Proceso de Alineamiento (2) Perspectiva (4) GTIEX´ GTIN´´ PIN´´

The Dutch biofuels obligation applies to fuel suppliers that sell diesel and/or petrol to road transport. These have to ensure that a minimum share of the transport fuels they sell is renewable. This share increases over time, was 4.5% in 2012 and is 5% in 2013. In addition, a minimum share of 3.5% needs to be met for diesel and petrol, how fuel suppliers meet the rest of the obligation is up to them.

The biofuels obligation is the Netherland’s transposition of the transport part of the Renewable Energy Directive, RED (EC, 2009a), which sets a target of 10% renewable energy in transport for 2020, for all Member States. Most of this target is expected to be met by biofuels, which have to meet the sustainability criteria defined in the RED to count towards the target.

Other renewable energy options that may count towards the target are renewable electricity, biokerosine and biomethane. The latter can be either used directly in transport, as bio-CNG or bio-LNG, or administratively, via injection into the natural gas grid (the so-called ‘groen gas’ or ‘green gas’ route). This ‘green gas’ route is currently the preferred option for many biomethane suppliers. The renewable electricity contribution is determined by multiplying the amount of electricity used in transport by the share of

renewable electricity, either in the Netherlands or in the EU. If the renewable electricity is used in road transport, it can also be multiplied by 2.5 to

compensate for the higher energy efficiency of electric vehicles.

However, the biofuels obligation only applies to suppliers of diesel and petrol for road transport and does not apply to electricity, kerosene or natural gas suppliers. Suppliers of these fuels/energy carriers may ‘opt-in’ the biofuels obligation, voluntary submitting them to this obligation. This means that they have to meet the target mentioned above (5% in 2013), but any excess renewable energy may be sold to other fuel suppliers via ‘biotickets’. This is therefore an interesting option for suppliers that offer any of these three types of energy carriers to Dutch transport, and intent to have higher shares of renewable energy in their fuel than the minimum target. This option to ‘opt-in’ has not (yet) been put in place for hydrogen suppliers.

This biofuels obligation is therefore an effective policy to ensure an increase of renewable energy in the reference fuels of road transport, and in GTL, which counts as diesel in the obligation. It can provide support to increase renewable energy in CNG, LNG and electricity in road transport, but as it is only voluntary for suppliers of these fuels, it does not ensure this transition. The obligation does not impact suppliers of hydrogen or DME, as it is not (yet) included in opt-in option, and it does not extend to the shipping sector.

Renewable hydrogen, DME and all forms of renewable energy in inland shipping are, however, included in the Renewable Energy Directive, i.e. these count towards the 10% target for 2020. It is therefore likely that these routes will also be included in the Dutch legislation in the future, once they become relevant.

5.4.3

SDE+

The SDE+ subsidy scheme provides financial incentives to producers of renewable electricity, heat and biogas, and can also be used in case this renewable energy is then used in the transport sector. Producers have to choose, however, whether they want to use the SDE+ or the opt-in option of the biofuels obligation, they can not apply to both.

The SDE+ compensates for the excess costs for production of power, heat or green gas compared with the fossil fuel based commodity price. The production costs – the so-called basic rate or ‘Basis Bedrag’ - are

estimated per production technology by a group of experts and on the basis of information from initiators and projects in the field. The basic rates currently considered are given in Table 82.

Table 82 Overview of the basic rates that apply to the various forms of biogas in the SDE+

Source: www.ecn.nl/docs/library/report/2011/e11054.pdf.

5.4.4

EU ETS

Electricity production is included in the EU Emission Trading System (EU ETS). Electricity producers therefore have to submit CO2 emission allowances for

every ton of CO2 they emit. These allowances have a market value, as they can

be bought and sold, and traded between participants of the system. The CO2 emissions of renewable energy are counted as zero in this system,

which provides a financial incentive to increase the share of renewable energy production – provided that the price of emission allowances is high enough to compensate the higher cost of the RE. In the current situation, the price of the allowances is, however, much too low to contribute to this shift. The SDE+ scheme provides much more significant compensation.

Aviation was also planned to be included in the ETS, but this decision has been delayed recently18_{. If this will indeed be the case in the future, shifting to}

biofuel will reduce the amount of emission allowances that the aviation operators need to submit, as biofuels would count as zero CO2 emissions in the

system. However, the incentive would be very limited as long as the price of the allowance is low, additional cost of biokerosine and bio-LNG cost are currently much higher than the allowance price.

Note that hydrogen production plants (as well as oil refineries) in the EU are also included in the EU ETS. However, they do not have to submit allowances for the fuels they produce, only for the direct emissions of the plants. Shifting to renewable hydrogen may reduce these direct emissions to some extend, but the resulting incentive is expected to be very limited.