Incentives for aviation biofuel have a limited role in decarbonisation of air travel

26th January, 2017

While it was once hoped that biofuel would be a game-changer for transport emissions, evidence has since emerged of unwanted effects from biofuel production, including direct effects such as deforestation to grow biofuel crops, and ‘Indirect Land Use Change’ (ILUC) effects such as the use of previously forested land for agriculture (if agricultural land is used) for biofuel. Recent European Commission research that tries to capture these ‘ILUC impacts’ suggests European biofuel policy may in fact be increasing emissions overall, when compared with fossil fuel, the UK Government has noted. Research in the US has recently reached a similar conclusion.

As a result, the Government is keen to shift incentives away from crop-based fuels and towards fuel made from wastes that cannot be reused or recycled and has recently consulted on proposed policy changes to help deliver this. In particular it wants to incentivise what it calls ‘development fuels’ – fuels made with novel processes that are not currently affordable to produce at scale, including sustainable aviation fuel.

The Renewable Transport Fuels Obligation (RTFO) currently requires that 4.75% of fuel supplied for transport (not including aviation) must be from renewable sources. Under the EU Renewable Energy Directive, this percentage should increase to 10% by 2020. The Government’s proposal for aviation is that while suppliers of aviation fuel would not be mandated to produce a given quantity of biofuel, aviation biofuel could count towards suppliers’ renewable fuel obligations.

Should aviation get priority when it comes to accessing limited biofuel supplies?

The aviation industry has argued strongly that given the limited options for decarbonisation of air travel, it should get priority in accessing the limited stocks of sustainable biofuel that are likely to be available in future, including having access to government incentive schemes. The Government’s proposals to extend the RTFO to aviation, and to create a specific sub-target for ‘development fuels’ designed to meet specific ‘strategic needs’ – such as tackling aviation’s CO2 impact – go some way towards acknowledging this argument.

Yet the Government is also keen to point out that with the electric vehicle market still in its infancy, road transport will remain heavily dependent on liquid fuels for decades. In order to meet the CO2 cuts required under the Climate Change Act, therefore, cars will continue to need access to renewable liquid fuels even if electric cars sales are successfully increased, the Government argues. The Committee on Climate Change (CCC) similarly argues that sustainable biomass should be used as efficiently as possible, with preference given to the use of wood in construction and of bioenergy with carbon capture and storage rather than to create biofuel for aviation.

Our view

AEF’s response to the Government’s consultation on the RTFO argues that:

• Any aviation biofuel must – of course – be sourced sustainably, taking appropriate account of full life-cycle emissions and ILUC impacts.
• Incentives for aviation biofuel under the RTFO will not solve the aviation emissions challenge on their own. While biofuels may make a small contribution to emissions reduction from the sector (potentially comprising 2.5% of the total by 2050) the Government still urgently needs to produce a policy plan for limiting emissions to the level consistent with the Climate Change Act. This should consider what can realistically be achieved from aircraft technology, air traffic management, and demand management measures as well as sustainable fuel.
• The RTFO should be designed only to reduce the cost of producing sustainable alternative fuels compared with cheaper, conventional aviation fuels today and should not act as a general subsidy for the sector. The Government should guard against the risk that extending the RTFO to aviation may reduce the average cost of aviation fuel, leading to additional growth in the sector as a whole, not least given the lack of effective sector-wide climate change limits and for aviation.