Draghi report: Renewable ethanol has a vital role in boosting EU competitiveness, achieving climate goals

The EU should take a more pragmatic, technology-open approach to achieving its Fit for 55 goals and unleash the potential of sustainable low-carbon alternative fuels such as renewable ethanol, according to the newly released report on European competitiveness authored by Mario Draghi.

Unveiled this week by Draghi and European Commission President Ursula von der Leyen, the report makes several recommendations for boosting EU competitiveness and improving Member States’ performance in achieving renewable energy targets.

The Draghi report also notes that while the EU has been a world leader in developing renewable energy, thanks in part to the use of sustainable biofuels, its recent policy choices put it at a competitive disadvantage against the rest of the world going forward. Notably, it points out that vehicles powered by internal combustion engines will be prominent on EU roads for a long time, making sustainable low-carbon liquid fuels such as ethanol vital to transport defossilisation.

Here are some of the key takeaways from the Draghi report:

The EU should do more to unleash the potential of alternative fuels such as renewable ethanol

The report underlines the benefits of displacing fossil fuel with renewable ethanol, which “can be produced as a renewable fuel from various feedstocks (e.g. corn and cellulose). From a lifecycle perspective concerning emissions, CO₂ released by burning ethanol is offset (partly, depending on the feedstock) by CO₂ captured by growing feedstock crops. Low-level blends (up to 10% ethanol, and rest gasoline), can be used in any conventional gasoline vehicle with the same infrastructure for distribution.” The report also notes that higher ethanol blends such as E85 can be used in flex-fuel vehicles and regular petrol cars equipped with a simple converter.

Biofuels have helped boost the EU’s comparative advantage in green technologies and energy autonomy

The report notes Europe’s leadership in renewable energy including biofuels (which account for the majority of renewable energy in transport). "The EU is strong in domains such as green transport, biofuels and wind energy,” the report says. “Nevertheless, China is catching up quickly, with its number of patents increasing rapidly. The EU will need to make a sustained effort to retain its comparative advantage in green technologies, which represents both an opportunity for commercial exploitation and a driver of the green transition."

More action is needed to achieve renewable energy targets

Most EU Member States did not meet the 2020 targets for the use of renewable energy in transport and none declared the use of sustainable biofuels in aviation or maritime transport in 2021, which a recent European Court of Auditors report said was due to a patchwork approach to EU biofuels policy. To date, the EU has limited installed capacity and planned production.

Renewable and low-carbon fuels will also be essential for aviation and maritime transport

“Sustainable renewable and low-carbon fuels are essential for the decarbonisation of aviation and maritime transport in the medium term and may be required for heavy-duty vehicles,” the report states. “However, several challenges need to be overcome to ramp up today’s marginal production capacity.”

Technology-openness should be at the heart of EU policymaking

"The technological neutrality principle, which has been a guiding principle of EU legislation, has not always been applied in the automotive sector,” the report states. It notes that the EU’s Fit for 55 legislation on reducing car emissions “includes the call for the Commission to make a proposal allowing the registration of vehicles running on CO₂ neutral fuels after 2035. Carbon neutral alternative fuels would be based on a net or life cycle emission assessment." The report says this review “should follow a technologically neutral approach and should take stock of market and technological developments.”

The EU needs a comprehensive Life-Cycle Assessment methodology to meet decarbonization goals

As the report notes, “Vehicles operating in Europe in 2040 are expected to still include approximately 45% of ICE and hybrid cars. Emissions reduction for these car types is also important to reach decarbonisation targets. An increase in the market penetration of low-emission fuels could compensate for a slower than expected uptake in BEVs.” (…) “One requirement with respect to regulatory certainty and guidance for R&D and investment in alternative fuels is the clarification of the methodology for emission-neutral fuels, which is still missing.

“The message from the Draghi report is clear: Europe needs to make better use of strategic domestic assets such as renewable ethanol biorefineries, which produce food, feed and fuel and contribute to EU goals for climate change mitigation, energy independence and food security as well as a competitive economy,” said David Carpintero, Director General of ePURE, the European renewable ethanol association.

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photo © European Union, 2024