SGS INSPIRE and expert Agustin Torroba analyzed the current state and future prospects of the global biofuel market, with a focused overview of Latin America’s role, identifying key opportunities, challenges, and strategic implications for energy transition, investment, and policy-making up to 2040.
SGS INSPIRE interviewed Anna Venturini, Policy Director at the European Biogas Association (EBA) and Giuseppe Welz, expert in alternative propulsion/gas business development at IVECO Group. The discussion covered the regulatory landscape, market challenges, and opportunities for biogas and biomethane in road transport, as well as their potential to decarbonize hard-to-abate sectors like aviation and shipping. They highlighted that biomethane-powered trucks and buses provide an immediate solution for reducing emissions in road transport.
Episode 10 of our Energy Talks podcast focuses on the new European Commission and its expected priorities on transport policies and regulations for the next 5 years.
SGS INSPIRE Claire Couet interviewed guest speaker Julia Poliscanova, Senior Director for Vehicles & E-mobility supply chains at influential European NGO Transport & Environment (T&E).
She explained that her organization’s wish is to see continuity with the Green Deal agenda. She expressed her views about what to expect from the designated European Commissioners.
T&E namely wants them to continue pushing for electrification of road transport, keeping the Fit for 55 targets and tackling the remaining barriers such as permitting, low investments in electricity grids and not enough leveraging of demand-side flexibility. She also called for more regulatory attention to the decarbonization of aviation and shipping.
She specifically noted that T&E is against revising the current legislation on CO2 emission standards for cars, vans and heavy duty vehicles, namely to avoid a negative impact on other value chains such as the battery manufacturing in Europe.
Episode 9 of our Energy Talks podcast is a conversation on road transport decarbonization policies, especially the case of Brazil, with Daniel Amaral, the Director of Economic and Regulatory Affairs at ABIOVE, the Brazilian Association of Vegetable Oil Industries.
The interview, carried out by SGS INSPIRE Business Development Manager, Claire Couet, also included Henry Gomez, SGS INSPIRE Market Analyst for Latin America and the Caribbean.
Daniel Amaral emphasized that transport decarbonization policies in Latin America should leverage biofuels to substitute fossil fuels as most countries have available lands (and even degraded lands) that can be used, without the risk of deforestation. He pointed at ethanol and biodiesel as the main target biofuel products in the region, also being the main biofuels used in Brazil. He underlined that biofuels also create growth for the countries involved. Ethanol plays a very important role in Brazil for light duty vehicles while biodiesel helps decarbonize heavy duty vehicles. Brazil is a net importer of conventional diesel, so biodiesel helps meet environmental concerns, to reduce import dependency and create all kind of local opportunities.
Petrobras, the Brazilian national oil company, is using bunker fuel up to 24% v/v biodiesel content, so there are good perspectives for more blending used in maritime transportation, according to him.
He regretted that soy bean oil and palm oil are being excluded by regulation from European and American markets and called for a global vision for these fuels. In his view, policies should focus on good production requirements like GHG emission reduction rather than excluding the main two vegetable oils in the world, which reduces the cooperation opportunities between LATAM countries and other regions.
Henry Gomez mentioned that we need all available feedstocks to cover biofuel demand in road transport, aviation and the maritime sector. He added that using waste as a feedstock is a challenge that must be addressed successfully in LATAM, but that soy bean production still represent a competitive feedstock compared to other regions, due to the connection with the agricultural sector, hence its strategic importance for these countries. Gomez highlighted that capacity production and mandates could be increased in many counties, and that fiscal incentives could be put in place to improve biofuel markets in the LATAM region.
Daniel Amaral mentioned that higher oil content crops beyond soy bean and corn, should be developed in Brazil. So rapeseed and sunflower are seen as options but also perennial crops, such as palm oil and macaúba (native Brazilian crop). That could be the next wave of feedstock because they could use the same land more intensively and the same crushing plants, including similar logistics. Daniel Amaral called for a reinforced partnership with the EU and the US on biofuels to increase win-win situations for all parties.
The eighth episode of our podcast is a conversation with Professor Andrei Belyi, CEO of consulting energy firm Balesene and Adjunct Professor in Law and Policy at the University of Eastern Finland. The interview covered the expected use of renewable and low-carbon fuels to reduce greenhouse gas emissions from the shipping sector. Professor Belyi explained that very low sulfur fuels such as cryogenic fuels, like hydrogen or natural gas, are still very expensive which can limit their use in spite of the 2020 International Maritime Organization (IMO) legislation reducing sulfur content of fuel oil from 3.5% to 0.50%.
According to him, the use of liquefied biomethane (bio-liquefied natural gas or bio-LNG) in the shipping sector is poised to increase, pushed by the EU Fuel Maritime legislation in Europe. However, he regretted that there is not yet an EU market for biomethane because guarantees of origins (GO) issued at national level are not recognized at EU level. He noted that the price of carbon via the EU Emission Trading System (ETS) will be a key discussion in the next European Commission cycle. A higher carbon price, which may stimulate investments in green technologies, has cumulative effects on the providers of materials for the green transition, which in turn can slow down the roll out of certain technologies. He expects that the shipping sector will pass on the new ETS costs to customers, which will start in 2025.
With regards to the use of blue and green ammonia for the shipping sector, he explained that their use depends on the price of hydrogen, which is still relatively high, and on the availability of electrolyzers to produce that hydrogen. Blue ammonia requires the use of carbon capture and storage (CCS) and green ammonia requires more generation of green electricity. Both technologies are facing roadblocks which will have to be tackled. He noted that the demand for fossil fuels beyond the Organization for Economic Co-operation and Development (OECD) countries over the last 10 years has increased by 30%, so while the post-industrial economies saw a decline in carbon intensity and a decoupling between the economic growth and the use of energy, the rest of the world is not on that path and will continue using more fossil fuels in the next decade. However, he believes that we may see a further reduction of the carbon intensity in other parts of the world as well, like we see in the OECD area.
The seventh episode of our podcast is a conversation with Koen Noyens, Head of Public Affairs at Milence.
Milence was established in mid-2022 as a joint venture between Daimler Truck, the TRATON Group, and the Volvo Group.
Koen Noyens explained that Milence will roll out a network of public charging facilities for long-haul heavy-duty vehicles across Europe. The target is to build a minimum of 1,700 charging points by the end of 2027. These charging facilities are expected to work across models and brands.
He highlighted that Milence’s strategy is to signal to the industry that the public network will be available for them and that they should therefore embrace the transition to zero-emission vehicles.
Milence expects EU Member States to follow suit with the agreed targets under the adopted Alternative Fuels Infrastructure Regulation (AFIR) which is applicable since April 2024. Member States have the obligation to build or attract private investments to build public charging hubs dedicated to this vehicle category, following the agreed timeline. The new CO2 emission reduction standards for heavy-duty vehicles (HDVs) which are very close to final adoption are another powerful regulatory driver with a 45% emission reduction goal by 2030, a 65% by 2035 and a 90% by 2040 for new HDVs.
The conversation went on about the challenges and bottlenecks standing in the way for players such as Milence. The main issue remains the lack of grid availability, namely the lack of visibility and clear timelines on the expansion of grid capacities, and the competition with solar or wind project developers whom are also in need of extra grid capacity. A more structural barrier is the inappropriate remuneration scheme and lack of financial incentives for distribution network operators (DSOs). As a result, they are not encouraged to invest further into their networks.
Milence added that their charging hubs will provide a premium recharging experience, keeping the drivers and the goods safe and giving them access to the most modern amenities possible.
The discussion touched upon how other regions/countries, such as China and India, approach electrification of the heavy-duty sector.
Despite the challenges, Koen Noyens highlighted that there are opportunities for many players, including land owners, they are essential in the development of these charging hubs for long-haul heavy-duty vehicles.
In the end, Koen Noyens believes that battery electric vehicles are the most cost-effective vehicles compared with other technologies, as energy accounts for a major share of the total cost of ownership.
The sixth episode of our podcast series is a conversation with Ralf Diemer, Managing Director of the E-fuel Alliance, a cross-sectoral coalition created in 2020 to promote the industrialised production of e-fuels on a global scale.
The alliance has members based in 17 different countries and from 4 continents. The member companies are active in various sectors: oil and gas, on-road transport, aviation and maritime transport, and off-road machinery, among others.
Ralf Diemer outlined the benefits of using e-fuels for reaching the European Union (EU) decarbonisation goals.
He explained that all combustion technologies can run on e-fuels and directly reduce CO2 emissions. Their advantage is the direct usability without the need for massive investments in infrastructure, and without having to change existing fleets.
The discussion covered EU regulations over the last 5 years and regulatory frameworks in other countries, such as Japan.
According to Ralf Diemer, the Green Deal and it’s Fit for 55 package have helped a lot trigger investments in e-fuels. Before these measures, there were no incentives at all. However, he regretted the “ideological debate” that is unfolding in the EU on which sector should be using e-fuels and which sector should be fully electrified.
He argued that we are at the stage where we still have to kick-start mass production of e-fuels, so restricting the sectors where e-fuels can be used from the beginning doesn’t foster the right kind of investments. He hopes to see more players in this sector in the future, wherever they are based.
The conversation went on about the synergies between e-fuels and biofuels production as well as carbon capture utilization and storage (CCUS) and the projected e-fuels prices in 2030/2032, taking into account that e-fuels will mostly go from small scale to large scale production so the prices should go down.
Ralf Diemer emphasized that 100% e-fuel at the fuel station will not happen on the 2030 horizon, most likely the available solution will be using drop-in fuels, biofuels and e-fuel blends combined, otherwise the price will indeed remain too expensive.
In this episode, SGS INSPIRE interviewed Laurent Donceel, Deputy Managing Director at industry federation, Airlines for Europe (A4E), and Klaas Pel, Global Head of Aviation Regulation at Neste.
Together, they discussed the impact of the EU Sustainable Aviation Fuel mandate of 2% usage for all aircrafts departing from EU airports effective as of January 1, 2025. This concerns all flights, domestic and international, and all airlines passing by EU airports with the exclusion of a few small airports. It represents 95% of all CO2 emissions from aviation in Europe.
The conversation covered the current SAF production and consumption levels and the feasibility of increasing production capacity to meet the global demand triggered by the EU. Laurent Donceel estimated that 2.6 million tons of SAF will be consumed when the EU mandate kicks in. A staggering increase from the 200,000 tons in 2023.
They also look at the various SAF feedstocks, including used cooking oils and animal fats. Klaas Pel estimated that about 40 million tons of feedstock will be globally available in 2030.
The conversation went on about synthetic fuel or e-SAF and the likelihood of its commercial availability, as it is included in the EU mandate.
Finally, the interview ends with a note of optimism from speakers showing confidence that SAF production will meet demand beyond the EU. However, challenges with regards sourcing of new feedstocks will remain.
In this episode on ethanol blending in gasoline, focusing on the case of India, SGS INSPIRE senior market analyst, interviews Dr. Ramakumar, former R&D Director and Board member of Indian Oil.
Together, they explore the reasons for India’s decision to start blending ethanol in gasoline in 2003, following Brazil’s path.
They discuss the current level of ethanol in India’s gasoline and the feasibility of India’s target for an average of 20% of ethanol penetration by April 1, 2025.They also look into the various ethanol feedstocks available to India, the domestic ethanol production and other types of innovative blending with gasoline, namely the methanol-gasoline blend which is under testing in some Indian states.
The conversation continues with a focus on the potential of synthetic ethanol produced from recycled off-gas emitted by industrial plants, mentioning the technology from Lanza tech, and existing experience in Ghent, Belgium with the ArcelorMittal steel plant.
Finally, they conclude the interview with the prospect of other Asian countries’ decision to replicate India’s strategy with regards to E20, and the associated benefits in terms of sustainability and green growth.
At the beginning of this year, SGS INSPIRE launched its podcast series on energy in transport called INSPIRE-ing Energy Talks. We aim to have a new episode every two months and SGS INSPIRE users are welcome to propose topics and join us as speakers!
In episode three, SGS INSPIRE market analyst Lucky Nurafiatin chats to Dr. Oki Murza, senior vice president of research and technology innovation at Pertamina, Indonesia’s national energy company, about SAF development in the country. Oki coordinates the research, development and commercialization of innovations to support Pertamina’s business development strategies, such as renewable diesel/hydrotreated vegetable oil and sustainable aviation fuel (SAF).
Over the past few years, more countries and airlines set trials and/or secured SAF supply for 2025-2030 to anticipate the mandatory use of SAF during that period. In addition, several airlines have chosen to invest in dedicated SAF production facilities and/or to secure feedstock supply.
The European Union’s ReFuelEU aviation initiative drives this investment, which sets a 2% v/v SAF mandate for every aircraft taking off from any EU airports in 2025. This initiative is expected to be the key driver of global SAF production and consumption.
Working along similar lines, Indonesia’s government did set a 2% v/v SAF mandate in 2016. However, it did not work out. Nevertheless, the government is expected to continue with the implementation in line with the global aviation sector. Our podcast chat revolves around Indonesia’s SAF development, feedstock issues and future plans.
In January, SGS INSPIRE launched its first podcast on energy in transport called INSPIRE-ing Energy Talks. We will have a new episode every two months and INSPIRE users are welcome to propose topics and join us as speakers!
In this episode, Lucky Nurafiatin spoke with Salah Mahdy, a global director for renewable hydrogen at Howden and Dhanisha Juleemun, a market analyst for Africa and Europe in SGS INSPIRE.
Salah led high-profile green and blue hydrogen and ammonia projects at Howden, a global leader in manufacturing air and gas handling solutions. The list of Salah’s projects includes the world’s first green steel plant, the largest hydrogen refuelling station, the first e-fuels plant and Europe’s first hydrogen underground storage project.
Dhanisha’s expertise is global fuel product development for diesel and gasoline vehicles. She forecasts the trend for new technology in the energy sector.
Over the past few years, the development of hydrogen fuel and hydrogen-fuel cell vehicles has grown exponentially. The first commercial hydrogen fuel cell vehicle was launched and sold in Japan in 2014 and in California at about the same time.
Fast forward to now, many countries set targets for hydrogen vehicles, with more models and types available on the market. However, the number of hydrogen vehicles on the road is still much smaller than electric vehicles. Our conversation revolved around the latest developments of hydrogen as a fuel for the transport sector, its benefits, and its consequences.
In January SGS INSPIRE launched its first podcast on energy in transport called INSPIRE-ing Energy Talks. We will have a new episode every two months and INSPIRE users are welcome to propose topics and join us as speakers!
In our first podcast, Lucky Nurafiatin discussed biofuels mandates and feedstock availability with Jose Angel Olivero Garcia from LIPSA.
Countries with vast domestic vegetable oils production are leading in the use of biodiesel, while those with limited production are using biodiesel to a lesser degree. Moreover, the use of used cooking oil and by-products from the vegetable oil refining process is increasing due to GHG reduction limit applicable to vegetable oil.
In this episode, SGS INSPIRE and LIPSA take a closer look on the availability of vegetable oils and used cooking oil trade against the world’s biofuels mandates.
Mr. Olivero has been the sales director of LIPSA for almost 25 years. He received a degree in economics from the University of Seville and a degree in Food Business Management from Instituto Internacional San Telmo. In the past 33 years, he has been involved in the oilseeds, oils and fats business. Prior to joining LIPSA, Mr. Olivero worked in the sales department of Cargill Espanã. With vast experiences, he represents the company in international forums and in international and national associations related to vegetable oils and fats where he participates as a panelist and a speaker.