Biofuel

1. Biofuel National and EU policy and processes Senior adviser Anne H. Johannessen, Department for Pollution Control. 04 November 2008.

2. Biofuels • National policy and processes • Proposal for a national biofuel obligation for road transport • Sustainability • R&D for 2.generation biofuels • EU processes • Proposal for a directive on the promotion of the use of energy from renewable sources (renewables directive), including a scheme for sustainable biofuels • Norwegian position on sustainability and transport

3. National policy and processes • Government policy on biofuels first presented in Revised National Budget 2007 • Elaborated in White Paper to the Parliament on Norwegian Climate Policy, June 2007 • Main points: • Proposal for a National Biofuels Obligation, setting a minimum requirement for the share of biofuels in total fuel consumption for road transport • Sustainable production and import of biofuels • R&D for second-generation biofuels

4. … National policy and processes • Proposal for a National Biofuels Obligation, setting a minimum requirement for the share of biofuels in total fuel consumption for road transport • Original proposal: 2% share in 2008, rising to 5% share in 2009 and onwards (% by volume) • Has been through a public hearing process • In parallel with the proposed biofuels obligation, a proposal for minimum reporting requirements for the biofuels

5. … National policy and processes • Proposal for a National Biofuels Obligation… • Norwegian Pollution Control Authority (gov’t agency) – evaluation of hearing process and recommendation: step-by-step approach, introduction of sustainability criteria as in coming EU system • Is at present under consideration in the Ministry/Government • Other political parties also involved (Climate agreement parties (klimaforliket))

6. … National policy and processes • Sustainable production and import of biofuels • Strong emphasis on the importance of sustainability of biofuels, both for imports and domestic production, and for both first- and second-generation biofuels • Recommendation from the Pollution Control Authority to set reporting requirements as a minimum, and develop further sustainability criteria over time (EU) • Focus on international processes, particularly EU • Norwegian position puts sustainability as top priority

7. … National policy and processes • R&D for second-generation biofuels • Cross-cutting political agreement on developing a strategy for increased R&D for 2.gen.biofuels • 2. gen. biofuels in general expected to have less adverse environmental and social effects • Sustainability still important • Strategy expected 2009

8. Other national measures • Economic measures • Biofuels are exempt from CO2 tax • High-blend biodiesel is exempt from the auto diesel tax and high-blend bioethanol is exempt from the petrol tax (both by definition) • Low-blend biodiesel is also exempt from the auto diesel tax for the biodiesel share in the blend

9. EU processes – Commission proposal • Proposed Directive on the promotion of the use of energy from renewable sources - COM 2008/19 (Renewables directive) (http://ec.europa.eu/prelex/detail_dossier_real.cfm?CL=en&DosId=196665) • Commission proposal 23. January 2008 • Overall target of 20% renewable energy by 2020 • Sub-target of 10% renewable energy for transport by 2020 • Not only biofuels, but also other renewables • Sustainability criteria for biofuels and other bioliquids (“acceptance criteria”) + reporting requirements

10. … Commission proposal • Environmental sustainability criteria for biofuels and other bioliquids • Requirements to be taken into account for: • Compliance with Directive targets • Compliance with (national) renewable energy obligations • Eligibility for (national) financial support for biofuels and other bioliquids

11. … Commission proposal • Environmental sustainability criteria for biofuels and other bioliquids • Greenhouse gas savings of at least 35% compared to fossil fuel comparators • Not made from raw materials obtained from land with recognised high biodiversity value (some exceptions) • Not made from raw materials obtained from land with high carbon stock (some exceptions) • Reporting requirements at national and EU level on other environmental and social factors

12. Norwegian position • Formal Norwegian position to the Commission proposal, 7 May 2008 (http://www.regjeringen.no/nb/dep/md/pressesenter/pressemeldinger/2008/norge-stotter-eus-arbeid-med-a-fremme-ba.html?id=510491) • Main points: • Strong support for establishment of sustainability criteria and an international sustainability scheme • Prevent production and use of biofuels with negative environmental and social impacts, and promotion of best biofuels • Promote sustainability • Sizeable GHG savings in a life-cycle perspective • Displacement effects (indirect effects) must be addressed

13. Norwegian position • … Main points: • Primary objective is reduction of GHG emissions without negative side effects • Should include criteria for social dimensions • Should include criteria for broader environmental effects such as water use, pollution and pesticides • Default values for GHG emissions should be on the conservative side, to promote actual data

14. Norwegian position • … Main points: • Equitable, transparent and robust • Both domestic and imports • Both 1. gen. and 2. gen. • Differentiation amongst those acceptable • More technologically neutral approach, with clearer emphasis on renewable energy for electric vehicles, hybrid plug-ins, hydrogen … • Potential for cellulosic feedstock sourced from forest and grassland, provided that harvesting is sustainable, including displacement effects

15. EU processes – EP committees • EP committee processes • Renewables directive proposal has been through process mainly in two committees – environment (ENVI) and energy (ITRE) • ENVI focussing primarily on renewable energy in transport and sustainability issues for biofuels/bioenergy (ENVI final position 15. July) • ITRE has responsibility for the directive as a whole

16. ITRE report • ITRE report (final) voted on 11/9, passed with solid majority. Many of ENVIs recommendations followed up. • Transport goal 5% in 2015 (1/5 from “other”) and 10% in 2020 (2/5 from “other) and revision in 2014 • “Other”: electricity or hydrogen from renewable sources, energy from waste, residues and ligno-cellulosic biomass or algae produced in vats, or energy from feedstock grown on degraded land with a net carbon benefit regarding land use emissions over 10 years. • 20% increase in energy efficiency in transport in 2020

17. … ITRE report • Criteria for other environmental factors (water, air pollution, soil quality, agrochemicals) • Specific social criteria (i.e. land use rights, worker rights, health and safety) • Criteria to ensure compliance with CITES, CBD, Cartagena Protocol, Kyoto Protocol • Indirect land use effects to be addressed • Greenhouse gas savings 45%, and 60% from 2015 • More specifics re. criteria for feedstock sourced from areas with high biodiversity value or high carbon stock • Criteria – mostly for all biomass for energy

18. Further EU process • At present: Trilogue meetings • Aiming at final agreement by beginning/middle of December • Finalised at latest spring 2009

19. Other information and links • The Government of Norway’s International Climate and Forest Initiative (klima- og skogprosjektet) : • http://www.regjeringen.no/upload/MD/Vedlegg/Klima/klima_skogprosjektet/faktaark_regnskog.pdf and • http://www.regjeringen.no/nb/dep/md/tema/klima/regjeringens-klima--og-skogprosjekt-er-i.html?id=526489 (both in Norwegian) • http://www.regjeringen.no/en/dep/md/Selected-topics/klima/why-a-climate-and-forest-initiative.html?id=526489(in English) • Information Office for Private Sector Development: • http:/www.norfund.no (in English) • http://www.veiledningskontoret.no (in Norwegian)