PHB: Delegated Act Feedstocks Advanced Biofuels Undermines Investor Confidence
At the end of 2022, the European Commission submitted for public consultation the delegated act concerning an update of the feedstock list for advanced biofuels. The Netherlands Platform Renewable Fuels has put forward that the sector needs a certain level of investment security to go ahead with large investments necessary to scale up the production of sustainable biofuels. The biggest hurdle to these necessary investments is the inability of market players to anticipate whether feedstocks will be put on the Annex IX-A list (incentivized by a minimum percentage), or Annex IX-B (capped by a maximum percentage).
Furthermore, the use of the terms ‘advanced’ and ‘mature’ technology to categorize feedstocks into either of the two lists in Annex IX is problematic: feedstock conversion technologies considered to be ‘advanced’ today are aiming to become a ‘mature’ technology in time. Moreover, those investing in feedstock conversion pathways that were previously understood to be ‘advanced’ are now confronted with those feedstocks being explicitly mentioned in the capped Annex IX-B list instead. By adding feedstocks to the list in Annex IX-B, more pathways are excluded, which is counterproductive to the aim of ramping up volumes of sustainable biofuel and biogas production. A possible solution to assure market players that their investments are safe would be to remove the cap on the use of feedstocks listed in Part B.
A second point of concern is that the lack of clarity in definition of several concepts used in the proposed update of the feedstock lists. This makes interpretation for all market players that must engage with these lists extremely difficult. As mentioned before, this concerns the definition of concepts of ‘advanced’ and ‘mature’ technologies, but further unclarity arises on the proposed addition to Part A of Annex IX of point (t non-food crops grown on severely degraded land, not suitable for food and feed crops". Firstly, it is unclear what the concept of “severely degraded land” means; a definition should be added. Furthermore, “food and feed crops” are not just defined by their edibility or their suitability for human consumption: if severely degraded land is not viewed as agricultural land, any crop grown on that land by definition is not a food and feed crop. This further blurs the reasoning of the Commission, as it might lead to processing of non-food crops by ‘mature’ technology being considered as Part A feedstocks, thereby undermining the argument that feedstocks should only be in Part A, when they can only be processed using ‘advanced’ technology.
For the full reaction of the Netherlands Platform Renewable Fuels, see here (PDF).