In its World Energy Outlook 2015 published on 10 November, the International Energy Agency (IEA) has warned that without additional policy efforts, low oil prices threaten the development of important climate alternatives, such as biofuels, which can help reduce oil use and cut greenhouse gas emissions. ePURE believes that low oil prices strengthen the need for policy measures that mandate the use of low carbon, renewable alternatives in transport, such as renewable ethanol.
In its latest Energy Outlook the IEA predicts that if oil prices remain near €45 a barrel up to 2020, the development of alternatives in transport - such as electric cars and biofuels - would be stifled. The IEA points out, however, that if policymakers remain committed to providing support in the form of the necessary market rules, policies and subsidies for renewable alternatives, then lower oil prices would not push renewable energy out of the market.
The IEA warns that although good progress has been made, the world is not on course to achieve the emissions reductions needed to meet the 2°C target and outline a number of policy measures to remedy this. The IEA highlights that fossil fuel subsidies ($490 billion) were over 21 times bigger than the support given to aid the deployment of biofuels ($23 billion) in 2014, a situation which further compounds the negative impacts of low oil prices on biofuels deployment.
More than 30 countries attending December’s climate talks in Paris have outlined their plans to use biofuels as a means to reducing greenhouse gas emissions in transport. With European transport 95% dependent on oil use, continuing EU policy measures to increase the share of renewables in transport is important now more than ever.
European renewable ethanol, with around 60% savings compared to petrol, is a cost-effective carbon abatement tool and one of the solutions to help Europe achieve its own climate objectives.