Q&A: REA says UK transport plans lack ambition
London, 4 October (Argus) — UK renewable industry body REA's head of transport fuels Clare Wenner spoke to Argus about UK proposals for the Renewable Transport Fuel Obligation (RTFO), including provisions for the introduction of E10, a gasoline blend with a maximum 10pc share of ethanol.
Legislation to offer E10 in Europe has been in place since 2009. What do you see as the key inhibitors to a roll out and what might be learned from experience in countries such as Germany or Belgium?
The key inhibitor to the roll-out of E10 in the UK has been the lack of positive government support. As a consequence, although the EN228 fuel spec has been amended to accommodate E10 since January 2013, and the government's own Transport Energy Task Force and the House of Commons Energy Select Committee recommended its introduction, the fuel-supply industry has been reluctant to introduce a new fuel on the forecourt.
However, in his foreword to the government's response to the RTFO consultation earlier this year the transport minister Jesse Norman said: "The government will work with industry to facilitate any future introduction of E10 gasoline, playing our part to ensure that it is managed carefully." This is a very welcome development.
Learning from the experience of other countries, government support and a seamless co-operation with industry in the design and execution of a thorough and carefully planned consumer communications programme are the essential ingredients for a successful roll-out.
It was initially proposed that E10 would be rolled out in the UK in the autumn of 2017. Is this now feasible and, if not, when is the latest the blend should be made available to UK drivers?
It will not be possible to roll-out E10 in the autumn of 2017. The legislation increasing the overall use of renewable transport fuels, the RTFO, needs to be agreed by parliament and a thorough communications plan agreed by government and industry needs to be drawn up.
Realistically E10 should be rolled out no later than autumn 2018, at the same time as the new pump-labelling legislation comes into effect.
RTFO proposals discuss a central scenario of a "moderate E10 uptake". At what pace should the blend be introduced? Is there sufficient infrastructure to support even a moderate deployment?
The fuel supply industry has consistently argued that if E10 is to be introduced then the nature of the UK pipeline infrastructure would require a rapid roll-out.
The government has suggested the process is likely to be more gradual. In practice the current forecourt infrastructure will support 95E10 with the current 97E5 becoming the legacy grade.
How might the lack of a government mandate be overcome and what incentives can be offered to UK drivers to use E10? What are the risks associated with a market-led introduction?
The use of E10 is an attractive option already from a carbon-saving point of view. The progressive use of gasoline will also bring air-quality benefits with a dramatic reduction in NOx emissions.
The current increase in sales of gasoline and gasoline hybrids demonstrate consumers already understand these benefits. Further incentives could be given by a differential fuel duty, particularly one that takes into account the energy content of the bioethanol in E10.
The size of the UK renewable fuel market is determined by the level of the mandated obligation that fuel suppliers must reach. Suppliers can choose which renewable fuels to use to fulfil their obligation and will generally go for the option that keeps consumer costs down.
In these circumstances the risks are no greater or smaller than commercial risks in the normal course of business. The government has been particularly concerned about the greater use of crop-based biodiesel but this risk could be greatly minimised by the introduction of differential obligation rates for biodiesel and bioethanol.
What are the other avenues available to the department of transport to reduce greenhouse gas emissions in road transport, with a view to 2020 and 2032 targets? Are these targets feasible without E10?
The government's response to the RTFO consultation sets out a number of ways they hope transport can be decarbonised. These include encouraging a much greater use of wastes as renewable-fuel feedstocks for both liquid and gaseous fuels, and the inclusion of aviation in the overall RTFO obligation system.
The fuel options they set out are also complemented by their programme for the progressive electrification of road transport. The decarbonisation of both the electricity and the gas grid are an important feature of this programme.
The introduction of E10 is an integral part of the government's decarbonisation plans for road transport. The overall future of the liquid renewable-fuels sector, including E10, will depend on the speed of electrification roll-out and consumer acceptance of a different set of driving behaviours.
Given the proposed crop cap, how might the production of biofuels be incentivised in the UK, beyond the short term? Is there sufficient government support for second generation biofuels production?
The government's proposed changes to the RTFO set out increased incentives for the use of wastes as feedstocks, particularly for advanced renewable fuels. Their proposed development fuels sub-target with greatly increased support in the form of a very high buy-out price, makes it clear which fuels they are hoping to incentivise.
The availability of sufficient volumes of waste remains to be seen. The REA believes the government plans lack ambition and the volume of second-generation biofuels production will remain limited. Further support for commercialisation for new fuels to cross "the valley of death" is likely to be needed.