The Energy Republic February - March Edition 2023

VDB EXCLUSIVE INTERVIEW
does not provide the necessary detailed
regula ons which the biofuel industry needs.
Elmar Baumann, Managing Director of the Associa on of the German Biofuels Industry (VDB)
Most of the agricultural feedstock is
growing here and in Europe. The
categoriza on of feedstocks for biofuel
produc on is carried out according to the
European “Renewable Energy Direc ve”,
abbreviated as RED - today, the RED II is in
place, and RED III will be approved before
this summer. There are three categories:
crop-based biofuels like biodiesel made
from rapeseed oil or bioethanol from
cereals, waste, and residue-based
biofuels according to annex IX-part b from
used cooking oil or animal fat and
advanced biofuels as per annex IX-part a
like biomethane from straw.
Current investment ac vity in Germany
and Europe is partly about op miza on
for exis ng facili es such as energy
consump on, yields, and adapta on to
new feedstocks, and partly about
construc ng new facili es for advanced
biofuels.
TER: You have talked about the various
applica on processes of biofuel
produc on. Moving forward, how have
biofuels par cularly in transporta on
developed over the past years?
Baumann: Their market development
has not been without problems, caused
by mul ple legisla ve changes on the
European as well as on the na onal level.
For example, in Germany in 2009, we had
a decrease in the biofuel mandate which
was set up retrospec vely. Then we had
the debate on indirect land use change
(iLUC) star ng in 2011, culmina ng in the
iLUC-direc ve adopted in 2015, an
amendment to the RED I.
We managed to escape the threat of crop
cased biofuels being phased out by 2016.
Then the European Commission prepared the
RED II, a con nua on of the RED with a 2030
perspec ve. Our industry was interested in
having a 2030 target for transport and
sufficient demand for crop-based biofuels. The
RED II was approved end of 2018 - two years
before the RED I expired -, and the outcome
w a s a c c e p t a b l e : n o p h a s i n g o u t o r
displacement of crop-based biofuels. And
then, as you probably know, member states
had to integrate this direc ve into na onal law
which Germany did last year in 2021. Yes.
The na onal transposi on of the RED II gave us
an excellent pathway for 2030. This was an
achievement of two years of work on the
German level. Half a year later, three ministers
of the new government started cri cizing the
use of crops for biofuel produc on. They
started their ini a ve against biofuels on the
occasion of the war in Ukraine claiming that
food is in short supply. Indeed there was
uncertainty about food deliveries from
Ukraine. But the real cause is the nega ve
posi on of the Green party concerning
biofuels and the poli cal dispute with the
Liberals.
T h e d i s c u s s i o n a b o u t r e d u c i n g t h e
contribu on of biofuels and phasing them out
un l 2030 is s ll ongoing, which creates
uncertainty in the biofuels market. So it's not
exactly what we need when the industry is
preparing for investments to secure the
achievement of new targets, and it's difficult.
On the other hand, there's sort of a parallel
world in Brussels: The European Commission
Those detailed regula ons are s ll missing for the
RED II, which was passed in 2018 and is now
amended to become the RED III in 2023. Four
years a er the adop on of the direc ve, the
Commission did s ll not deliver important
specifica ons. This makes it quite difficult to keep
the overview, pursue a clear pathway, and make
investment decisions.
Another example: the European Commission has
s ll not finished the process of extending the list
of feedstocks in Annex IX Part A and B.
As you can imagine, if you build a facility to
process a certain feedstock, you need to know to
which category your feedstock belongs, and does
your product count as advanced biofuel or wastebased
fuel. This is crucial for your marke ng.
And if there are changes, then this makes your
calcula on invalid because you thought of a
certain market for waste-based and advanced
biofuels but now with more feedstocks, the
framework condi ons change. And all this is
uncertain at the moment. The choice of
feedstock is decisive for your process or how easy
or how hard is it to process this feedstock.
TER: Based on your perspec ve, What would
you recommend as an appropriate legal
framework to boost biofuel development in
Germany and the European energy industry?
B a u m a n n : I t ' s q u i te e a sy. T h e R E D 2
transposi on into German law with the
amendment of the GHG mandate was perfect. So
we worked quite hard to get good framework
condi ons for the German biofuel industry. The
regula on for advanced biofuels according to
annex 9 part A provides a strong incen ve to use
those biofuels and to invest in produc on
facili es as volumes above the sub mandate
count twofold. This means that even when
mineral oil companies have fulfilled their sub
mandate for advanced biofuels, the market can
s ll take these biofuels at relevant prices. This
makes the German market a magnet for
advanced biofuels.
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