,26392
established new legal mandate with a compulsory blending to 8% in 2017, rising to 10% in
2018, reaching 11% in September 2019. The legal framework enables an increase of
biodiesel in the blend up to reach 15% at the earliest in 2023. Fleets of trucks, buses,
agricultural machinery etc. can go beyond the mandate to 20-30%, if so desired.

Targets and measures
The Paris Agreement
Brazil is a party to the UNFCCC and has instituted National Policy on Climate Change93.
Following the Paris Agreement, the Nationally Determined Contribution (NDC) of Brazil has
been formalized to the commitment to a target to reduce the GHG emissions by 37% by2025 and an indicative contribution of a reduction of 43% of the GHG emissions by 2030,
both relative to 200594. Such tasks include the agriculture, forest, industrial processes andwaste sectors, adopting a nationwide coverage for the economy-wide, including CO2, CH4,
N2O, perfluorocarbons, hydrofluorocarbons and SF6.
Brazil intends to adopt further actions that are consistent with the 2°C temperature goal, in

90

BRASIL (2005) Law 11,097/2005, January 13th 2005. Brasília: Diário Oficial da União. Fonte:

www.planalto.gov.br
91

BRASIL (2014) Law 13,303 /2014, September 24th 2014. Brasília: Diário Oficial da União. Fonte:

www.planalto.gov.br
92

BRASIL (2016) Law 13,263/2016, March 23rd 2016. Brasília: Diário Oficial da União. Fonte:

www.planalto.gov.br
93

BRASIL (2009) Law 12,187/2009, December 29th 2005. Brasília: Diário Oficial da União. Fonte:

www.planalto.gov.br
94

BRASIL (2015) intended Nationally Determined Contribution towards Achieving the objective of the United

Nations Framework Convention On Climate Change. September 2015. Source:
http://www.itamaraty.gov.br/images/ed_desenvsust/BRAZIL-iNDC-english.pdf

56

particular:•

strengthening the share of sustainable bioenergy in the Brazilian energy mix toapproximately 18% by 2030, by expanding biofuel consumption, amplifying ethanol
supply, including by heightening the share of advanced biofuels (second generation),and increasing the share of biodiesel in the diesel mix•

achieving 45% of renewables in the energy mix by 2030

It is important to highlight that Brazil's NDC applies to the economy as a whole and istherefore based on flexible paths to achieve the 2025 and 2030 objectives. This means thatthe Brazilian approach considers that technological innovations, market conditions, public
policies, among others, may affect the GHG emission allowance cost hierarchy of specificactions and therefore the NDC of the country does not set sectoral targets.
RenovaBio
The Brazilian Biofuel Policy95, RenovaBio, has the main purpose of expanding biofuel
production in Brazil (including ethanol, biodiesel, biogas and aviation biokerosene), based on
the principles of predictability, environmental, economic and social sustainability as well as
being compatible with market growth. Notwithstanding, RenovaBio aims to internalize thepositive environmental impacts due to the use of biofuels and to contribute to meeting theBrazilian commitments under the Climate Agreements, such as Paris Agreement.
RenovaBio includes a Carbon Certificate (CBIO) trading system (1 CBIO = 1 tonne CO2(eq)).
It links producers of biofuels (generators of CBIO) with the fuel distributors (obligated buyersof CBIO) via a market trading system. The producers will have their production certified by
an LCA methodology to ascertain the GHG emission of the production, expressed as g
CO2/MJ, which multiplied with the production placed on the fuel market results in the numberof CBIO generated.
Each distributor has a reduction goal expressed as g CO2/MJ (allowing for both reduction in
specific GHG emissions and in energy efficiency improvements), which multiplied by theenergy of the fuels sold in MJs gives the number of CBIO to be acquired within the national
GHG reduction target. The means of equating this is by the trading of CBIO certificates in a
dedicated and supervised marketplace.
The quantitative goal of the RenovaBio system is to gradually reduce the average GHG
intensity in the Brazilian transport system, which are equivalent, in 2030, to 90.7 million

95

BRASIL (2017) Law 13,576/2017, December 26th. Brasília: Diário Oficial da União. Fonte: www.planalto.gov.br

57

CBIO that shall be acquired by the distributors. In this way, savings on the emission intensity
in production and use of advanced biofuels is promoted 96. The expected impact is to reducethe increase in GHG emission from transports.
Others Policies
In light of the public policies adopted for biofuels, Proalcool and PNPB were precursors forthe insertion of ethanol and biodiesel, respectively, in the Brazilian fuel market. In addition,other policies, including financial and tax incentives, have enabled the development of new
industrial, agricultural and automotive technologies that generate employment and income.
Moreover to the blending mandate, BNDES (Brazilian Bank for Economic and Social
Development) has developed specific financing tools for the sugar and ethanol sector,
whose objective is to encourage the production of biofuel. Biodiesel was boosted by legal
mandates, which successfully introduced biodiesel in the energy sector. Furthermore, stateand federal tax differences on ethanol and biodiesel are policies for promoting greater
participation of biofuels in the fuel market97.
In addition, more recently, the Rota 2030 - Mobility and Logistics Program, is part of theFederal Government's strategy for developing the country's automotive sector, by raising thevehicle energy efficiency and hereby impact the final energy demand of the transport sector.
For mid and long term, Rota 2030 will contribute to harmonizing biofuels and alternative
vehicles technology.
PROCONVE, the Motor Vehicle Air Pollution Control Program, was created in 1986, by the
National Council of the Environment (Conama / Brazilian Ministry of Environment), andaimed at mitigating local pollutant emission levels from light and heavy duty vehicles. It
contributed to the technological development of fuel, engine and auto parts manufacturing,as well for the fuel and engine efficiency. Throughout its more than 3 decades of
implementation, PROCONVE has been allowing ever-smaller levels of pollutants to be
emitted by the engines. Although initially this program was not directly aimed at climatechange, it enables the creation of mechanisms to address GHG /fuel economy regulation.

96

CNPE. (2018). Resolução CNPE n° 05, de 15 de março de 2018. Conselho Nacional de Política Energética.

Brasília: Diário Oficial da União. Source:
http://www.mme.gov.br/documents/10584/71068545/Resolu%C3%A7%C3%A3o+n%C2%BA+5_2018_CNPE.P
DF/a46326ab-df5d-4d3f-ad52-b9f1ffc7ab1d.
97

EPE (2016) Analysis of Biofuels’ Current Outlook. Empresa de Pesquisa Energética, Rio de Janeiro. Source:www.epe.gov.br

58

Barriers and Policy Gaps
As could be seen, Brazil is already a major protagonist in the renewable fuels consumption
in the transport sector. Several public policies contributed to the promotion of biofuels,
including actions by government, sector agents and civil society. Among the regulatory andeconomic instruments that structure public policies, EPE (2016) highlighted the mandates to
add biofuels to oil products, the mechanisms of tax differentiation between renewables andfossils, and financing tools.
In order to reach the main national objectives and to ensure the impressive presence ofadvanced transport biofuels, there are some challenges that Brazil may consider.
•

Improve the convergence between RenovaBio, Proconve and Rota 2030. All thesethree instruments work towards a more efficient, cleaner, more reliable andeconomically sustainable transport market growth.

•

Consider new emerging technological trends in future policies. The synergy between
artificial intelligence, internet of Things (IoT), robotics, drones, blockchain,augmented reality, virtual reality and 3D printing shall improve biofuels production
and, consequently, its consumption.

Besides that, there are a number of themes that require attention:•

Technical barriers from sugar cane lignocellulosic ethanol production need to besolved. Despite some issues, in the last years, Brazil has built a productive capacityof 100 million liters of this biofuel, with two plants (GranBio and Raízen) in operation,
while other plants worldwide have failed in the same period.

•

It is key to stimulate the voluntary use of biodiesel beyond the mandatory blend, in
specific fleets (trucks, buses, agricultural machinery etc. - as topic 1.2), in line withthe legal framework.

In addition to these internal challenges, there are global issues affecting biofuels production
and use that may contribute to their expansion, not only in Brazil, but around the world as
well.
•

Ethanol production is limited to a few countries (note that USA and Brazil respond formore than 80% of global production). The growth of global production is a necessary
condition to improve international markets and to strengthen Brazil internal
production and use.

•

Envisaging the creation of a more expanded global ethanol market, Brazil crafted
agreements that seek to contribute to improve income, employment and living

59

conditions, reducing poverty, illnesses and isolation in the countries involved,
especially in Africa.
•

Brazil signed the technical and technological cooperation bilateral agreements
towards promoting production and use of biofuels in Africa, focusing on 2003–2010.
Brazil also entered into trilateral cooperation, involving Mozambique and Kenya plus
a Northern donor (EU), to develop bioenergy projects, between 2008 and 2010.

•

In 2007, a Memorandum of Understanding (MoU) on biofuels cooperation was signed
between Brazil and the US, stimulating private-sector biofuels investment in Central
American, Caribbean and African countries.

•

Biofuels cultivation worldwide should occur in areas that protect the native forest,with legal framework respecting the environment, natural resources and local
communities, likewise as in Brazil. It should also ensure that agriculture produces
safe, nutritious and sufficient food, seeking to reach the Sustainable Development
Goals (SDG 2), which is Zero Hunger by 2030.

Notwithstanding, it is worth saying that a more successful way to go beyond thesechallenges is to create an environment where all these challenges are discussed and thesolutions could be interconnected. To achieve this goal, it is important to have a strategy
based on clear targets and analysis of local potential pathways.

Projections
EPE has made and published several projections for the future, e.g. Ten-Year Energy
Expansion Plan 202998 and others up to 2030 and to 2050, each with somewhat different
scope. Below is a selection of the data to give some details on the forecasts for the period to2050.
The projected energy usage in the transport sector to 2050 is shown in Figure 26 for a lowerand higher scenario, respectively. It is clear that there will be a growth over time in theoverall energy consumption, most notably in the diesel consumption49,99,100.

98

EPE (2019) Ten-Year Energy Expansion Plan 2029. Empresa de Pesquisa Energética, Rio de Janeiro. Source:www.epe.gov.br
99

EPE (2018). Cenários de oferta de etanol e demanda Ciclo Otto 2020 – 2030. Empresa de Pesquisa

Energética, Rio de Janeiro. Source: www.epe.gov.br
100

EPE(2018) Cenários de Demanda para o PNE 2050. Documento de Apoio ao PNE 2050. Empresa de Pesquisa

Energética, Rio de Janeiro. Source: www.epe.gov.br

60

Figure 26: Transport energy demand projections over time in two scenarios101

Figure 27: Historic and projected ethanol supply for three scenarios 102

101

EPE(2018) Cenários de Demanda para o PNE 2050. Documento de Apoio ao PNE 2050. Empresa de Pesquisa

Energética, Rio de Janeiro. Source: www.epe.gov.br
102 EPE (2019) Cenários de oferta de etanol e demanda Ciclo Otto: 2020 – 2030. Empresa de Pesquisa
Energética, Rio de Janeiro. Source: www.epe.gov.br

61

With regard to the ethanol supply to 2030, Figure 27 shows the expected growth in the
production to somewhere in the range of 43 to 54 billion liters by 2030, of which some 1billion liters are cellulosic ethanol and 4-5 billion liters are corn-based. From this production,
1-2 billion liters are used for other purposes and another +/-1-3 billion liters are exported (orimported, if necessary), the remainder is used for domestic transport fuel purposes. The split
between use of E100 and anhydrous ethanol in gasoline will vary depending on the
scenarios from 1/3 for low annual production to 50% for the high production scenario.
Regarding biodiesel, the forecasted production, related to the demand generated by theblending mandate, is shown in Figure 28. The use is expected to more than double up to2029 relative to 2017103.

Figure 28: Projected biodiesel production to 2029

Regarding electrification, a report (EPE, 2018d) has made two scenarios for the introductionof electromobility, for light duty vehicles of which the less rapid transition scenario is shownin Figure 29 (the more rapid scenario was considered less likely when weighing in Brazilian
context).

103 EPE (2019) Ten-Year Energy Expansion Plan 2029. Empresa de Pesquisa Energética, Rio de Janeiro. Source:www.epe.gov.br62

Figure 29: Market penetration of hybrid and EV light duty vehicles on the Brazilian market 104

The report concludes that the public policies for accelerating the entry of HEV and EV in the
country will entail significant incentives and investments to off-set the barriers andchallenges that such technologies still need to overcome and that it is necessary to evaluate
in detail the cost effectiveness of these alternatives, since Brazil already has a competitivetechnology to reduce GHG emissions in the light duty transport sector and that its Nationally
Determined Contribution is in line with the adoption of this available solution.
Regarding heavy-duty vehicles, it also concludes that up to 2050, electromobility needs to be
developed and industrialized elsewhere before it can be imported for implementation in
Brazil. Changes in motor/fuel technology for heavy vehicles, such as electrification, will only
be implemented in the country in niche markets and will only marginally be present in the
fleet of heavy duty vehicles in Brazil. The entry of electromobility in the market of heavy
vehicles is not trivial and has not been proposed as a priority policy for reducing GHG
emissions in this segment.
As stated in the EPE (2018d): “regarding the transport sector, internal combustion engines
should continue to be present in the Brazilian matrix in the next decades, and their104

EPE (2018) Eletromobilidade e Biocombustíveis. Documento de Apoio ao PNE 2050. Empresa de Pesquisa

Energética, Rio de Janeiro. Source: www.epe.gov.br

63

replacement by technologies using other forms of propulsion, such as hybrid and electricvehicles, is expected to be slower than the growing presence of liquid biofuels”. In addition,in the document “Electromobility and Biofuels”, we consider that hybrid flex fuel vehicles will
be manufactured in Brazil, using electricity and/or ethanol as well; and BEV will be mostly
fuel cell based on ethanol and gas (biogas/biomethane or natural gas).

Final Remarks
It might be worth to consider that Brazil already presents a degree of renewables content in
its energy matrix that is equivalent to almost the triple of the reality of many countries spread
across the planet. In our Ten-Year Energy Expansion Plan 2029105, the Total Primary Energy
Supply is expected to grow 2.6% (2019-2029), reaching 380 Mtoe, with the renewablesources achieving 48.0% in 2029. The majority of the countries will still be distant from thecurrent Brazilian renewables position in the energy matrix, according to different medium
term studies106107108. Within this framework, the clean sources growth will happen in tandemwith both the Brazilian economy and energy sector, connected to the debottlenecking of therestrained demand. It is worth to mention that all targets concerning the increase of biofuels
production and use will be driven by sustainability criteria.

105

EPE (2019) Ten-Year Energy Expansion Plan 2029. Empresa de Pesquisa Energética, Rio de Janeiro. Source:www.epe.gov.br
106

IEA (2018) World Energy Outlook. International Energy Agency. Source: www.iea.org

107

SHELL (2018) Energy Transition Report. Source: https://www.shell.com/energy-and-innovation/the-energy-

future/shell-energy-transition-report.html
108

EXXON MOBIL (2018) Outlook for Energy: a view to 2040. Source: https://corporate.exxonmobil.com/

64ChinaKey facts for China
Total fuel consumption of the road transport sector in 2017:nearly 300,000 ktoe, of which approximately 3,000 ktoe are biofuel
Number of vehicles in use:
217 million (excluding motorcycles and rural vehicles), of which 1.53 million are electricvehiclesCurrent GHG emissions from the road transport sector:
881 million tCO2eq in 2017
The energy consumption of the road transport sector in the China is projected toincrease due to continuous motorization and industrial development.
The target is to reduce China’s carbon intensity (measured by tonnes of CO2 emissions
per unit gross domestic product) by 60% to 65% compared to 2005 by 2030. No specifictarget is announced for the transportation sector in China.
Measures to achieve this target include improved energy efficiency (e.g., stringent fuelconsumption regulations) and rapid diffuse of electric vehicles.

Energy supply and demand
In 2017, the total primary energy consumption in China was reported as 3,143 million toe(131.6 EJ), representing an annual increase of 3.0%. Coal remained as the major primaryfuel to drive China’s economic development, accounting for 60.4% of the total energy
consumption, followed by petroleum (18.8%), natural gas (7.0%) and non-fossil fuels(13.8%).
China is abundant in coal resources. More than 99% of coal consumed in China wasproduced domestically. For petroleum energy, China has a high reliance on global supply
that up to 68% of petroleum consumption was imported. In 2017, the domestically produced,
imported and exported petroleum were 191.5 million tonnes (Mt), 420.0 Mt, and 4.9 Mt,
respectively. For natural gas, the domestically produced, imported and exported natural gas
were 147.4 billion cubic meter, (bcm), 95.5 bcm, 3.6 bcm, respectively. The reliance rate ofimported nature gas for China was 38%.
In 2017, China generated 6.42 million GWh of electricity, including coal power (64.5%),
natural gas power (3.2%), other thermal power (3.2%), hydropower (18.6%), nuclear power65

(3.9%), wind power (4.8%), and solar power (1.8%), suggesting a declined share of coalbased electricity,
For final energy consumption, 2227 million toe was consumed in 2017 according to China
Renewable Energy Outlook. Industrial sector (57.9%) led in the amount of final energy
consumption among all sectors in China, followed by building sector (21.4%), transport
sector (16.3%), agriculture sector (6.9%), and construction sector (2.2%), respectively.
China consumes 0.589 billion tonnes petroleum. The transportation sector is the main userof petroleum products and was responsible for the use of 57.7% of the total final petroleum
products, while other sectors accounts for 27.4% (industrial sector), 6.9% (living
consumption sector), 5.2% (building sector), 1.1% (agricultural sector) and 1.7% (othersectors). Within the transport sector, road transportation consumed 83% of petroleum
products, followed by aviation (8%), shipping (8%), pipeline & railway (1%).
In 2017, China produced 2.147 million tonnes of biofuel, about 2.6% of global production.
Although the Chinese government has promoted ethanol gasoline in 6 provinces and 31
cities and its consumption accounted for 20% of total Chinese gasoline consumption, thetotal biofuel consumption was only about 3 million tonnes.

Targets and measures
China’s climate commitments
In the Paris climate conference (COP21) in 2015, China pledged in the Intended Nationally
Determined Contributions (INDC) to peak its carbon emissions by about 2030 or earlier.
Furthermore, China has committed to lower its carbon intensity (measured by tonnes of CO 2
emissions per unit gross domestic product) by 60%–65% compared to 2005, to increase theshare of non-fossil energy in the total primary energy to around 20%, and to increase theforest stock volume by 4.5 bcm above the 2005 level. It should be noted that China
previously set a governmental goal of reducing the carbon intensity by 40%-45% compared
to 2005. This target has been achieved in 2017, prior to the initial time plan, as China‘s
carbon intensity has declined by 46% from 2005 to 2017.
For the transport sector, China has set a near-term goal to reduce the carbon intensity
during the period of the 13th Five Year Plan (2016-2020) for energy conservation andenvironmental protection for transport sector, which was administrated by the Ministry ofTransport and local governmental agencies. Buses, freight trucks and ships are involved inthis plan. The CO2 emissions per transport unit (units in passenger-km for coaches, andtonne-km for trucks) should decrease by 2.6% and 8%, respectively in 2020 compared withthe 2015 level. For urban buses, the CO2 emissions per passenger are required to decrease66

by 12.5% during this period.
National energy security and energy supply
The 13th FYP has included an official target to cap total energy consumption at 5 billion tce(tonne standard coal equivalent, equal to 1.43 toe) by 2020. In particular, China will control
the coal consumption to be capped below 4.1 billion actual tonnes. Enhancing energy
security supports maintaining more than 80% of total energy consumption supplied bydomestic sources. To fulfill the overall target, the energy structure will be adjusted by utilizing
renewable and clean energy. Domestic energy production will be allocated to about 4 billion
tce of coal, including 3.9 billion tonnes of coal, 200 million tonnes of crude oil, 220 bcm ofnatural gas, and 750 million tce equivalent energy from non-fossil energy (e.g., wind andsolar power). Thus, the proportion of coal consumption in total energy consumption will beless than 58%, while the proportions of non-fossil energy and natural gas consumption will
be more than 15% and 10%, respectively. The installed capacity of power generation units
will reach approximately 2 million MW. The average coal consumption of power supply will
decrease to 310 gram per kWh or even lower levels, and the loss rate of electricity
transmission and distribution should be controlled within 6.5%.
The National Development and Reform Commission has released a national strategy ofreforming energy production and consumption, which set a target of capping total energy
consumption below 6 tce by 2030. Non-fossil energy and natural gas will account for about
20% and 15% of total energy consumption, respectively. New energy demand will be
primarily fulfilled by clean energy sources.
Action plans on air pollution prevention and control
China has launched a long-term national strategy of developing a beautiful China andpromoting ecological civilization. This indicates an overall target that the entire country willbasically reach the national ambient air quality standards (NAAQS), and better working
targets are now under development. In the near-term, China has released two rounds ofaction plans on air pollution prevention and control since 2013 (2013-2017, and 2018-2020).
In 2018, the central government released the three-year action plan (2018-2020), primarily
focusing on PM2.5 pollution and three major polluted regions (e.g., the Beijing-Tianjin-Hebei
region, the Fen-Wei Plain region, and the Yangtze River Delta region). The three-year action
plan highlights four fundamental, long-term strategies to improve the energy structure,industrial structure, transport structure, and land use structure. According to the three-year
action plan, the annual PM2.5 concentrations for polluted cities exceeding the PM2.5 national
ambient air quality standards (NAAQS) should decrease by more than 18% compared totheir 2015 levels. The ratio of good days (definition of a good day: Air Quality Index
67

(AQI)<100, meaning daily PM2.5 concentration is below 75 µg/m3), and the ratio of severe
pollution days will decrease by more than 25% compared to 2015 (definition of a severe
pollution day: AQI>200, meaning daily PM2.5 concentration is above 150 µg/m3).
Furthermore, the total emissions of SO2 and NOX will be reduced by more than 15%
compared to 2015.
Diesel freight trucks are one of most important emission sources according to the three-year
action plan. It is required to substantially increase the proportion of railway freight. By 2020,
China's railway freight volume will increase by 30% compared with that in 2017, and regional
increases are required as 40% for the BTH region, 25% for the Fen-Wei Plain region, and
10% for the YRD region. For coastal cities with large container ports, China is promoting
multi-modal transport systems to reduce road freight transport by developing dedicatedrailway systems. The volume of such rail-port multi-modal transport activity is planned toincrease more than 10% annually across key port cities in China.
Fuel consumption regulations
China has set a series of increasingly stringent standards limiting distance-based volumetricfuel consumption for new LDPVs. The 4th phase of fuel consumption standards set anational goal to reduce the overall average fuel consumption to 5.0 L/100 km in 2020,
compared with 7.0 L/100 km in 2015. The 5th phase of fuel consumption standards has
been just released in 2019, which set a more stringent goal of national average fuelconsumption at 4.0 L/100 km in 2025 (NEDC). To improve the representativeness of realworld driving conditions, the Worldwide harmonized Light vehicles Test Cycle Procedure(WLTP) will replace the former NEDC by using a conversion factor of 1.15 (i.e., 4.6 L/100 km
under the WTLC as the national average fuel consumption target). The upgrade of the fuelconsumption standard plus the dual credit system, a special mandate on new energy
vehicle, will be an important driver for manufacturers to produce more energy-efficient
vehicles and deploy electric vehicles. The further fuel consumption limit through 2030 is still
under development. According to an advisory report by the Chinese Academy ofEngineering, the average fuel consumption of new passenger vehicles will decrease to 3.2
L/100 km.
China has also developed the fuel consumption standards for medium-and heavy-duty
commercial vehicles (HDVs), which limit volumetric fuel consumption according to vehicle
category and weight class. China’s average fuel consumption for HDVs is targeted todecrease by more than 10% during 2015-2020, aiming to narrow the gap with developed
countries.

68Emissions and fuel quality regulations for vehicles
China has adopted a series of emissions standards for light-duty vehicles, heavy-duty
vehicles and motorcycles since the late 1990s. Each upgrade of emission standard, typicallyevery four or five years on the average, requires more advanced emission control
technologies. The first stage of the most stringent China 6/VI standards (i.e., China 6a/VIa)have been implemented in several regions since July 2019. It is scheduled that the second
stage of China 6/VI (i.e., China 6b/China VIb) will fully take effect from 2023 nationwide.
Historically, the previous emissions standards (China 1 to China 5) were developed basedon the European regulation architypes (i.e., equivalent to Euro 1 to Euro 5). Compared with
the Euro 6 standards, the China 6 standard (GB 18352.6-2016) includes several progressive
features. First, the emission standards of China 6b are stricter than the Euro 6 emission
limits by 33% to 50% under the WLTP. Second, fuel-neutral and technology-neutralprinciples are reflected by the unified limits of NOX and particle number (PN) applicable toboth gasoline and diesel vehicles, and to both multi-port fuel injection and direct injectionengines. Third, a 48-h evaporation testing procedure including diurnal and hot soak
emissions has been specified in the China 6 standard, requiring more efficient control
technologies (e.g., on-board vapor recovery) for evaporative emissions. Similar to theEuropean practice, a real driving emissions (RDE) testing protocol has been required since
the China 6, however, which has not regulated the cold-start emissions.
For heavy-duty vehicles, the China VI emission standard (GB 17691-2018) has beendeveloped greatly based on the Euro VI. The on-road testing by using portable emissions
measurement system (PEMS) will become fully mandatory since China VI b for ensuringconformity through type-approval, zero-mileage and in-service stages. The China VI has
regulated the application of on-board sensor-based emission monitoring (OBM) of NOX
concentrations. Heavy-duty engine manufacturers are required to collect instantaneous OBM
data and transmit the data to Chinese environmental authorities. Such OBM programs havebeen pioneered in several large cities (e.g., Beijing) to monitor NOX emissions for in-use
China IV and China V heavy-duty vehicles. For natural gas vehicles, many local
measurements have found high NOX emissions due to lean-burn combustion without any
NOX control after-treatment device. The China VI standard will only allow stoichiometriccombustion plus three-way catalytic converter for natural gas-powered vehicles.
To assure sufficient control efficacy for the China 6/VI standards, China has improved thefuel quality standards for both on-road and non-road transport sectors (GB 19147-2016).
Since 2019, on-road China 6 gasoline and China VI diesel fuels have been fully supplied
nationwide. The sulfur contents of the new gasoline and diesel fuels should not exceed 1069

part per million (ppm). For the China 6 gasoline, more stringent limits are specified for thecontents of olefins, aromatics and benzene. The upper volumetric limits for olefins andaromatics are reduced to 18% (v/v) (15% for China 6b) and 35% (v/v). For China VI diesel,
the upper mass limit for polycyclic aromatics is reduced to 7% (m/m).
The non-road diesel fuels for all machineries and partial vessels are required to comply with
the China VI diesel fuel quality standard. China has introduced emission control areas inthree coastal regions where the low sulphur fuels (e.g., sulfur content below 0.5% m/m)
should be used for ocean-going ships; the Pearl River Delta, the Yangtze River Delta andBohai-rim waters. In December 2018, the Ministry of Transport released an upgraded action
plan for establishing a national domestic emission control area (DECA). The DECA confirms
the early adoption of the Internationals Maritime Organization (IMO)’s sulfur cap of 0.5%
m/m and pilots a 0.1% m/m sulfur requirement for all ships in the Yangtze and Pearl Rivers
and for 12 nm around Hainan Island. Very recently the Chinese government has scheduled
the fuel sulphur limit, which should be reduced to 0.10% m/m from 2020 onwards in its
domestic ECAs.
New energy vehicles and automotive biofuelsElectric vehicles, also categorized as new energy vehicles in China, have been vigorously
promoted in the past decade as important strategy to reduce petroleum consumption and to
mitigate GHGs and pollutant emissions. In 2012, the State Council of China released thefinal version of “Energy-saving and New-energy Vehicle Development Plan (2012–2020)”. It
proposed that the total stock of plug-in hybrid electric vehicles (PHEVs) and battery electricvehicles (BEVs) in China would exceed 5 million by 2020. The annual production volume of
PHEVs and BEVs in 2020 should reach 2 million.
To fulfill this target, substantial subsidies have been offered by both central and local
governments. The purchase subsidies are determined according to vehicle category (BEVvs. PHEV) and all-electric range (AER). For example, a BEV with 300 to 400 km-AER canreceive 44 thousand RMB (approximately 6,300 USD) subsidies from the central
government. Local governments will provide additional subsidies alongside the central
subsidies. In several cities with strict license control policies (e.g., Beijing, Shanghai),favorable license management policies have been developed to stimulate personal EV
purchases. Consequently, China has become the most important driver in the global EV
market and has accounted for half of the global sales volume since 2017. According to thelatest statistics, the total sales of EVs increased to 1.26 million by 2018. For passenger
vehicle sector, the total sales volume has climbed to 1.05 million by 2018, including 0.79
million light-duty BEVs and 0.26 million light-duty PHEVs. 0.20 million medium-duty and70heavy-duty commercial EVs have been sold in China, almost dominating the total global
sales of commercial EV market. In Shenzhen, almost all the taxis and public transit buses
have been electrified, while urban logistics trucks have been also considerably electrified. In
Beijing, where licenses for conventional fuel vehicles are stringently controlled, the share of
EVs in total vehicle stock is expected to increase to 6% by 2020. It is worth noting that China
is also the largest market of two-wheel electric vehicles. It is estimated that the total numberof electric bikes and electric motorcycles is about 250 million in China.
China has developed a few future technological targets for the new energy vehicle industry.
In 2019, The Ministry of Industry and Information Technology released a draft version of the
New-energy Vehicle Industry Development Plan (2021–2035). According to this plan, by
2025, the fuel economy of new energy vehicles will be at the leading international level,
accounting for more than 15% of total sales. The average fuel economy of new energy
passenger vehicles will be improved to 11 kWh/100 km. The electricity consumption per unit
mass of the electric buses will be 3.2 kWh/100km·t. By 2030, new energy vehicles willaccount for more than 40% of total auto sales in China. The electricity consumption per unit
mass of the electric buses will be 3.0 kWh/100km·t.
The purchase subsidy programs for new energy vehicles are scheduled to be substantiallyadjusted after 2020. The current subsidies for personal EV purchases are scheduled to be
reduced since 2017 and be completely cancelled after 2020. Meanwhile, China finalized its
new energy vehicle mandate in September 2017 (also called dual credit policy), which aimed
to provide additional compliance flexibility to the fuel consumption regulation. The ruleestablishes dual credit targets of 10% of the conventional passenger vehicle market in 2019
and 12% in 2020. Each NEV sold generates a certain number of credits, depending on
characteristics such as electric range, energy efficiency, and rated power of fuel cellsystems. For subsidy programs, public heavy-duty EVs (i.e., electric urban buses), charging
infrastructure and hydrogen fuel cell vehicles (FCEVs) will remain as major concentrations of
incentive designs. 10 provinces and cities including Shanghai have launched policies toaccelerate the development of the FCEV industry. Domestic investment plans for hydrogenenergy industrial parks, FCEVs, and related material projects have exceeded 200 billion
RMB.
China launched several pilot programs to use ethanol as automotive fuel around the early
2000s. The total production has increased to approximately 2 million tonnes by 2012, whichbecame stable in the recent years. In September 2017, 17 central ministries, including the
National Development and Reform Commission and the National Energy Department, jointly
issued the “Implementation Plan for Expanding the Production of Biofuel Ethanol andPromoting the Use of Ethanol Gasoline for Vehicles”. The Plan required that all relevant
71units should develop grain fuel ethanol appropriately, control the total production
scientifically, and develop cellulosic fuel ethanol greatly to meet the growing market demand.
The promotion of ethanol blended gasoline fuels (E10) would begin with 11 trial provinces
and then roll out to the entire country. In the polluted North China Plain region, E10 gasoline
fuels have already penetrated the market in 2018. It is expected that E10 gasoline fuels will
be fully available nationwide around 2020. The market operation mechanism and theadvanced bio-liquid fuel innovation system have yet to be constructed. The 50,000-tonne
plant of cellulosic fuel ethanol will be demonstrated and operated. The advanced bio-liquid
fuel technology, equipment and industry will reach the leading international level and a more
complete market operation mechanism will be formed by 2025.
China still needs to overcome several challenges to further promote bio-ethanol fuels in the
future. First, the pricing mechanism was adjusted in 2018 by canceling the previous linkage
between ethanol and gasoline prices (0.9111 based on the gasoline price). After thisadjustment, the pricing of automotive ethanol is now greatly influenced by the oil refineryindustry. Second, the market supervision system should be improved. Otherwise, low-pricecoal-based ethanol products may enter the market. Furthermore, some consumers haveconcerns regarding the fuel economy and power performance of E10 fuels. More educationand engagement programs are required to encourage more consumers to choose ethanol
blended fuels.

Projections
The historical trends suggest a strong relationship between economic development andpassenger vehicle ownership density. The Gompertz function is applied to predict the future
stock of passenger car fleet in China using a fitting analysis based on its historical data(vehicle ownership density vs. GDP per capita). It is noted that China’s vehicle sales
numbers in 2018 and 2019 have not maintained high increases.
In the future low scenario, lower increase rates are proposed for the three developed regions(i.e., BTH, YRD and PRD) in eastern China. For vehicle categories other than passenger
cars, the vehicle population trends are predicted based on the average increases ofhistorical data. Thus, as Figure 30 indicates, the total vehicle population in China is expected
to increase to 307 million by 2030. For passenger vehicles, the ownership density is
estimated to be 190 vehicles per 1000 persons. To comply with stricter fuel consumption
standards and new energy vehicle mandates, the proportion of MPFI, GDI, HEV, BEV, and
PHEV are estimated to be 26%, 31%, 12%, 11%, and 9%, respectively. EVs (BEV and
PHEV) will account for about 20% of the total passenger car stock. Thus, by consideringreal-world fuel consumption (i.e., the road to lab gaps), it is estimated that the fleet-average72fuel consumption will decrease by more than 40% according to the fleet composition in 2030.
The total gasoline consumption for passenger vehicles in China is estimated to peak around2027. The estimated total gasoline consumption in 2030 could be lower by 5% to 10%
compared with the 2017 level.

Vehicle fleet size, millioin

400

Trucks
LDT
Van
Buses
Coaches
PHEV
BEV
HEV
GDI
MPFI

300

200

100

0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Figure 30: The prediction of future vehicle stock in China (low scenario)

Another scenario, the high scenario, presumes that the developed regions will maintainhigher increases in passenger vehicle fleet. This high scenario predicts that the total vehicle
population will increase to 376 million by 2030 (see Figure 31). Among them, passenger
vehicles would account for approximately 340 million, representing a national ownership
density of 230 vehicle per 1000 persons. In addition to these four-wheel vehicles,
approximately 120 million gasoline-powered motorcycles are registered in China. The future
population of motorcycles will be estimated stable compared to the current fleet size, as they
are being prohibited in many urban areas of China and have been replaced by electric twowheel vehicles.

73

Vehicle fleet size, millioin

400

Trucks
LDT
Van
Buses
Coaches
PC

300

200

100

0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Figure 31: The prediction of future vehicle stock in China (high scenario)

LDT: Light-duty trucks (gross vehicle weight below 4.5 tonne); Trucks: medium and heavyduty trucks (gross vehicle weight above 4.5 tonnes)

Figure 32: The future emission trends for on-road vehicles in China under three designed policy cases (note:emissions of gasoline-powered motorcycles included)

The future emission trends of major air pollutants are projected according to the two74

population scenarios and by using Tsinghua University’s EMBEV model (see Figure 32). The
EMBEV model was developed based on thousands of light-duty vehicles tested using
dynamometers and hundreds of light-duty vehicles, buses, trucks, and alternative fuelvehicles tested on road using PEMS. The Ministry of Ecological Environment released its
first version of national emission inventory guidebook for on-road vehicles, which issubstantially based on the archetype EMBEV model. The NAP case indicates that future
vehicle population will follow the high scenario trend, and no additional control policies will
be implemented after 2017. The PC[1] case indicates that stringent emission standards will
be implemented but no electric vehicles will penetrate under the high scenario population
trend. The PC[2] case indicates that both stringent emission standards and fleet
electrification will take effect for the low scenario population scenario, which could be
regarded as the most plausible case among the three cases. The results of PC[2] case showthat the total on-road emissions HC, CO, NOX and PM2.5 in 2030 could be reduced byapproximately 57%, 71%, 67% and 84%, respectively, (the PC[2] scenario) relative to 2013.
In the PC[2] scenario the total vehicle emissions of HC and CO are further reduced
compared with those under the PC[1] scenario due to lower population of passenger
vehicles and substantial penetration of new energy vehicles. The vehicle emissions of HC
would decrease to 1.78 Mt by 2030, representing an overall emission density of 0.18 t/km2,
which is lower than the United States level at 2011. Although the decrease during 2020 to2030 is less rapid than that during 2010 to 2020, the further emission controls contained by
the PC[2] scenario can continuously achieve HC emission mitigations with no stagnancy.
Although the marginal benefits of tightening the PC[1] to the PC[2] in mitigating NO X andPM2.5 emissions are not as significant as HC emissions, however, a considerable amount of
NOX and diesel particulate matter will be eliminated in urban areas.

75

JapanKey facts for Japan
Total fuel consumption of the road transport sector:
646,030 ktoe, of which 13,067 ktoe are renewable in FY 2018*
Number of vehicles in use:
77,767,606, of which 117,822 are alternative fuel vehicles (incl. electric vehicles) in FY
2017**
Current GHG emissions from the road transport sector:
213,184 ktCO2eq in FY 2017***
The energy consumption of the road transport sector in Japan is projected to decrease
due to measures to promote the introduction of next-generation vehicles and improve
traffic systems.
The target is to reduce GHG emissions from the transport sector by 32.1% compared to2005 by 2030****.
Measures to achieve this target include mainly GHG emissions will be reduced byapproximately 80% per vehicle compared to 2010. Furthermore, as the ultimate goal,with innovations in how vehicles are used (autonomous drive, connected, etc.) and incollaboration with the global efforts to achieve zero emissions from energy supply, Japan
will aim to realize Well-to-Wheel Zero Emission****.

*Total fuel consumption109, **Number of vehicles110, ***Current GHG emissions111, ****Target
GHG emissions and Measures112

109

Source: Portal Site of Official Statistics of Japan, https://www.e-stat.go.jp/stat-search/files?page=1&layout=dataset&toukei=00600370&kikan=00600&metadata=1&data=1 (in Japanese)
110

Source: Automobile Inspection & Registration Information Association, https://www.airia.or.jp/index.html(in Japanese), Next Generation Vehicle Promotion Center, http://www.cev-pc.or.jp/tokei/hanbai.html (inJapanese)
111

Source: Greenhouse Gas Inventory Office of Japan, http://www-gio.nies.go.jp/aboutghg/nir/nir.html

112

Source: Submission of Japan’s Intended Nationally Determind Contribution,

https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Japan%20First/20150717_Japan%27s%20IND
C.pdf

76

Energy supply and demand
Japan´s energy supply almost entirely depends on imported energy carriers. In fiscal year
(FY) 2018, the country imported 99.7% of its coal use, 97.5% of its LNG use and 99.3% of
its crude oil use.
As Figure 33 shows, total primary energy supply has peaked in 2005 at 22.90 EJ, and was
at 20.03 EJ in FY 2017. Of these, 87.7% were from fossil sources such as oil, coal andnatural gas, 1.2% was nuclear energy, 3.4% hydro and 7.7% other renewable energy.
(PJ)
25,000(Mtoe)
597

Renweable energy(w/o water)
Water
NuclearNatural gas
Coal
Oil

478

20,00015,91922,90621,99520,09920,01919,667

16,467

15,002
14,378358

15,00022,70921,993

12,41910,000
6,375

5,000

0
(FY)

Figure 33: Trends in composition of primary energy supply113.

Energy demand in the transport sector has already peaked in FY 2001 (see Figure 34), andwas at 3,099 PJ in FY 2017. Gasoline provides 54.4% of transport energy, followed by diesel
with 31.7%. There is a small share of electricity of 2.0%, and only 1.5% biofuels (countable
number as ETBE mixed into gasoline from the public statistical data.
ETBE derived from bioethanol is included in gasoline though it is not described on the
picture. Bio-diesel such as FAME is not included in this source because it’s statistically verysmall.

113

Converted from Japanese into English by LEVO, units added (toe). Source: METI (Ministry of Economy, Tradeand Industry), https://www.enecho.meti.go.jp/en/category/whitepaper/,https://www.enecho.meti.go.jp/about/whitepaper/2019pdf/ (Japanese),https://www.enecho.meti.go.jp/en/category/brochures/pdf/japan_energy_2018.pdf

77Figure 34: Trends in energy consumption in the transport sector114.

Installed biofuel production capacities are listed in Table 8.
Table 8: Biofuel installed production capacity (ML/year)115.
Year

FAME
Biodiesel

Ethanol

Cellulosic
ethanol
1.4

Biogas astransportation
fuel-

Renewablediesel(from lipids)
-

2010

-

31.75

2011

-

31.75

1.4

-

-

2012

-

32.75

1.4

-

-

2013

-

32.75

1.4

-

-

2014

-

32.75

1.4

-

-

2015

-

32.75

1.4

-

-

2016

-

2

1.4

-

-

2017

-

2

1.6

-

-

114

Converted from Japanese into English by LEVO, units added (toe). Source: METI,

https://www.enecho.meti.go.jp/en/category/whitepaper/,https://www.enecho.meti.go.jp/about/whitepaper/2019pdf/ (Japanese)
115

Source: Implementation Agendas - 2018 Update: A review of key biofuel producing countries, IEA Bioenergy

Task 3978

Raw materials for ethanol are mainly wood, lumber waste and molasses. Ethanol decreased
from 2016, as some ethanol developments and demonstrations were terminated by 2015.
Table 9: Summary of the transport fuel consumption (ML)116

Year

Gasoline

Dieselfuels

Aviation
fuel

Biodiesel *Ethanol **Marketshare(%)
of biofuels ***2010

52,964

27,186

7,925

9

386

0.7

2011

53,26625,990

7,623

9

359

0.7

2012

54,43925,904

8,040

8

365

0.7

2013

53,68925,681

8,572

10

440

0.8

2014

52,192

25,685

9,150

15

539

1.0

2015

51,502

25,679

9,494

15

700

1.4

2016

51,35425,455

9,909

-

786

1.5

* Based on an inquiring survey replied, thus it could be practically 20-25ML/year** Based on 1G bioethanol.
*** Market share of biofuels in the total transport fuel consumption. Bioethanol in Gasoline(Biodiesel in Diesel: <0.1%)
Most of the “ethanol” is imported ethanol. Raw materials for biodiesel are mainly surplus rice,wheat and waste vegetable oil. In Japan, the concentration of ethanol that can be mixed withgasoline is 3% (E3), and the concentration of biodiesel that can be mixed with diesel is 5%(B5) or 100% (B100).

Targets for emission reductions in road transport
Japan has committed to reduce its GHG emissions from energy provision from 1,219 million
tonnes of CO2 equivalent in 2005 to 927 in 2030. The transport sector currently produces
225 million tCO2eq (FY 2013), and this number shall be reduced to 163 by 2030. This is areduction of 27%.

116

Source: Implementation Agendas - 2018 Update: A review of key biofuel producing countries, IEA Bioenergy

Task 39

79

Table 10: Estimated emissions of energy-originated CO2 in each sector (Japan´s Intended Nationally Determined
Contribution (INDC))117

CO2 from energy provision[million t CO2]

FY 2005

FY 2013

FY 2030 (estimated)Industry

457

429

401

Commercial and other

239

279

168

Residential

180

201

122

Transport

240

225

163

Energy conversion

104

101

73

1,219

1,235

927

Total

Measures to promote reduced CO2 emissions from road transport
As stated in the document Submission of Japan´s Intended Nationally Determined
Contribution towards post-2020118, the following main policies and measures in the transport
sector are expected to be implemented for the reduction of GHG emissions:•Improvement of fuel efficiency•

Promotion of next-generation automobiles•

Other measures in the transport sector (traffic flow improvement, promotion of public
transport, modal shift to railway, comprehensive measure for eco-friendly shiptransportation, reduction of land transportation distance by selecting nearest port,
comprehensive low-carbonization at ports, optimization of truck transport, energy
consumption efficiency improvement of railways, energy consumption efficiency
improvement of aviation, accelerated promotion of energy saving ships, making
vehicle transport business more eco-friendly by eco-driving, promotion of collective
shipment, promotion of Intelligent Transport Systems ITS (centralized control of
traffic signals), development of traffic safety facilities (improvement of traffic signals,
and promotion of the use of LED traffic lights), promotion of automatic driving, ecodriving and car sharing)

One of government's policy measures is new fuel efficiency standards formulated in 2019.
The targets for each passenger car and truck will apply from 2025 and 2030. The

117

Source: MOFA (Ministry of Foreign Affairs of Japan), https://www.mofa.go.jp/mofaj/files/000090898.pdf

118

MOFA, https://www.mofa.go.jp/mofaj/files/000090898.pdf

80

government has also carried out some subsidy measures. For example, to promote nextgeneration vehicles, the government subsidies half of the price difference between
conventional and next-generation vehicles.
Table 11: Major examples of government policy measures119

Policy measures2018
subsidy(M$)

New fuel efficiency standards were formulated in 2019-

(FY 2030 target for passenger car was raised by 32.4% (25.4km/L)
compared to FY 2016 sales performance. FY 2025 target for trucks wasraised by approximately 13.4% compared to FY 2015 target.)
The tax exemption program for the low emission or fuel efficiency vehicles-

Subsidy measures to promote the dissemination of clean energy vehicles

125

Subsidy measures to promote the dissemination of clean diesel trucks

28.6

Subsidy measures to promote the dissemination of energy saving system
for trucks and ships

58.2

Projections
The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has committed to a widearray of policy development initiatives for achieving the mid-term objective based on thisplan, including making housing and buildings more energy efficient, measures for individualvehicles, and the promotion of low-carbon urban development. In addition, MLIT partiallyamended our Environmental Action Plan in March 2017, and set out long-term roles for the
MLIT in mitigation policies and other environmental policies.

119

Created by LEVO based on information from METI, https://www.enecho.meti.go.jp/en/,https://www.enecho.meti.go.jp/about/whitepaper/2019pdf/ (Japanese)81

Figure 35: Examples of MLIT efforts in the plan for global warming countermeasures120
Table 12: Dissemination targets for the next-generation passenger vehicles in 2030 sales and results in 2017121

2017 Results

2030 Targets

%

＃×10

％

Conventional vehicles

63.6

2,791

30～50

Next-generation vehicles

36.4

1,595

50～70

31.6

1,385

30～40

0.41/0.82

18/36

20～30

FCV

0.02

0.85

～3

Clean Diesel

3.5

155

5~10

HEV
EV/PHV

3

Table 12 shows a target for passenger cars in the dissemination of next-generation vehicles.
Commercial vehicles are not listed in the table. However, promotion of FCEV buses, CNG
trucks and so on are described in policy statements.
Planned further policy measures
On June 11, 2019, the government approved the “The Long-term Strategy as a growthstrategy based on the Paris Agreement”122. It is a long-term vision for the direction of policies

120

Source: MLIT, http://www.mlit.go.jp/common/001269888.pdf

121

Created by LEVO based on information from METI,

https://www.meti.go.jp/english/press/2018/0831_003.html,
https://www.meti.go.jp/press/2018/08/20180831007/20180831007-3.pdf (Japanese)122

MOE (Ministry of the environment), https://www.env.go.jp/en/headline/2406.html,

https://www.env.go.jp/press/802.pdf

82

and measures in the transport sector, and includes the main following main points:•

Challenging “Well-to-Wheel Zero Emission”•

Achieving the world’s highest level of environmental performance of Japanese cars
supplied worldwide by 2050•

Development and early utilization of biofuels and alternative fuels that can becommercialized and have the capacity for significant CO2 reduction.

•

Road/transport systems using big data and IoT

Currently, Japan is discussing the 6th basic energy plan for the summer of 2021. On
October 26, 2020, the Japanese prime minister declared that "Japan aims to realize acarbon-neutral society by 2050". It is expected that further measures will be considered forthe realization of a carbon-neutral society by 2050.

83Abbreviations
AER

all-electric range

ALIISA

Model used by VTT to calculate the future composition of vehicle fleets in this study

AMF

Advanced Motor Fuels

AQI

Air Quality Index

B5, B7,…

Diesel blends with x% FAMEBAUBusiness as usual

bbl

barrel

BEV

Battery electric vehicle

BTL

Biomass to Liquid

BTU

British thermal unit

CAFE

Corporate Average Fuel Economy, US regulation

CAGR

Compound annual growth rate

CBIO

Carbon Certificate, used in Brazilian regulation

CNG

Compressed natural gas

ct

cent

DBFZ

Deutsches Biomasseforschungszentrum gemeinnützige GmbH

DECA

Domestic emission control area

E5, E10,…

Gasoline blends with x% ethanol

ECA

Emission control area

EPA

US Environmental Protection Agency

EPE

Brazilian Energy Research Office

ESR

Effort Sharing Regulation

ETBE

Ethyl tert-butyl ether, ethanol-containing gasoline additive

EU

European Union

EUR

Euro

EV

Electric vehicle

FAME

Fatty acid methyl ester

FCEV

Fuel cell electric vehicle

FFV
FQD

Flex-fuel vehicle, capable of using either gasoline or high-blend ethanol (or pure hydrous
ethanol in the case of Brazil)
Fuel Quality Directive

FS

Future scenario

FYP

Five Year Plan, strategy document in China

84

FY

Fiscal Year

GDI

Gasoline direct injection

GDP

Gross domestic product

GHG

greenhouse gases

HC

Hydrocarbon emissions

HDT

Heavy duty truck

HDV

Heavy duty vehicles

HEFA

Hydrotreated esters and fatty acids

HEV

Hybrid electric vehicle

HVO

Hydrotreated vegetable oils

IEA

International Energy Agency

ILUC

Indirect land-use change

ILUC Directive

EU Directive including provisions on indirect land-use change

IMO

International Maritime Organization

INDC

Intended National Determined Contribution, refers to the Paris Agreement

ITSIntelligent Transport System

JRC

Joint Research Centre, linked to the European Comission

LCA

Life-cycle assessment

LCFS

Low-carbon Fuel Standard, Californian regulation

LDPV

Light duty passenger vehicles

LDT

Light duty truck

LDV

Light duty vehicles

LNG

Liquefied natural gas

LPG

Liquefied petroleum gas (auto gas)

MDT

Medium duty truckmill

millionMPFIMulti-point fuel injection

MTBE

Methyl tert-butyl ether, methanol-containing gasoline additive

Mtoe

million tonnes of oil equivalentMY

Model YearNAAQS

National ambient air quality standards, used in China

NDC

National Determined Contribution, refers to the Paris Agreement

NEDC

New European Driving Cycle, a standard for measuring vehicles' emissions of pollutants

85

NEV

New energy vehicle

OBM

On-board sensor-based emission monitoring

PC

Passenger cars

PEMS

Portable emissions measurement system

PFAD

Palm fatty acid distillate

PHEV

Plug-in hybrid electric vehicle

PN

Particle Number

PNPB

National Biodiesel Production Program, Brazilian regulation

PROCONVE

Motor Vehicle Air Pollution Control Program, Brazilian regulation

PTG

Power to Gas

PTLPower to Liquids

PTX

Power to X (X for different products), usual German definition for e-fuels

RED

Renewable Energy Directive, EU regulation

RED-II

Recast of the Renewable Energy Directive, EU regulation

RFS

Renewable Fuel Standard, US regulation

RIN

Renewable Identification Number, used in US regulation

RMB

Renminbi, Chinese currency

Rota 2030

Mobility and Logistics Program, Brazilian regulation

RS

Reference scenario

RVO

Renewable Volume Obligation, used in US regulation

SDG

Sustainable Development Goal

TCP

Technology Collaboration Programme (of the IEA)

tsd

thousandTTW CO2emissions
UCO

Tank-to-wheel CO2 emissions, i.e. tailpipe emissions

UCOME

used cooking oil methyl ester

UER

Upstream emission reduction

UFZ

Umweltforschungszentrum e.V.

USD

United States (of America) Dollar

WLTP

Worldwide Harmonised Light Vehicles Test Procedure, a standard for measuring vehicles'
emissions of pollutants
Well-to-tank CO2 emissions, i.e. upstream emissions from fuel or electricity production

WTT CO2emissionsWTW CO2emissionsused cooking oil

Well-to-wheel CO2 emissions, i.e. WTT and TTW combined86Appendix

87Translation of the Biofuels 2030 study
Nils-Olof Nylund

Introduction
The Finnish strategies for emission reductions in transport and the Finnish biofuels policy aredescribed in the chapter on Finland. The country assessment for biofuels in Finland is based ona study initiated by the Prime Minister’s Office in 2018, eventually leading to setting a new
biofuels mandate for Finland for the period 2021 - 2030.
Over the years, VTT Technical Research Centre of Finland Ltd and other actors have provided
information and policy support regarding energy, climate and biofuels in transport. In 20151 and20172, VTT published reports on how to reach a 40 % CO2 emission reduction in road transport
by 2030. In these reports, also the implications on the national economy of alternative strategies
to reduce CO2 from transport were assessed. One of the key findings was that in the case of
Finland, biofuels is a cost effective way to reduce emissions. It was pointed out that drop-in typebiofuels do not require new vehicles or modifications to the fuel supply system.
In Finland, the first biofuels obligation was set in 2008. The obligation was revised in 2010, witha target of 20 % biofuels (taking into account double counting) in 20203. The 2016 nationalenergy and climate strategy sets a target of a 50 % CO2 emission reduction in transport by
2030, compared to 2005. Increasing the physical share of biofuels (energy content) in roadtransport fuels to 30 % by 2030 is also mentioned in the strategy.
In 2018, in preparation for the update of the biofuels mandate for 2021 to 2030, the Prime
Minister’s Office (PM Juha Sipilä) launched a tender for a study with the title “Cost effective
pathways of biofuels until 2030”. A consortium led by Pöyry Management Consulting Ltd won
the tender. The other partners were VATT Institute for Economic Research and TEC
TransEnergy Consulting Ltd. The final report of the study was published in early October 20184(“Biofuels 2030”). The study confirmed the definition of policy set in the 2016 national energy
and climate strategy; Finland will need some 30 % liquid biofuels in 2030 to meet a 50 %emission reduction target in road transport.

1

http://www.transsmart.fi/files/297/Tieliikenteen_40_hiilidioksidipaastojen_vahentaminen_vuoteen_2030_Kaytto

voimavaihtoehdot_ja_niiden_kansantaloudelliset_vaikutukset._VTT-R-00752-15.pdf
2

http://www.transsmart.fi/files/430/Tieliikenteen_40_hiilidioksidipaastojen_vahentaminen_vuoteen_2030_Vuoden_2016_paivitys_VTT-R-00741-17.pdf
3

Saarinen, J. (2013). The Finnish Biofuel Policy. CEN/TC 19 Conference. Helsinki, 27 May 2013.

4

http://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/161074/63-2018-

Biopolttoaineiden_kustannustehokkaat_toteutuspolut_vuoteen_2030_.pdf?sequence=1&isAllowed=yThe study resulted in a proposition by the Government to the Parliament on the update of the
biofuels mandate already within the month of October. The new biofuels obligation law was
finally approved in March 20195.
Key points are:•total 30 % share (energy) of biofuels in road transport in 2029and onwardso•increasing linearly from 18 % (physical) in 2021 to 30 % in 2029

sub target of 10 % advanced biofuels in road transport in 2030 and onwardsostarting at 2 % in 2021 - 2023

ofeedstocks according to Annex IX A of the RED II Directive6

The new 10 % biocomponent obligation for light fuel oil in 2030 is written in a separate law7.

5

Saarinen, J. (2013). The Finnish Biofuel Policy. CEN/TC 19 Conference. Helsinki, 27 May 2013.

6https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018L2001&from=EN7

https://www.finlex.fi/fi/laki/alkup/2019/20190418

The assessment
GeneralThe 2018 study on biofuels launched by the Prime Minister’s (Juha Sipilä) Office and executedby the consortium led by Pöyry Management Consulting basically followed the directions set up
in the 2016 national energy and climate strategy. The study, preparing for the update of theFinnish biofuels obligation demonstrated what amounts of biofuels would be needed inalternative 2030 scenarios to reach the overall CO2 reduction target in road transport, -50 %compared to the year 2005. The study also assessed future availability and costs of biofuels. It
was concluded that the current and expected Finnish biofuels production capacity would be
sufficient for a 30 % share of biofuels in road transport by 2030, but that the production would
be primarily based on imported feedstocks. The 30 % share of biofuels, in combination withimprovements in energy efficiency and introduction of electric vehicles, would deliver thetargeted 50 % reduction in CO2 emissions. The cost impacts were estimated to be moderate,
mainly in the range of 0.3 to 1 %, depending on the sector of the economy.
Figure 1 shows the basic elements of the study. The assessment at hand concentrates ondetermining the amounts of biofuels needed in road transport.

Figure 1. The basic elements of the “Biofuels 2030” study.

Starting values
LIPASTO is a calculation system developed and maintained by VTT8. It is used to calculatetransport emissions and energy consumption in Finland, covering road, rail, waterborne and airtransport as well as working machines. The official Finnish transport emission inventories are
based on the LIPASTO system. The sub models for road transport are called LIISA (emission
inventory) and ALIISA. ALIISA is the vehicle fleet sub model producing vehicle fleet data for the
LIISA model. The models are also used to produce energy and emission into the future.
The starting point for the calculations of biofuel volumes in 2030 was the so-called ALIISA 2016“business as usual” baseline9, sanctioned by the Ministry of Transport and Communications.
The main assumptions for road transport in 2030 are (see also “Country report - Finland):••total energy use: 3,420 ktoeofossil liquid fuels 2,904 ktoe (84.9 %)oliquid biofuels 462 ktoe (13.5 %)onatural gas 8 ktoe (0.2 %)obiogas 8 ktoe (0.2 %)oelectricity 37 ktoe/427 GWh (1.1 %)passenger car stock: ~3 million unitsoelectric passenger car stock (PHEVs + BEVs): 120,000 units

8 http://lipasto.vtt.fi/en/index.htm
9 http://lipasto.vtt.fi/aliisa/aliisa_tulokset.htm

The projections for 2030
Key modelling assumptions for the Biofuels 2030 Study•

The 2030 baseline scenario created earlier for the Ministry of Transport andCommunications was used as a starting point, a scenario which encompasses
moderate improvements in vehicle energy efficiency, 13.5 % liquid biofuels and amoderate penetration of EVs, but no additional policy measures.

•

For the “Biofuels 2030” study, a slightly modified 2030 reference case was formed byremoving all biofuels and all electric vehicles (a zero renewables baseline).

•

Based on this zero renewables reference, two different pathways were created, onewith no additional improvements in energy efficiency and one with successful energy
efficiency measures throughout the system.

•

For both pathways, EVs were then added (0, 120,000, 250,000, 600,000 by 2030).

•

Then for each combination, biofuels were added to reach the required CO2
reductions.

•
For the “Biofuels 2030” study, a slightly modified 2030 reference was created (including•intermediate points for 2020 and 2025). This was done by eliminating all biofuels and electricity,•
to demonstrate
the situation without any renewable or carbon neutral energy carriers. With this“electric
vehicles”
arrangement,
addingeither biofuels or electricity became a more straight forward procedure
basically• starting from a clean table.
For energy efficiency, two separate scenarios were evaluated, one according to the ALIISA
baseline scenario without any dramatic improvements in energy efficiency, and one scenario
with improvements throughout the whole transport system, according to the 2016 energy andclimate strategy, and resulting in a 1.6 Mt reduction in CO2 emissions in 2030. The emission
reductions stem from improved vehicle efficiency (other than energy efficiency improvements
through electrification) but also from improved logistics and increased use of public transport.
It should be noted that economic growth normally increases transport work. Therefore, progressin energy efficiency could easily be mitigated by increased transport work in 2030.
Table 1 presents total energy use and CO2 emissions for road transport without any biofuels orelectricity in 2005 (reference year) and in 2030 (two different cases for energy efficiency).
Without significant improvements in energy efficiency, carbon neutral energy has to bring about

an additional reduction of 42 % to reach an overall reduction of 50 %, in the case of improved
efficiency the figure is 28 %. In calculating the CO2 inventory of transport, the end use of
biofuels, electricity and hydrogen is considered carbon neutral.
Table 1. Total energy use and CO2 emissions for road transport with no renewable or carbon neutral energy.

2005

2030 baseline

2030 energy
efficiency

Road transport energy(ktoe)

3780

3485

2963

Road transport CO2 (Mt)

11.7

10.7

9.1

-8

-22

CO2 relative to 2005 (%)

Figure 2 describes the setup of the different scenarios, the variables being:•

CO2 emission reduction target for transporto-50 % as set by the 2016 national energy and climate strategyo-39 % being the overall emission reduction target for Finland in the non-emission
trading sector (European effort sharing)•two different pathways for energy efficiencyobaseline pathway with no significant improvements in energy efficiencyopositive development in energy efficiency in line with the 2016 energy andclimate strategy•

number of EVs in the fleet in 2030
o0…600,000 units (mainly passenger cars but also some commercial vehicles)o

ALIISA baseline projection 120,000onumber according to the 2016 energy and climate strategy 250,000o

600,000 representing a “high scenario” meaning a 20 % of the passenger car
fleet in 2030

Figure 2. Evaluated scenarios, main variables are CO2 reduction target, energy efficiency and number of electricvehicles.

The following parameters were treated as fixed:•

the number or vehicles in 2030 (ALIISA 2016)•

the transport work in 2030 (ALIISA 2016)•

the number of gas fuelled vehicles (50,000 passenger cars and some commercial
vehicles)o•2016 national energy and climate strategy

the amount of biogas used in road transport in 2030 (44 ktoe)o2016 national energy and climate strategy

Impact of electric vehicles
As electric vehicles are more energy efficient than internal combustion engines equipped
vehicles, total energy demand goes down as the number of electric vehicles goes up. In thecalculations, it is assumed that one energy unit of electricity replaces 2.8 units of fuels.
The calculations of total energy use are based on the Finnish average annual driving distance of
17,000 km for passenger cars, which is some 45 km/day. This can be reached both with battery
electric vehicles and plug-in hybrids running on electricity only, so to streamline the calculations,these vehicle categories are grouped together as “electric vehicles”.
Figure 3 shows the different trajectories for the growth of the EV passenger car fleet towards

2030. The market shares of EVs start at very low levels. To reach 600,000 EVs in 2030, themarket share of EVs would have to be some 70 % in 2030, whereas the 120,000 units
mentioned in the ALIISA baseline scenario would require a modest market share of 13 % in
2030.

Figure 3. Trajectories for EV fleet growth with market shares in 2020 and 2030.

The calculations assume use of electricity also in other vehicle categories than just passenger
cars, that is e.g., delivery vehicles and city buses. For the scenario of 600,000 electricpassenger cars, it is assumed that the passenger cars use some 185 ktoe of electricity and theother vehicle categories 20 ktoe, totalling 205 ktoe of electricity and some 90 % of the electricity
used in passenger cars.
Figure 4 shows the effects of electrification on total energy demand and fuel replacement in thecase of the energy efficient transport system.

Effect of EVs on total energy
Energy efficient pathway
3500
3000

ktoe

2500
2000
1500
1000
500
0
0

12000025000060000

Number of EVs
Electricity

Fuel replaced

Total energy

Figure 4. The effects of electrification on total energy demand and fuel replaced, calculated for the energy efficienttransport system pathway.

Figure 5 shows the levels of CO2 reductions (relative to 2005) that can be reached withelectrification only. Values are presented for the “baseline” efficiency case and the case of
improved transport system efficiency.
The combination of a highly efficient transport system and a high number of EVs could
according to this calculation delivers a CO2 reduction of 37 % relative to the year 2005, close to
the non-ETS effort sharing for Finland (-39 %) but still less than the 50 % reduction called for in
the 2016 national energy and climate strategy. This, however, on condition that transport work
does not increase significantly.

CO2 reductions through electrification
0%
-5 %

0

120000250000600000

-10 %
-15 %

-20 %
-25 %

-30 %
-35 %
-40 %

Number of EVs
Baseline

EfficientFigure 5. Levels of CO2 reductions (relative to 2005) that can be reached with electrification only.

The need for biofuels
As stated in Figure 2, the basic outcome of the calculations is the amount of biofuels needed toreach a 39 or 50 % reduction in road transport CO2 emissions as a function of energy efficiency
and the number of electric vehicles.
The calculations were carried out for three different years, 2020, 2025 and 2030, presuming that
the CO2 emission reductions should be linear between 2005 (reference year) and 2030 (target
year).
Results are presented in Figures 6 (2020), 7 (2025) and 8 (2030). Figure 9 summarises theneed for liquid biofuels aiming for a 50 % CO2 reduction in an energy efficient transport system,as defined by the 2016 national energy and climate strategy. For this case the number of EVs
is varied between 120,000 (ALIISA projection) and 600,000.
In all cases, the amount of biogas is fixed at a modest 44 ktoe in 2030. In Finland, biogas is
exempted from energy taxes, and can therefore not be included in the biofuels mandate, whichconsequently only covers liquid biofuels. Anyhow, for the CO2 inventories, it is insignificant
whether the biofuel is in liquid or gaseous form. Higher amounts of biogas would lower the needfor liquid biocomponents and vice versa. However, the division between liquid and gaseous
biofuels has an impact on costs, as the use of gas (methane) requires dedicated vehicles aswell as dedicated refuelling facilities.

Need for liquid biofuels in 2020
1600
1400
1200

ktoe

1000
800
600

400
200
0
0

120000250000600000

Number of EVs in 2030
-50% CO2-39% CO2-50% efficient system-39% efficient system

Figure 6. The need for liquid biofuels in 2020.

Need for liquid biofuels in 2025
1600
1400
1200

ktoe

1000
800
600

400
200
0
0

120000250000600000

Number of EVs in 2030
-50% CO2 base

-39% CO2 base

-50% efficient system-39% efficient system

Figure 7. The need for liquid biofuels in 2025.

Need for liquid biofuels in 2030
1600
1400
1200

ktoe

1000
800

600
400
200
0

0

120000250000600000

Number of EVs 2030
-50% CO2 base

-39% CO2 base

-50% efficient system

Figure 8. The need for liquid biofuels in 2030.

-39% efficient system

Need for liquid biofuels

ktoeEnergy efficient system, -50 % CO2 by 2030
1000
900
800
700
600
500
400
300
200
100
0

911
849

799

799
648

511

498

455

440

2020

2025

2030

Number of EVs in 2030
120000250000600000Figure 9. The need for liquid biofuels in an energy efficient transport system.

In 2030, the need for liquid biofuels varies between some 1500 ktoe (50 % CO2 reduction,baseline energy efficiency, zero EVs) and 20 ktoe (39 % CO2 reduction, energy efficient system,
600,000 EVs).
If a 50 % reduction in CO2 emissions by 2030 is required, and the energy efficiency measures
are successful, the amount of liquid biofuels in the time period 2020 to 2030 varies between
some 450 and 900 ktoe/a.
In line with the 2016 national energy and climate strategy, with successful energy efficiency
measures and with the trajectory to 250,000 EVs in 2030 (some 8 % of the total passenger car
population and some 30 % of new car sales in 2030) the need for liquid biofuels is 800 ktoe/aboth in 2025 and 2030. The reason for this is that sales of EVs are expected to really pick up
after 2025 and that the impact of EVs is still rather small in 2025. For this pathway, the share ofliquid biofuels of the total amount of actual fuels is 14 % in 2020, 25 % in 2025 and 29 % in
2030.

In 2030, with success in energy efficiency and 250,000 EVs, the fuel mix would be as follows:•

fossil petrol 666 ktoe•

fossil diesel 1,238 ktoe•

ethanol 80 ktoe (assumption all petrol E15)•

renewable diesel 719 ktoe•

biogas 44 ktoe•

electricity 77 ktoe•

total 2825 ktoe

Electrification will mainly replace petrol. As there is a blending wall for adding ethanol to petrol(the assumption is that all petrol is E15) and as FFV vehicles have practically disappeared fromthe market, the sink for ethanol in 2030 will be low, only some 80 ktoe, if no new technologies toutilise ethanol are introduced. This means that the major part of the biofuels in 2030, some 90%, has to be drop-in type renewable diesel, unless new ethanol sinks or new renewablecomponents for petrol can be found. The use of FAME (conventional biodiesel) as a blending
component is considered challenging in the Finnish climate with severe winter conditions.
Increasing the use of biogas significantly both in passenger cars and in heavy-duty vehicles
would reduce the need and pressure for renewable diesel.

Advanced biofuels
In preparation for the upcoming mandate, three different options for advanced biofuels within
the mandate were evaluated, namely 3.5 % (minimum RED II subtarget), 10 % and 15 %(Figure 10). The thinking was that the higher the subtarget for advanced biofuels is, the higher
the contribution from indigenous biofuels will be.

Figure 10. Alternative subtargets for advanced biofuels.

Main conclusions of the “Biofuels 2030” study
The main conclusions of the study can be summarised as follows (with comments):•

Finland can reach a 50 % emission reduction by 2030 with a combination of improved
energy efficiency, 30 % liquid biofuels (800 ktoe), 25, 000 EVs and 50,000 biogas
vehiclesoconfirmation of the definition of policy set in the 2016 national energy and climate
strategyo•mandate set at 30 % (actual) for 2030

The current and planned indigenous production capacity would be sufficient for a 30 %share of liquid biofuels, but the production would for the greater part be based on
imported feedstockoa separate subtarget of 10 % advanced biofuels to speed up development ofindigenous biofuels based on, e.g., lignocellulosic feedstocks•

The effect of the new biofuel mandate on pump prices (with tax) is estimated to be +5 %on an average (-3…+14 %), which with current prices and taxation system would mean
+7 cnt/l (relative to the current mandate of 20 % with double counting)ofluctuations in current daily pump prices of fuels can easily be +5 cnt/l, so theimpact can be considered to be relatively marginal•

The cost increase for the various business sectors and the end-users induced by the
new mandate would, on an average, be moderate•

The effects of the new mandate on the state economy is limited as well, as the effect on
tax revenues is estimated to be less than 0.3 %, while increase in VAT compensates for
reduced fuel taxesowith the current tax system (energy and vehicle taxes) a drop in tax revenues will
be an issue when moving towards electrification of vehicles