Newsletter 01.2019

Dear reader,

Welcome to the first Eurofuel newsletter of 2019. In this edition, we would like to take a look back at the last months of 2018, which were dominated by discussions on long-term solutions to tackle climate change. The European Commission presented its comprehensive strategy for emission reductions by 2050 just a few days before delegations from 196 nations gathered in Katowice, Poland, for COP24 in order to hammer out a deal on new rules for the calculation and reporting of emissions globally.
Eurofuel contributed to these debates with a very timely event on future fuels, which presented how the development of Power to Liquid or e-fuels will be central to meeting Europe’s greenhouse gas emissions goals for 2050.
We can at last also report to you that the voluminous Clean Energy Package has been adopted by the European Parliament and Council. After two years of intense negotiations, the European Union has agreed on new rules for energy markets, energy efficiency and the energy performance of buildings.
2019 will see fewer legislative developments at EU level, but will be a year of institutional changes. While the looming Brexit will change this continent’s political landscape like few events in recent memory, the European elections in May will reshuffle the distribution of power both in the Parliament and in the Commission. The incoming law-makers and political appointees will certainly bring new spirits and initiatives – it promises to be an exciting and busy year. We will keep an eye on relevant developments to ensure we grasp the opportunities to put the heating oil sector on the agenda for the next legislative term.

The Eurofuel team wishes you a good start to the new year and looks forward to discussing past and future developments with you in person very soon.

Yours,
Dr. Ernst-Moritz Bellingen

 

 Clean planet

A Clean Planet for all – Commission proposes long-term climate strategy

On 28 November, the European Commission released its long awaited comprehensive long-term strategy for emission reductions, called a Clean Planet for all. The Strategy sets out several pathways to climate neutrality by mid-century. The aim is not to spell out concrete emission reduction targets, but to present options on how to achieve drastically reduced greenhouse gas emissions ‘through a socially fair transition in a cost-efficient manner’. The strategy requires a holistic approach (looking at environmental, societal and economic factors) for decarbonisation across all sectors, with a focus on the energy-intensive industries, such as steel, cement, transport, plastics, and will form the basis for regulatory developments in the next legislative term. It recognises that only a mix of different energy sources and technologies will achieve the necessary greenhouse gas emission reductions. The Commission rightly points out the need for synthetic fuels like PtL as an ideal form of energy to store and transport renewable electricity in future.

Eight different scenarios are outlined in the strategy, showing different pathways to emission reductions between 80% and 95% by 2050. Scenarios look at different technologies and actions which foster the move towards a net-zero greenhouse gas economy. They vary in the intensity of application of electrification, hydrogen and e-fuels (i.e. Power-to-X) as well as end user energy efficiency and the role of a circular economy, as actions to reduce emissions.
As for the deployment of renewables across sectors, the Commission foresees by 2050 the following supply: 60% renewables, 20% nuclear, 5% e-liquids and e-gas, 5% fossil liquids and 10% non-energy fossil fuel use.

Member States are split on whether the headline target of complete decarbonisation by 2050 is politically and economically tenable, as it will require major changes in all sectors, from transport to housing to heavy industry to energy and most member states are not on track to reach the commitments of the Paris Agreement or carbon neutrality by 2050. Nonetheless, reactions from industry and NGOs were mostly positive, realizing the challenge but also the need for ambitious targets.
The Strategy will be discussed in the European Parliament in Council over the next months. The Parliament is expected to adopt a resolution commenting on the Strategy before the elections, while the Council will discuss the Strategy during at least six Council meetings over the next moths, before adopting conclusions – and likely choosing one of the eight scenarios outlined – at a special European Council Summit in Romania on 9 May 2019.

 

COP24

Paris Agreement rulebook agreed at COP24

The 24th UN Climate Change Conference took place in Katowice, Poland, in December 2018. At the heart of the high-level talks was the implementation of the 2015 Paris Agreement. After three years of negotiations – and two more weeks of intense talks in December – 196 countries agreed on a common “rulebook”, which will serve as an operating manual for the Paris Agreement to enter into force in 2020. The rulebook details how countries should monitor and report their greenhouse gas emissions and the efforts they are taking to reduce them, and how they will update their emissions plans.
All countries are expected to update their national greenhouse gas reduction targets by the end of 2020. The European Union and its Member States joined the “High Ambition Coalition” of countries pushing for the most advanced targets. The Coalition released an urgent call to increase ambition and strengthen efforts to tackle climate change. On the back of this, the Commission is expected to raise the European-wide emission reduction target before the end of next year.
Given the increased pressure, we can expect the next Commission to keep up the focus on decarbonisation and to keep working on pathways to reduced emissions in many industries by 2050. The heating industry will certainly play an important role in any future discussions – and we stand ready to contribute to the debate.

 

Successful Eurofuel event on future fuels

On 21 November, Eurofuel presented, together with the Brussels-based organisations ECFD and UPEI and with the respective German members, a Prognos AG study on the “Status and Perspectives for Liquid Energy Sources in the Energy Transition”. In front of an audience of experts and professionals from the transport and heating fuels sector, Jens Hobohm of Prognos AG explained how the development of Power to Liquid (PtL) or e-fuels will be central to meeting GHG emissions goals for 2050. All indications are that, notably for the aviation, maritime, and road freight sectors, liquid fuels will be required in order to meet the demand for energy dense fuels as well as in other areas where (battery) electrification is too complicated and too costly. The study suggests that while the technology to deliver carbon neutral liquid fuels exists, major investment is required in order to scale up and lower costs in order to bring the product to market.
A panel of experts debated the study: from the vehicle manufacturers, Ralf Diemer of the VDA office in Brussels, Christian Küchen representing the German refiners association MWV, Johan Mattart head of the ECFD Brussels office and Carlos Calvo Ambel, Manager at Transport & Environment for Analysis and Climate.
The full report of the event can be found here.

Future fuels

 

Adoption of the Clean Energy Package

The remaining files of the Clean Energy Package have been adopted by the European Parliament and Council and were signed by the presidents of the European Parliament and Council on 11 December. The files were published in the Official Journal of the European Union on 21 December 2018, meaning that after the Energy Performance of Buildings Directive, which was adopted over summer, also the new Renewable Energy Directive, the Energy Efficiency Directive and the Energy Union Governance Regulation are official EU law. Member States will now have to transpose these new rules into national legislation.

 

New Eurofuel-Member from Finland: LEY

The Finnish association Lämmitysenergia Yhdistys (LEY) is a new member of the European heating oil association Eurofuel. LEY was founded in 1956 in Finland and pools the interests of oil traders, craftsmen and importers. With LEY, Finland remains a member of the European heating oil association Eurofuel. So far, the Petroleum and Biofuels Association from Finland has been a member of Eurofuel, but had to terminate membership at the end of the year after the members decided to dissolve the association. Fortunately, it has been possible to win another Finnish association, LEY, which will strengthen Eurofuel activities from January 2019.