According to NGO Transport and Environment (T&E), including biofuels and e-fuels in road transport would reduce available volumes for hard-to-decarbonise sectors, while doing nothing to bring down e-fuel prices for aviation and shipping.
As T&E notes, the aviation and shipping EU regulations (such as RED III) provide the right regulatory incentives to prioritise truly advanced and sustainable biomass feedstocks for hard-to-abate sectors. Furthermore, the EU climate targets will slash demand for oil and gas.
As a result, fuel suppliers are investing in e-fuels and biofuels to replace them. It is in their interest to maximise the number of sales markets for those fuels, despite hard-to-abate sectors such as aviation and shipping needing to prioritise fuels based on green hydrogen (and advanced biofuels in the case of aviation) for their own use.
However, as part of its market maximisation strategy, the fuels industry tries to convince aviation and shipping actors that they would benefit if road transport also used biofuels and e-fuels. They claim that “using e-fuels in trucks and buses will help scale up production, reduce their costs, and make them more available for planes and ships”.
However, if e-fuels and biofuels are credited in the CO2 standards for heavy-duty vehicles (HDVs), fuel producers would have an incentive to only provide the minimum volume of e-fuels and biofuels to the aviation and shipping sector that is needed to fulfil regulatory sub-targets.
They would tool their refineries to the detriment of kerosene output and try to maximise the fuel volume going into road transport. The same logic applies to advanced biofuel feedstocks, where competing uses are already limiting access to sustainable sources, which should therefore be prioritised in non-electrifiable transport modes.
The adoption of this crediting system could jeopardise the aviation and shipping industries’ access to sustainable, affordable, and scalable renewable fuels and their chance to cut emissions and move towards climate neutrality. As to the argument that road transport would shoulder the cost burden, it makes little economic sense. Unlike aviation and shipping, road transport including trucks and buses can decarbonise by going fully zero-emission.
From a total cost of ownership (TCO) point of view, this is a third cheaper than running trucks on e-diesel 8 , so it is unlikely hauliers would be willing to operate trucks on e-diesel and pay a significant premium given the small profit margins in the road haulage industry of one to two percent.
