Brexit: What does it mean for the advanced bioeconomy?

UK and renewables

UK alternative fuel sales have been falling, even with the RED targets. We reported in April that the Department of Energy and Climate Change says liquid biofuel use in transport fell more than 17% in 2015 to 1.46 billion liters with biodiesel consumption taking the biggest hit of 30% to 669 million liters. Ethanol consumption, representing 54% of biofuel consumption, fell only 2% last year to 795 million liters. Ethanol accounted for 4.6% of gasoline consumption by volume, compared to just 2.3% for biodiesel, reaching a total blend of 3.2%.

For now, think a 7% renewable energy long-term target debate for the UK. That’s the level which the UK’s National Farmers Union urged the Department for Transport in February as a cap on crop-based biofuels at 7%. Some NGOs have been advocating lower levels, which the NFU said which could put farmers in a difficult position financially and become uncompetitive against other European producers. The Indirect Land Use Change legislation approved by the European institutions last year allows a maximum of 7%. The NFU is also urging the implementation of 10% biofuel blending, especially for ethanol, compared to just 4.75% now.

It may all be academic, because the UK is in danger of missing targets — and in a Brexit, may avoid the financial consequences of a miss. As we reported last November, the UK’s Energy Secretary said the country isn’t likely to meet the European Union’s renewable energy targets for 2020 because the policies are not in place, especially for transport. In a leaked letter to other cabinet members, she said “The absence of a credible plan to meet the target carries the risk of successful judicial review, and failing to meet the overall target in 2020 could lead to on-going fines imposed by the EU Court of Justice (which could take into account avoided costs) until the UK reaches the target level.” She specifically points to the need to implement the 10% target for transport.

British bioeconomy policy

Don’t think for a minute that the UK has a coherent internal policy in liquid transportation. In fact, British Airways partly blamed the lack of government support for having to scupper its Green Sky project with Solena to produce 16 million gallons of aviation biofuel annually from London’s MSW beginning in 2017. Says BA, the government failed to include aviation biofuels in its Road Transport Fuel Obligation policy that provides incentives for road transport biofuels, a policy failure the company says led to investor reticence in the project. Solena entered bankruptcy proceedings, forcing BA to look for other waste-to-biofuels technology partners to bring the project back on the table

We may see some movement in palm oil attitudes. At the end of last year, the UK Department of the Environment, Food and Rural Affairs decided that industries other than biofuels can create their own definition of sustainability for palm oil and aren’t required to follow those approved by the European Union’s Renewable Energy Directive. It said in its recent report looking at improvements in palm oil sustainability over the past three years that it is up to the sectors themselves to decide what is sustainable. Palm oil only accounts for about 5% of the biofuel consumed in the UK, and roughly about 5% of palm oil production globally has traditionally one towards biodiesel, though that may change as Indonesia, Malaysia and India boost consumption.