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Sales of electric vehicles are taking off, reaching more than 10% in 2020. Just recently, the Audi CEO called for ‘Technologieklarheit’ (technological clarity): No gasoline, no diesel, no (plug-in) hybrids, no gas and no hydrogen in passenger cars, only battery electric. Many other car and truck manufacturers now state publicly that the future of almost all road transport will be battery-electric – even long-haul trucks.
This begs the question, why does the EU’s Renewable Energy Directive (RED) still allow EU member states to achieve its targets exclusively with a blunt hammer like biofuel blending? In fact, 25 of the EU’s 27 countries only allow fuel suppliers to meet their renewable transport fuel targets with biofuel blending. This is an approach that dates back to the age of the internal combustion engine.
The obvious attraction of only allowing biofuel blending is that the fuel industry does not have to change, just gradually blend more biofuels. It’s the path of least resistance. The same fossil fuel companies, a couple of biofuel blenders and existing refueling stations remain the key players.
But surely, we can do better with the coming surge in electric vehicles. We do not need a gradual increase in biofuels, but, instead, a complete shift to the key transport fuel of the future: renewable electricity.
Renewable electricity is not a blendable, drop-in fuel. Unlike fossil fuel infrastructure, renewable electricity is produced in a much more decentralised manner. The charging of electric vehicles will also be decentralised – sometimes at public fast chargers, but mostly at your home or workplace.
The review of the renewable energy directive offers a window of opportunity. The EU should make it possible for fuel suppliers in all EU countries to also use renewable electricity to meet their targets.
A system of tradable credits should offer a level-playing field between different renewable fuels, doing away with the monopoly of biofuels as the renewable fuel of choice. The Netherlands already has such a credit mechanism in place, Germany as well. France will introduce a credit mechanism for renewable electricity from 2022, amending its rules on biofuels.
Fuel suppliers anywhere in the EU should have the option of meeting their targets with all renewable fuels available, including with credits from renewable electricity. Operators of public recharging stations should be able to generate such credits and sell them to fossil fuel suppliers. Some fuel suppliers might even start operating their own recharging stations for electric vehicles at their gas stations, instead of paying for biofuels. EV drivers recharging at home or employers offering recharging to their employees should also be able to sell credits for the renewable electricity charged.
But let’s remember: the goal of the Renewable Energy Directive is the promotion of energy from renewable sources. Any credit mechanism should therefore also provide incentives to charge electric vehicles with 100% renewable electricity. An electric vehicle is already cleaner than a car running on diesel or petrol (even when factoring the emissions from the battery production). But the emission savings from electric vehicles can further increase by incentivising recharging them with renewable electricity.
It is high time for the EU to move away from its blunt instrument of the ‘biofuel-blending’-hammer and open up a new toolbox with some more refined instruments. Crediting renewable electricity is one idea. The good news is that the European Commission’s Smart and Sustainable Strategy seems to agree. The Commission should follow through on these plans and overhaul the accounting mechanism when it revises its Renewable Energy Directive in June. It’s time to switch up the tools.