Charles-Albert Peers is the Chairman of ePURE, the European renewable ethanol association. In our interview with him at the World Ethanol & Biofuels conference, we discussed the emissions savings ethanol can deliver in the near term, and the difficulties involved with investing in second generation biofuels production.
“Today, the average age of cars in Europe is about 11 years. What does that mean? It means that if you buy a car today, there’s a reasonable chance that that car will still be on the streets of Europe in 2030.”
If you look at the recent reports that have come out of industry bodies like the IEA and the IPCC, I think there’s a disconnect between the amount of bioenergy these reports are advocating, and what’s currently on the table in terms of European policy. What do you think accounts for that?
“Well, it’s clear that if you look at RED II – the renewable energy directive two –they say we will have a target to have 14% bioenergy in transport. But in these 14% you have 7% which is complete unknown factors with a lot of multipliers, it comes to the conclusion that at the end of the day in 2030, there will not be any more biomass energy in the transport sector than today – or very little more. And it’s obvious that the European Commission doesn’t believe we need any bioenergy. They just believe in electricity, but the EU mix of electricity is far from renewable.”
I think you’re right in saying that – that there’s this sense, particularly among regulators, that electrification in transport is the way forward. But I’m getting a different message from listening to the conversations at this conference about how biofuels and electrification can actually work together to decarbonise the transport sector. Could you explain a little bit more about how that might work?
“Well, if you look to all the studies on cars, you will see that today the average age of cars in Europe is about 11 years. What does that mean? It means that if you buy a car today, there’s a reasonable chance that that car will still be on the streets of Europe in 2030. So you have to take that into account. You can take a lot of assumptions, for example Ricardo has made assumptions about that, and others… and the numbers of electric cars – including plug-in hybrids – are estimated at between 10% and 20% by 2030. What does that mean? It means that in 2030, there will still be about a minimum of 80% of combustion engine cars running. The idea is that we have to decarbonise the fuel of these cars, and not wait until eventually in 10, 20, 30' years time there will be an electrification of all the cars, and in the meantime do nothing. So it’s very important that biomass, and for example ethanol, plays an important role in the decarbonisation of existing fuels, and that has to be immediate.”
I think one of the measures I like that ePURE advocates, because it’s very simple to implement, is the labelling of fuels. Do you think that consumer choice will be a driving factor in the decarbonisation of transport, or is it mostly to do with regulations?
“There is an interesting experience about consumer choice. If you look to diesel cars for example, between 2009 and 2014 there was no obligation to put any catalyst on cars. Catalysts were on the market, and if you take brands like BMW and others they were proposing catalysts as an option, and about 5% of the people during that period of time have taken the option. That means that about 5% of consumers are really considering to pay a higher price to reduce emissions in transport. So without regulations which have the goal of driving the change in the energy transition, it will be very difficult for me to have a natural market going there.”
And something else that comes out of the regulation is this focus on cellulosic ethanol production. But I’m not sure whether there really is a credible prospect for a breakthrough in cellulosic ethanol in the near future. How do you think that will play out – is there anything regulators can do to help that? What’s ePURE’s perspective?
“Well, cellulosic ethanol – if you look to cellulosic ethanol, the technology exists. You can produce, you can build a plant today, you can invest 100 to 150 million Euros in a cellulosic ethanol plant to produce between 50 and 80,000 cubic metres of ethanol. You need of course to have a reliable source of biomass under reliable economic conditions – but if you have that you can build tomorrow a cellulosic ethanol plant.
“Why are people not doing that today? Or very few are doing that today? There are two reasons. One is that the cost price of cellulosic ethanol is higher than the conventional ethanol, and when we see that the conventional ethanol prices are every year more cost effective and cheaper, the difference between that and the cellulosic ethanol price is quite high – it can be double. And at the end of the day, who will pay the price for it? There is no regulation that says at the end of the day the consumer will pay the price for it. That is part one.
“The second big problem is the uncertainty of investment. We have seen with RED I for example that they started in 2008, the project for 2020, everybody built plants, and then four years later they revised the situation and they created an enormous uncertainty in the market. Today, the RED II, which is not definitely on paper today, they already say that they will revise that in 2023, and so on, and the maximum is a vision until 2030. So if you make an investment now in biofuels in Europe, and especially in non-mature technology like 2G, you have to make sure that you have a payback in a very reasonable time, because you still have a big uncertainty. You don’t know what they will do in ten years’ time. So that creates an enormous problem for investors in 2G today.”
