EU approves Italian advanced biofuels scheme

Margrethe Vestager welcomes advanced biofuels project © Friends of Europe
Margrethe Vestager © Friends of Europe

The European Commission has approved a new Italian support scheme for the production and distribution of advanced biofuels.

The commission ruled that the project to develop advanced biofuels, including advanced biomethane, would contribute towards reaching EU energy and climate goals without significantly distorting competition in Italy.

The Italian scheme has a budget of €4.7bn and will run from 2018 to 2022, to support the wider uptake of second generation biofuels for the transport sector. Because these fuels have much higher production costs than fossil fuels, the scheme will allocate a premium to producers to compensate for these costs.

Premiums delivered by the scheme would allow advanced biofuels such as advanced biomethane to compete with fossil fuels. Producers can also increase their premiums by improving the distribution and liquefaction of advanced biomethane.

How do advanced biofuels differ from fossil fuels and standard biofuels?

Advanced biofuels and biomethane are sustainable and environmentally friendly fuels which are produced from waste, agricultural residues, algae, and other feedstock that do not use agricultural land for their production.

Because of this production process, these fuels are at significantly lower risk of indirect CO2 emissions caused by the additional land used to grow crops for standard biofuels. The European Commission considers biofuels, particularly in the transport sector, to be a key element in its plan to transition towards renewable energy and meet climate change targets.

What did the commission say about the project?

Commissioner Margrethe Vestager welcomed the project as an innovative way of supporting the production of advanced biofuels in Europe.

She said: “This is yet another step towards greater use of renewable energy in Europe and helping Italy’s transition to more environmentally friendly fuel sources. The scheme will encourage the production and consumption of advanced biofuels in Italy, while limiting distortions of competition.”

The premiums offered by the scheme will be updated annually, to ensure that producers are not overcompensated. Further, the project will incentivise farmers to produce biofuels and biomethane from waste on their farms, potentially contributing towards decreasing the carbon footprint of the agriculture sector.

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