Type of Measure: New IdeasTechnology
Sub-Measure Description: Regulatory InstrumentTechnology Only
Principal Sector: Energy SupplyTransport
Main Emission Target: CO₂GHGₛ
Policy Focus: AirClimate
Status of Implementation: Ongoing
EU Climate Relevance: RED

Summary

The EU’s 2009 Renewable Energy Directive (RED)(2009/28/EC) set Ireland a target of increasing the renewable share of energy consumption to 16% by 2020. Self-imposed targets were allowed in the energy and heat sectors but, because of the necessity of transport improvements to come from easily tradeable bio-fuels, standardized requirements were imposed on this sector. By 2020, each member state was required to have a 10% renewable share in transport. To achieve this target, the government sought to increase the uptake of electric vehicles as well as reducing the carbon intensity of the existing stock through mandated bio-fuel concentration rules. From 2010-2018, producers were required to produce fuel with an 8.695% bio-fuel share, with those producing a lower share than this, facing fines. This rate was increased to 11.111% in 2019, with a further increase planned for 2020.

The Biofuel Obligation Scheme (BOS) was implemented in 2010 in response to the 2009 Renewable Energy Directive which mandated that EU member nations increase the share of renewable energy consumption in the transport sector to 10% by 2020. Administered by the National Oil Reserves Agency (NORA) the biofuel obligation scheme instructs road transport fuel suppliers to ensure that a certain proportion of all fuel supplied comes from renewable sources. Certificates are awarded to suppliers per litre of biofuel produced with a stipulated number of certificates required. This requirement, known as the bio-fuel obligation rate effectively sets a percentage on the bio-fuel share of fuel on the market. The initial requirement of 8,695 certs per 100,000 litres amounted to an 8.695% biofuel share. A €0.02 charge per litre levy is applied to bio-fuel disposals, with a €0.45 per litre fine imposed on suppliers who don’t have enough certs to cover production at the end of the calendar year.

In 2019, the number of certs required was increased so as to ensure an 11.111% bio-fuel share. The DCCAE estimate that a 12% level is required for Ireland to reach their RED obligations and as such future increases are planned. The 2019 Climate Action Plan (CAP) committed to increasing the use of bio-fuels in the transport sector, outlining a three-step plan to achieving this. A public consultation period would proceed a planned 2021-2030 BOS trajectory which would then be implemented so as to achieve RED targets.

The scheme prioritizes the use of biofuels produced from waste-residue by offering two certificates per litre for such fuel types. As of 2018 all biofuels were eligible for two certs, with the majority of Irish bio-fuel (62%) made from imported cooking fuel. A key requirement of the RED is that bio-fuels become 50% less carbon intensive than fossil fuels. The average litre of bio-fuel in Ireland in 2018 was 83% less intensive than fossil fuel alternatives.

Increases in the bio-fuel obligation rate necessitate the use of higher concentrations of biofuels. The current blends of E5 (95% petrol and 5% ethanol solution) and B5 (95% diesel and 5% bio-diesel solution) will be replaced by E10 and B12 by 2030 as per the CAP. Not all vehicles in Ireland are compatible with such blend rates. Information campaigns and infrastructural changes may be required to facilitate this change.

The Biofuel obligation scheme forms a supplementary part of the government’s plans to achieve 2020 RED targets and EU 2030 renewable targets. While incentives aimed at increasing electric vehicle uptake and facilitating a modal change away from individual motor vehicles represent areas of more significant abatement potential, the expansion of the BOS can help achieve a reduction of emissions without the need for a behavioural change on an individual level. Biofuel is 83% less carbon intensive than fossil fuels and as such higher shares of the renewable alternative will lead to lower transport emissions.

Marginal Abatement Cost Curves (MACCs) outline the options available for reducing emissions. These options are ranked on both relative cost and mitigation potential. The relative cost of the measure (Cost (€)/ CO2 reduction (mega tonnes)) is recorded on the Y-axis by the height of the associated column and the abatement potential (CO2 eq. (mega tonnes)) is recorded on the X-axis by the width of the column. The MACC outlined in the 2019 CAP suggests that increasing the Bio-diesel blend rate from B5-B12 would represent a cost prohibitive measure however such is the necessity of abatement given the climate threat, the 2019 Climate Action Plan suggests the measure is necessary.

While there are few behavioural issues associated with the transition toward high percentage biofuels, there are technical barriers to overcome. As the DCCAE (2018) point out, some of the more carbon efficient fuel blends, such as E10, are not suitable for all vehicle types in Ireland which would require changes to forecourt infrastructure in petrol stations so as to offer alternative fuel types to unsuitable customers.

References

Ireland, DCCAE. Climate Action Plan. Dublin, 2019. Available at: https://www.dccae.gov.ie/en-ie/climate-action/topics/climate-action-plan/Pages/climate-action.aspx [Accessed 8 Aug. 2019].

Ireland, DCCAE. Bio-fuel Obligation Scheme. Dublin, 2018. Available at: https://www.dccae.gov.ie/en-ie/news-and-media/consultations/Pages/Biofuel-Obligation-Rate-Consultation.aspx {Accessed 13 Aug 2019].

NORA (2019). The Bio-fuels Obligation Scheme Annual Report 2018. [online] Dublin: NORA. Available at: http://www.nora.ie/regulationslegislation/biofuels-obligation-scheme.152.html [Accessed 13 Aug. 2019].

Reference this

Policymeasures.com (2020). Biofuels Obligation Scheme. Available at: https://policymeasures.com/measure/bio-fuel-oligation-sheme/. Last accessed: 21-01-2020.