Staff blog: Fuels

Indonesian drivers probably don’t realize they are paying more at the pump because of their country’s biodiesel mandate, which sets ambitious targets for the blending of biodiesel in diesel fuel. Indonesia’s biodiesel mandate is scheduled to increase to 30% in 2020, and as total transport fuel consumption is expected to grow steadily, this means the total amount of biodiesel required, and the total additional fuel costs to consumers, will ramp up quickly.
The food-based biofuel cap is in the Commission’s Renewable Energy Directive (RED II) proposal for a reason, and effectively removing it through the exception for HSCCBs can hardly be called “sustainable.”
The EC’s proposed mandate can indeed be an important step toward advanced biofuels, but it can and should do more to avoid unintended consequences. Improving the sustainability criteria defined in the mandate will help ensure that it reduces life-cycle GHG emissions without harming the environment in other ways.
The messages on cost, greenhouse gas emissions, and latitude in interpreting the statute may not be entirely consistent, but one thing is clear: U.S. EPA is now intent on dialing down RFS obligations, and that is a real change.
How much reduction in CO2 emissions is Indonesia actually getting from its biofuels policy? Short answer: zero. Long answer: Indonesia is actually increasing its CO2 emissions substantially.
If the government is really concerned about reducing GHG emissions by increasing use of biofuels, there is still time to make sure it includes sustainability clauses, for the environment and the smallholders, and doesn’t just cater to palm oil investors.