Spotlight: Fuels of the Future Event in Berlin sees higher renewable targets on new climate change rules

Germany's Climate Protection Package and the EU's Green Deal were the main topics discussed at the Fuels of the Future event in Berlin this week. There is a sense of urgency about the transition of mobility in view of the EU's 2050 goals of a net-zero carbon economy.

There was a clear consensus that a mix of various renewable energy sources is required to meet the EU target, and biofuels will play a crucial role. This includes first-generation biofuels, which are capped this year at 7% of total fuel demand under the Renewable Energy Directive. S&P Global Platts Analytics forecasts EU biofuel demand in 2020 at 426,000 b/d, up 7.8% on the year, making up 6.5% of the total transportation fuel pool. Of total EU biofuel production, around 80% is first-generation.

In parallel to the German Climate Protection Package, the biggest investment (2021-2030) in which at Eur86 billion ($95 billion) will be in the railway network, the EU's Green Deal announced last December is expected to have a major impact on the renewables sector. The ambitious target will mean higher sub-targets in 2030 -- to cuts in greenhouse gas emissions of 50%-55% from 1990 levels from 40%. The European Commission is planning to review all EU legislation to guarantee that targets are aligned with the 2050 net-zero carbon target.

This could come in support the renewable fuel industry, which will be challenged in the next decade by lower overall fuel demand as biofuels consumption is dependent on gasoline and diesel use. However, biofuels will make up a larger percentage of the total fossil fuel pool. S&P Global Platts Analytics estimates EU gasoline and diesel consumption will be 6.548 million b/d in 2020 and to be 10% lower in 2030.