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New: Position paper on EU Clean Industrial Deal & Affordable Energy Plan

Eurofuel, the European Liquid Heating Fuels Association, welcomes the launch of the Clean Industrial Deal and the Action Plan for Affordable Energy as a path towards a sustainable and competitive energy future, setting ambitious targets for reducing emissions. While these strategies emphasise the significance of electrification and hydrogen, they may neglect a crucial aspect of a truly inclusive energy transition: low-carbon renewable liquid fuels.

Eurofuel believes that these fuels offer an immediate, cost-effective, and practical solution to decarbonisation—one that complements existing energy policies while addressing the diverse needs of European consumers and businesses. By recognising the value of renewable liquid fuels, the EU can ensure a balanced approach that delivers both environmental and economic benefits without imposing unnecessary burdens on consumers.

The need for a technology-neutral approach

A cornerstone of the Clean Industrial Deal is the principle of technology neutrality. However, in practice, the policy framework continues to lean heavily towards electrification and hydrogen, leaving liquid fuels at risk of being marginalised. This imbalance not only undermines the potential of renewable liquid fuels but also contradicts the broader goal of fostering an inclusive and flexible energy system.

Low-carbon liquid fuels, including biofuels, e-fuels, and synthetic fuels, offer a ready-to-deploy solution for reducing emissions, particularly in hard-to-electrify sectors such as heating. Unlike the extensive infrastructure changes required for electricity and hydrogen, renewable liquid fuels can be seamlessly integrated into existing heating systems, making them an efficient and cost-effective tool for decarbonisation.

Affordable energy for consumers and industry

Eurofuel acknowledges that the EU’s Action Plan for Affordable Energy focuses on reducing energy costs and improving security of supply. However, its approach relies heavily on electrification while simultaneously proposing higher taxation on conventional fuels. This would penalise consumers and businesses that rely on liquid heating fuels, particularly in rural and off-grid areas where alternatives are less viable.

Eurofuel believes renewable liquid fuels can be deployed with minimal disruption, offering a practical pathway to decarbonisation without imposing costly infrastructure upgrades or forcing consumers into expensive conversions. To achieve a fair transition, tax structures and incentive schemes must reflect the full range of low-carbon solutions, including renewable liquid fuels.

Addressing regulatory disparity

While the EU has taken steps to permit processes for renewable electricity and hydrogen projects, similar efforts have yet to be made for low-carbon liquid fuels. This disparity creates an uneven playing field and hinders the potential of renewable fuels to contribute to Europe’s energy transition.

Eurofuel urges policymakers to create regulatory parity, ensuring that all low-carbon technologies receive equal consideration and support. Simplifying approval processes for renewable liquid fuels will enable faster deployment and broader adoption, reinforcing Europe’s commitment to an inclusive energy future.

Strengthening energy security with European supply chains

The EU aims to reduce dependence on imported fossil fuels, yet it has not fully leveraged the potential of domestic renewable liquid fuel production. Incentivising the development of locally sourced biofuels and synthetic fuels can help Europe strengthen its energy resilience and reduce exposure to global market volatility, and create economic opportunities in rural communities.

Policy recommendations

To achieve a balanced and effective energy transition, Eurofuel calls on EU policymakers to:

1. Acknowledge the role of low-carbon liquid fuels in Europe’s decarbonisation strategy and integrate them into relevant policies.
2. Ensure fair treatment of renewable liquid fuels by aligning tax incentives and permitting processes with those of renewable electricity and hydrogen.
3. Maintain affordable energy options for consumers and industry by avoiding tax structures that disproportionately impact liquid fuel users.
4. Support innovation and production of renewable liquid fuels within Europe to enhance energy security and economic resilience.

Conclusion

Eurofuel remains committed to collaborating with EU institutions, Member States, and industry partners to ensure that low-carbon liquid fuels receive the recognition they deserve in Europe’s energy transition. As Europe moves forward with the Clean Industrial Deal and the Action Plan for Affordable Energy, it is imperative to embrace a diverse energy mix. By fully integrating renewable liquid fuels into the EU’s strategy, policymakers can accelerate decarbonisation, enhance energy security, and protect consumers, paving the way for a cleaner and more resilient future.