Energy transition update – S&P Global, Geneva

If you use electricity, a car/truck, drive, fly, take the train, use ships or travel in any way this article is relevant to you. 

FGA attended S&P global Biofuel Conference as a speaker to discuss their work in the energy transition, as an innovation consultancy. 

The conference was full of insights and updates which we’d like to share. 

It was encouraging at the S&P Global conference, Geneva, to hear the outlook was 83 % positive for the growth of the biofuel supply for this year for road, air and marine. 

In the room were several private biofuel and feedstock suppliers as well as bp and Neste. 

Biofuels are used for road, air and shipping and HVO, a type of biofuel, can be used for electricity generation too. Whether this is passenger travel or for cargo there is a huge amount of fuel needed to reduce fossil use and we are undergoing an energy transition which is stated to be needed within 7 years time. There will be significant effects to our global weather systems and major side affects, which we are already seeing, if we don’t reduce our atmospheric carbon. When scientists discovered that CFCs were damaging the ozone, this took 20 years to cease using, ban and remove from production. We’ve known about fossil fuel pollution for around 100 years. We will need to go into mitigation tactics post 2030, to slow down use and to speed up the switch, as we work towards this future. From the conference there was a lot of optimism but also discussion of a lot of blockers. Please read on to hear more.

We refer to well known charts such as these energy split charts, in order to understand the energy needs for transport and magnitude of the task.

Total global carbon from transport: 11.9% road, 1.7% shipping , 1.9% air

In energy requirements it is 7.2 gigtons which is 7.2 billion tonnes of carbon burned for movement purposes.

Under discussion was: green electricity, ethanol, green hydrogen and new crops for biofuels were also discussed. 

Electricity ⚡️ for efuels – plane & train & road 

In 2021 elec from renewable was 29% globally increasing to 35% by 2025 (IEA).

We need more green electricity for efuels which could be increased through nuclear. Read our trends here

Pedro Verzon (IETA) discussing that it took us decades to grow the levels we are at in green electricity but we only have 7 years to double the amount, in these ways it does not sounds positive but IEA says renewable electricity generation in 2021 was set to expand by more than 8% to reach 8 300 TWh, the fastest year-on-year growth since the 1970s. in 2021 growth was 7% actual, so great progress. 

European Commission asked a poll.

E-fuels who have been discussed by many within the aviation sector are also being discussed to accelerate the transition in road. With the switch to non combustion planned by 2035 it is expected that there will be a need to still run combustion engines but it is possible on non-fossil fuels and news from European Commission has assured the sector that they will be attainable and at a better price according today’s policy announcements on synthetic fuels.

E10 is a new blend for road transport available in many countries but E15 and E20 are now coming to the market which blends ethanol at 15% and 20%, and are safe for engines it was discussed. by the association ‘EPure – European renewable ethanol association’,

New energy crops discussed included caranata which supports avoiding the use soy or palm/ (food crops) which are classically for the food sector and being phased out of allowances and directives at least in the EU, South America and Asia still allow them to be used for fuel. 

There was a lot of innovation discussed, the energy transition as well as regulation. Despite regulation being unclear, changing more frequently (2-3) years over 6-7 at EU level mentioned EBWBA there was still investment happening. Progress is being made. 

St1 discussing reinvesting 50% of profits back into the company into bio and clean energy.

However, it was discussed that ROI lag due to changing regulation/incentives was a blocker and could mean some projects went on hold until market conditions/regulations became right, when such large amounts are invested in the $100s of millions to $billions range these moves can be make or break projects. What could be a 5 year run way could stretch to 10-20 year return and not commercially viable, which is not sustainable finance. 

bp discussed several new SAF plants coming online as it became clear SAF is needed and now wanted and also this week RSB announced the Book & Claim manual which now explains how to share scope 1 and 3 with airlines and travellers, as well as consideration for national incentives and the carbon management systems EUETS and CORSIA. 

Neste alone can reach the 2% target of SAF in the EU (2 million tonnes) by 2025 so things are really moving now compared to the lack of movement up to 2020 which meant the targets for EU Flight Path were not met.

The European Commission now putting together a €1.8 package to pay for the price difference between Jet-A 1 and SAF. Please contact us to discuss this further

Neste predicted HEFA & UCO would be used for 10-20 years at least and others echoing this, although the EU propose a cap on this feedstock.

Marine was discussed as definitely open to biofuel use and as they can use much heavier fuels, fractures or lower quality feedstock then they should be developed. The group found it was corporate customers leading the way who were asking for fuel as part of corporate carbon reduction targets and were willing to pay more but in general biofuel wasn’t demanded by standard logistics or cargo companies. 

Targets types: Sweden has carbon reduction percent target, California incentivises carbon intensity by giving credits for fuels with tech that lowers carbon intensity, mandates have volume targets and so there are many ways to think and calculate the reduction globally, so it is not uniform. Something to consider.

Sarah Wilkin, our CEO, presented FGA’s work and spoke about how some high profile grant programs, alliances and build-back-better campaigns have been ensuring aviation and business travel are taking the energy transition forward and seriously as well as important milestones such as Book & Claim and SAF volume increase and take up. Also how energy transition plans, Science Based Targets, which she mentioned on more than one occasion, as well as not stranding ‘brown’ assets is their approach over idealism. 

Rome wasn’t built in a day, just as it can’t be deconstructed or rebuilt with new material in a day either. 

Sarah Wilkin, FGA

FGA liked: the good feeling of progress from the group and desire to make change happen as well as openness to innovation to ideas and opportunities. 

Something to think about: There was some scepticism over Transport & Environments no-biofuel-immediately policy, their methodologies and reported unsubstantiated approaches and the T&E representative was questioned.

For next year: Some more gender balance on panels would be welcome next time. Perhaps someone from Science Based Targets and more corporate buyer case study examples.

Please contact to discuss panel opportunities and consultancy work in this area.

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