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Rising energy prices, security of supply… and the green transition

The current geopolitical situation is having a great impact on the energy markets in Europe. How can the EU continue to drive its energy transition in this context?

“Naturally, the biggest concerns in Europe right now are the high energy prices and security of supply. This, however, is not in contradiction with the energy transition. We need to be ambitious about lowering our carbon footprint, but to guarantee an orderly transition we must also prioritize security of supply for our citizens and industry.

Josu Jon Imaz, CEO, Repsol | via Repsol

“In Europe we have embarked on an ideological energy transition in which we are selecting, rejecting, and preventing some energy investments for ideological reasons, not scientific or technical ones. Consequently, consumers and companies pay more for energy, industries become less competitive — some are failing due to the high energy prices — and worse still, our CO2 emissions are increasing as we shift from gas back to coal to generate power. So, we have to rethink our approach on the basis of technological neutrality.

Worse still, our CO2 emissions are increasing as we shift from gas back to coal to generate power.

“The number of tons of CO2 that we must reduce to reach our objectives is not in doubt. This target should be set in stone. The key is to find the routes that can get us to net zero in the fastest and most cost-effective way, leveraging and enhancing Europe’s industrial and technological capabilities. With COVID-19, the goal was clear: to find a successful vaccine to combat the virus. No technological or scientific constraints were established. Decarbonization should be approached in the same way, by avoiding determinism and letting all technologies compete and play their part.

“This will allow us to promote European industry and homegrown solutions that will improve our security of supply while reducing emissions to reach our climate targets.

The key is to find the routes that can get us to net zero in the fastest and most cost-effective way.

“One of these solutions is renewable liquid fuels, encompassing advanced biofuels and synthetic fuels, also called e-fuels, produced with renewable hydrogen and captured CO2 as the only raw materials. They will be a necessary complement to electrification in the transport sector, broadening the range of low-emission mobility technologies, with consumers choosing the ones that best suit their needs. Europe has an opportunity to lead development and production of these fuels.”

Why do you think renewable fuels could become an opportunity for Europe?

“First, production of renewable fuels in Europe will help guarantee security of supply and energy independence. They can be manufactured locally with waste materials that today mostly end up in landfills or burned. Europe has so far taken a very blinkered stance in favor of electrification when it comes to the decarbonization of the transport sector. Electric vehicles will play an important role in the coming decades, but they alone will not be enough to reach our reduction objectives. Worse still, we could just end up substituting our energy dependence on Russia with another dependence on rare metals and batteries from China.

Production of renewable fuels in Europe will help guarantee security of supply and energy independence.

“European industry is well positioned to produce decarbonization solutions for mobility. The manufacture of renewable fuels represents an enormous opportunity for industrial activity growth, contributing to the technological development of the sector and generating quality employment. The manufacture of advanced biofuels will catalyze the circular economy in Europe, creating new jobs, especially in rural areas. 

Repsol renewable fuels, an alternative for decarbonizing mobility | via Repsol

“Second, the use of these fuels is already allowing us to reduce our current emissions and will accelerate the decarbonization of transport, particularly where electrification is not currently viable, such as heavy-duty road transport, maritime, and aviation. These fuels are also a solution for light-duty road vehicles because they work with existing combustion engines and allow us to start reducing our emissions immediately without having to wait for the whole car fleet to be renewed. Thus, they offer an immediate solution for those sectors, territories, and consumers that do not have electrification within their reach in the short or medium term and can help us avoid segregating the population into those who can buy an electric car now and those who cannot.”

Can we rely on sustainable domestic supply to produce the fuels?

“The feedstock to produce these fuels is plentiful. Advanced biofuels can be made from a wide range of waste materials, such as crop residues, prunings, manure, and animal fats from our agricultural and agri-food industries; leaves, stem wood, and logging and sawmill residues from the forestry sector; as well as used cooking oils and the organic parts of our solid household waste. The processing of these residues does not involve or compete with products intended for food, and it favors the reuse of resources through circular processes. Imperial College in London estimates that the total availability of potential sustainable biomass in Europe is more than sufficient to supply feedstock for renewable fuels.”

The EU will fail to reach its climate goals without renewable fuels.

What will be the impact on the EU’s climate ambitions?

“The EU will fail to reach its climate goals without renewable fuels. Liquid fuels today make up 93-95 percent of Europe’s transport demand, and with the bottlenecks that still exist for a massive rollout of electric vehicles — in the battery value chain and in the charging infrastructure — we need renewable fuels to start reducing our emissions now in a cost-effective way.

“In the short and medium term, advanced biofuels made from nonfood organic waste are a solution already available on the market and a quick, immediate means of reducing up to 90 percent of the emissions from mobility, compared to traditional fuels. In the medium term, synthetic fuels will come to the market as another net-zero emissions alternative perfectly compatible with existing combustion engines.

“We need these solutions to complement electrification and advance the decarbonization of our mobility. We simply cannot allow ourselves to wait for the complete rollout of electric vehicles to solve this challenge. There is too much at stake.”

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